Edgar Esquivel tells the story of how Sean O’Brien failed to end the Teamsters’ love affair with UPS.
On July 25th, in an unprecedented turn of events, the International Brotherhood of Teamsters (IBT) under the leadership of Sean O’Brien presented a “historic” tentative agreement (TA) at UPS with a press release titled “We’ve Changed the Game.” But after details became known of the deal, representing 340,000 UPS workers, anger quickly brewed from the rank-and-file.
The concessionary TA transmitted by the media as a victory for workers was an obvious corporate win. UPS clearly brought down the self-proclaimed “militant” Teamsters General President (GP) to his knees and pulverized his UPS Teamsters after months of sowing confusion and posturing with pathetic “practice pickets.” The concessionary agreement was not only an insult to those who participated in those pickets, but today has further divided UPS members across the country. Timid officers afraid of retaliation from an authoritarian O’Brien have also privately expressed dissatisfaction. For those concerned with being targeted, Teamsterlink has become the epicenter of opposition.
As negotiations began with UPS in early 2023, O’Brien quickly changed the aggressive tone he had been spewing since his run for Teamsters GP. At the 2022 Labor Notes Conference he delivered an aggressive speech, claiming, “we’re gonna put that company [UPS] on its knees.” He doubled down with the same aggression at the Teamsters for a Democratic Union (TDU) Fall 2022 convention, asserting, “we gotta strategize, we gotta organize and we gotta pulverize UPS.” The mediocre-at-best TA reached conclusively proved why there was such a change of tone in 2023. The $7.50 in general wage increases (GWI) was under 18% over five years following the greatest inflation crisis in forty years – not nearly enough for workers to get ahead in the current economy. Hence, the TA further generated division among the ranks by regions due to O’Brien’s ultimate negotiating blunder – pensions.
It was quickly learned that only 60,000 members from twenty-two central and southern states covered under the company controlled IBT-UPS Plan, and another 15,000 New England Supplement members covered under the failing New England Teamsters Pension fund would be rewarded with $5 in Health and Welfare (H&W). The rest of the 265,000 members across the nation in non-failing pension funds would be punished with $2.50. In other words, O’Brien negotiated a $12.50 package for 22% of UPS members and a $10 package for 78% of the members. New language on pension contributions was added to the National Master Agreement (NMA) specifying that pension funds that are not in “rehabilitation” status would not be rewarded with the additional $2.50 in H&W. Since the passage of the Butch Lewis Act in March 2021, the federal government had successfully injected funds into every failing Teamster pension fund, except for the New England one.
The current $10 package for 78% of the membership is less than the total package received during the 2018 agreement. In that agreement members received $4.15 in GWI, $1.15 in cost-of-living-adjustments (COLA) and $5 in H&W—for a total of $10.30. At least three supplements received larger packages such as the Southwest Rider which received $5.05 in H&W for a total package of $10.35. As a result of a struggling pension fund, the Metro Philadelphia and Local 623 supplements received $3.75 in pension increases over the five-year agreement in a total package of $11.55. O’Brien’s claim of the “richest” contract in UPS Teamsters history was not only a blatant lie, but an insult to the 78% of members he knowingly sold-out and betrayed.
UPS Chief Financial Officer Brian Newman celebrated the company’s victory over the Teamsters when he gloated to the business community how much they were saving in H&W contributions:
Health and welfare contributions increased by $0.50 per hour each year, and there was no increase in contributions to multiemployer pension plans or MIP. This is the first contract in over 20 years that does not include an increase in the map contributions. Also, it’s worth highlighting that 46% of the total annual contractual cost increase occurs in the first year of the contract. So, while year one will be higher than normal years, two, three and four are at a much lower growth rate.
The critical and declining New England Teamsters Pension fund remains the only Teamsters pension fund that has yet to receive a bailout. In fact, New England did not apply for a bailout until February 2023 and on May 30th withdrew its application after most likely being denied by the Pension Benefit Guaranty Corporation (PBGC). Interestingly, after it was learned that only these 75,000 members would receive pension increases, some local leaders loyal to Sean O’Brien in the Western Region which represents approximately 80,000 UPSers quickly spread misinformation to enraged members by stating that they were not receiving pension increases because their pension fund was 100% funded.
