LOUISVILLE, Ky. (WDRB) — UPS and the Teamsters union reached a new agreement on driver severance packages, ending a dispute over a controversial buyout program.
The settlement places limits on UPS's "Driver Choice Program," which offers voluntary buyouts to drivers as part of the company's broader restructuring effort.
Under the agreement, UPS can offer severance packages to up to 7,500 drivers nationwide. Those who accept will receive $150,000 in early retirement compensation.
The deal also ensures buyouts will be distributed based on seniority and gives longtime drivers priority access to the offers.
Union leaders said the agreement protects workers and reinforces contract rights after months of tension between the two sides. UPS said in a statement Sunday that the outcome aligns with their objective to provide all U.S. drivers with options.
"As UPS makes changes to position itself for the future, our focus remains the same — supporting our people while delivering the reliable service our customers expect," the company said.
The dispute began earlier this year when UPS rolled out the Driver Choice Program without union approval, prompting grievances and legal challenges from the Teamsters. The union argued the program violated its current labor contract.
As part of the settlement, UPS agreed not to introduce any additional severance programs for the duration of the current national contract, which runs through July 31, 2028.
UPS said the agreement allows the company to continue offering voluntary options to drivers while it reconfigures its network.
The company previously announced plans to cut up to 30,000 jobs and close dozens of facilities as it reduces lower-profit deliveries and reshapes its operations.
Both sides said the new deal provides a path forward — balancing workforce changes with protections for union employees.
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