The Association of Parcel Workers of America kicked off its campaign to replace the Teamsters union as labor representative at United Parcel Service of America Inc. and take control of UPS employees share of more than $50 billion assets in Teamster multiemployer pension funds and more than $1 billion in annual UPS contributions.
The dissident labor group exclusively comprising UPS workers is asking 238,000 workers represented by the International Brotherhood of Teamsters, Washington, to sign individual petition cards, asking for their authorization for the new APWA organization to represent them in collective bargaining at the company, said Van Skillman, a UPS driver from Greensboro, N.C., and president and co-founder of the new union.
The key issue for the APWA is better pension fund management and higher and more equitable pension benefits that workers currently receive from the 21 Teamster multiemployer plans that cover UPS employees, Mr. Skillman said.
The group needs 30% of the Teamster-represented UPS employees to sign the cards in order to ask the National Labor Relations Board, Washington, to hold an election to determine which union will be certified as the labor representative at UPS, Mr. Skillman said. APWA officials hope to complete the petition signing in 60 days.
The APWA seeks to become the collective bargaining union for parcel-service workers at UPS, based in Atlanta, Mr. Skillman said. Some 12,000 Teamsters at UPS joined the APWA, paying its $150 per person initiation fee, Mr. Skillman said.
Gail Moran, assistant to the regional director at the NLRB, said, Its not usual you have more than one union representing the same classification of works at the same company, But she said she couldnt say if thats the case with the UPS workers.
The current Teamsters contract with UPS expires in 2008.
Galen Munroe, Teamsters press secretary, said in a statement, We dont believe that the APWA is a legitimate labor union, they have no filings with the Department of Labor and they have never negotiated any contracts.
The three largest of the 21 Teamsters pension funds covering UPS employees have more than $50 billion in assets: the $30.2 billion Western Conference of Teamsters Pension Trust Fund, Seattle; $20.7 billion Central States, Southeast and Southwestern Areas Pension Fund, Rosemont, Ill.; and $3.4 billion New England Teamsters and Trucking Industry Pension Fund, Burlington, Mass., Officials from the three funds couldnt be reached for comment. The total assets of the other 18 plans wasnt available.
UPS Teamster employees represent various proportions of the participants in 21 Teamster multiemployer funds. UPS contributed $1.289 billion in 2005 to multiemployer funds, according to its most recent 10-K report filed in 2006. The vast, vast majority of it went to Teamster pension funds, said Norman Black, UPS spokesman; he didnt have an exact figure.
Mr. Black declined to comment on the APWA effort, saying UPS isnt involved in its employees choice of union representation.
UPS and the Teamsters opened negotiations on a new contract in September to discuss exclusively pension and health-care issues, Mr. Black said. He said the opening of talks was unusually early for the contract that wasnt expiring for almost two years because both sides recognize how difficult it is to settle the two issues.
UPS wants negotiators to consider all ideas regarding the structure of the unions pension plans, Mr. Black said, although he wouldnt elaborate. Mr. Black said UPS is concerned about severe underfunding of some of the Teamster plans; the use of UPS contributions to subside pensions of people who have worked for other companies that went out of business and no longer contribute into the Teamster plans; and disparate pension benefits at different Teamster funds for the same UPS work and length of service. Mr. Black would not specify which Teamsters plans UPS considers most troubling in terms of funding level.
The Central States plan is 60.5% funded as of Nov. 1, 2005, according to a Teamsters November 2006 report. To improve funding, the plan is seeking to increase contributions for each renewal period.
Western Conference reported its plan no longer had an unfunded liability as of 2006 and this means there is no withdrawal liability for employers who withdraw from the plan in 2006, it said in a report.
The Western Conference plans investment performance remains stellar, ranking in the sixth percentile of Taft-Hartley trusts over the past 10 years, as measured by the Wilshire Cooperative Universe, the report said.
Mr. Black said UPS proposed in 1997 contract negotiations that workers could withdraw from Teamster plans and UPS would create a new pension plan for its Teamster employees, but the Teamsters opposed the idea and UPS didnt pursue it, Mr. Black said. A UPS spokeswoman at that time said the proposal would increase pension benefits for Teamster members by 50%. The Teamsters Mr. Munroe would not comment on the 1997 UPS offer.
Teamsters Central States, Southeast and Southwest Areas Pension Fund reported a 14.45% preliminary return for 2006, according to a report filed in U.S. District Court in Chicago under a court-supervised consent decree with the Department of Labor dating to the 1970s. The fund had $20.7 billion in assets as of last Dec. 31, the report said.
Mr. Skillman said he believes the APWA could improve pensions in part by taking the UPS employees out of the costly Teamster funds and making management under the APWA more transparent. He said details about the management of the Teamsters funds is difficult to obtain. He said some of the Teamsters funds, especially the Central States, have underperformed.
Jack Marco, chairman of Marco Consulting Group, Chicago, which specializes in consulting to jointly trusteed plans, said the decline of contributing employers in Teamster funds puts more burden on UPS to subsidize benefits of non-UPS employees. But he said it an an industry problem, not a pension problem with other companies going out of the trucking business.
If these employers stayed in business, youd have a healthy pension fund, Mr. Marco said. UPS is stuck with the bill for these guys.
I think for all employers in the fund, it is a rotten deal some employers went out of business and didnt pay their (pension) bill, Mr. Marco said. Employers have a legitimate gripe.
Mr. Marco said the disparity in pensions among UPS employees depending to which Teamster they belong is not ideal. Unfortunately, that is the way the world evolved, he said. If there was one plan for everyone, then it could be fairer.