Newman debunked that myth. The Western Conference of Teamsters (WCT) pension plan was only 98% funded as of the last yearly notice mailed out to participants in May 2023. But even if it were true, the fund has the ability to raise the accrual rates and/or keep it at the 1.60% rate it was kept from 2021 to 2023 which would help keep the fund under the 100% threshold. In 2008 the accrual rate for participants with under twenty years of service received 2.0% and those above twenty years were rewarded with 2.65%. But following the Great Recession, trustees agreed to lower the accrual rate to 1.20% from 2009 to 2019 in an effort to keep it solvent—an action many other Teamster pension funds failed to follow, particularly New England.
On January 10th, it was revealed that the trustees of the WCT pension in fact had voted to maintain the 1.60% accrual rate for years 2024 and 2025.
The anger generated by Southwest Rider members after learning they would not be receiving pension increases over the next five years pushed the ten locals it represents in Arizona, New Mexico, Las Vegas and Southern California into a corner. After discussions with O’Brien over rank-and-file discontent, local leaders were able to convince him to add an insulting 25 cents pension increase on the first year of the contract diverted from the 50 cents healthcare contribution. Hence, 25 cents will go to healthcare and the other 25 cents will go into pension – a very difficult pill to swallow for Southwest Rider members who in 2013 were forced to divert $1.25 of their $2.50 pension increase during the first three years of the agreement to pay for the creation of a new Taft-Hartly healthcare plan. This was after the then-Director Ken Hall and his assistant O’Brien in charge of supplements and healthcare agreed with the company to kick out 45% of UPS Teamsters from a superior company administered plan.
Furthermore, as a result of the 2013 agreement, approximately 40,000 Southwest Rider members today receive a lower pension contribution than the rest of the Western Region, thanks to a sellout jointly engineered by Hall and O’Brien. Interestingly now, some who opposed and spoke out against the 2013 H&W concessions as rank-and-file members, this time as officers strongly defended the current pension concessions. More ironic, the former leaders that strongly supported the 2013 concessions and were voted out of office as a result, like hypocrites, suddenly opposed the 2023 concessions. It’s a unique trait of the culture of divided loyalties and meandering behavior within the entrenched Teamsters old-guard that continues to control the decision making of the most bureaucratized and corrupt union in North America.
According to a conversation held between former Northern California UPS Package Chair Peter Nunez and WCT pension Chair Chuck Mack: not receiving a full $2.50 in H&W over the current five-year agreement would result in the approximate loss of $750 extra per month for a full-time UPSer participating in that pension plan. A huge loss, considering a retiree’s monthly salary remains fixed for the remainder of their retirement.
For part-timers who make-up nearly two-thirds of the UPS Teamsters membership, O’Brien dropped the $25 starting wage demand and settled for $21. At the same time, the general president waged attacks against the newly formed militant Teamsters Mobilize (TM) caucus for their activism during the IBT’s secretive negotiations. TM emerged as a new UPS Teamster caucus concerned with the plight of part-time workers. Since their emergence, they have been ridiculed by O’Brien, his pro-business friendly lackeys and even the now-discredited and unscrupulous TDU for their fight for $25. With the degeneration of TDU, look to TM to become the force to be reckoned with in the future.
New Article 26 language fails to protect feeder volume from being diverted to the railroads. This has resulted in the elimination of sleeper runs and massive layoffs in that department. The subcontracting of feeder work, which had been a problem for decades, remains intact. O’Brien also agreed to allow UPS to expand automation in their effort to cut costs – another victory for them. The personal vehicle drivers (PVDs) negotiated in 2018 to be used during the Christmas peak season, that were originally a strike issue for O’Brien, were also abandoned. The PVD name was simply changed to seasonal support drivers (SSDs). O’Brien’s claim that the agreement was worth $30 billion was another lie that UPS quickly debunked in the business media.
Overall, 2023 was a bad year for Sean O’Brien and “his” Teamsters. Failing to win pensions for Sysco Foods members in Boston, Syracuse, Indianapolis and Louisville after striking was a devastating blow to his 2021 campaign platform. The eight-and-a-half month extension at Costco Wholesale resulting in under inflation GWIs and an insulting 36 cents in pension increases over three-years was so poor that O’Brien himself would not recommend a Yes vote and instead declared neutrality. The IBT also attempted promote the ABF Freight agreement as a win for members, however—the members pension contributions will be frozen at just over $7 for a third consecutive agreement (15 years). The YRC bankruptcy and loss of 22,000 members was not only a huge financial loss of approximately $1.2 million in union dues per month for the IBT, but a moral loss of a core craft. Can the freight division which was the core of the Teamsters survive under O’Brien?
The twelve-day strike held in December at the DHL – CVX Cincinnati Airport representing 1,100 members was so disorganized that the overwhelming majority of workers crossed the picket line. When the strike was settled, the IBT released a press release with minimal details other than the usual “increases in pay, better health insurance benefits and improvements in worker safety.” Thanks to a local media outlet, it was finally revealed that starting pay will jump from $20 to $22, and as was vaguely added: “a total bump of $5 an hour by 2027.” Neither the Teamsters nor the local media revealed these DHL members winning a pension—a trademark of the O’Brien administration.
A coalition of unions representing 85,000 Kaiser Permanente workers in the healthcare industry out-performed O’Brien’s Teamsters when they negotiated 21% in GWI and a starting wage of $25 for California members, $23 in other states. Shawn Fain, who was more transparent than O’Brien during the United Auto Workers (UAW) negotiations representing 147,000 workers from the get-go, presented his 40% demand in GWI to the Big Three automakers. After six weeks of phony “stand-up” strikes that kept 70% of members working, the UAW ultimately settled for 25% over a four-and-a-half year contract and a starting wage of $28. However, Fain failed to win the most important union benefits for members hired after the Fall of 2007: pension contributions and retiree medical benefits. Instead, the Big Three agreed to increase those members’ 401(k) contributions from 6.4% up to 10%.
In another blow to O’Brien’s personal ego and false claim of the Teamsters being the most powerful union in North America, CNN Business stripped the IBT leader of his mojo and handed it to Shawn Fain when they named him “labor leader of the year.”
O’Brien’s year concluded in embarrassing fashion after using Twitter to pick a fight against Oklahoma’s anti-union Senator Markwayne Mullin. Like a savage thug suffering from a severe case of Napoleon syndrome, he tweeted: “You know where to find me, Anyplace, Anytime cowboy.’ Senator Mullin replied: “MMA fight for charity of our choice. Sept 30 in Tulsa, Oklahoma. I’ll give you three days to accept.” O’Brien failed to reply to the senator’s invitation. Later at a Senate Committee on Health, Education, Labor and Pensions hearing in November, the Senator stood up and rechallenged O’Brien to a fight. Sensing defeat, the IBT’s general president blushed. After the scuffle, the Washinton Free Beacon selected Mullin as their “2023 Man of the Year.”
To add insult to injury, Teamsterlink shared information from the IBT that the general executive board (GEB) will be holding a meeting to vote on an alleged race discrimination lawsuit:
Walker, et all., 2023-CAB-001243
This case was brought by thirteen former IBT organizers who were fired March 22, 2022. The IBT denies any wrongdoing and the settlement proposed by the plaintiffs includes a “No Admission of Liability” clause. The plaintiffs offered to settle all claims against the union for $2.9 million. The existing IBT insurance policy will cover $2.4 million leaving a balance of around $500,000 to be paid from the General Treasury. The GEB is voting by poll whether or not to approve the payment from the General Fund.
The dishonesty displayed by the IBT bureaucracy during the UPS negotiations began with every single campaign promise O’Brien has broken since taking office in March 2022. The signing of non-disclosure agreements, the continuation of the Hoffa-era brownout, overpromising and underdelivering further tarnished this concessionary deal that again has divided 340,000 UPSers.
One thing is for certain, O’Brien is far from a militant unionist. He exemplifies the most reactionary and conservative elements of America’s pro-business friendly unionism and an intolerant Teamsters old-guard. Make no mistake, O’Brien will attempt to undermine, discredit and attack all opposition through scare and intimidating tactics. After nearly two years of concessionary contracts, with the UPS deal being the latest—it will be the duty of all rank-and-file members to organize and transform the course of their history.
