A Looming UPS Strike and Potential Presidential Intervention

Andrew Bentivoglio

I. Background and Upcoming Expiration at UPS

The current collective bargaining agreement between United Parcel Service (“UPS”) and approximately 340,000 of its Teamsters Union employees is set to expire at the end of July 2023.[1] The union has been signaling a willingness to strike over dissatisfaction with a two-tiered employment model, temperatures in delivery vans, and benefits since 2022.[2] Observers are paying extra attention to this expiration because UPS workers are alone among major private delivery companies in having a union.[3] If negotiations break down over the summer and a strike seems imminent, UPS or other companies that rely on its services may turn to the federal government in hopes that President Biden’s intervention in last year’s freight rail labor dispute signaled a willingness to get involved again. President Clinton declined to exercise legal authority on behalf of UPS during the last worker strike in 1997, in which the union won significant increases in pay and benefits. [4]

In the freight rail labor dispute of 2022, rail workers protested unpredictable scheduling practices and a lack of traditional sick days.[5] Pressure to keep trains running ultimately beat out Joe Biden’s very public promise to be the “most pro-union President”[6]: President Biden’s exercise of statutory authority to facilitate a resolution was instrumental in structuring the congressionally-imposed labor agreement that unions and employers were ultimately forced to accept.[7] However, because of the unique statutory regime governing freight rail, if the President were to intervene on behalf of UPS in a potential upcoming dispute, he would have to use different legal authority than he did last year.

II. The President's Legal Authority to Intervene in Labor Disputes: The Railway Labor Act and Taft-Hartley

The Railway Labor Act (“RLA”) constrains rail workers’ right to strike through the National Management Board (“NMB”), an independent federal agency with authority to force mediation between the disputing parties.[8] When the President finds that a labor dispute threatens “substantially to interrupt interstate commerce to a degree such as to deprive any section of the country of essential transportation service,” the RLA authorizes the creation of a Presidential Emergency Board (“PEB”).[9] The PEB has authority to order a “cooling off” period of 60 days in which parties must continue status quo operations and ultimately is designed to serve as a neutral, non-binding arbitrator between labor and employers.[10] When mediation and cooling off fail, both parties retain the right to engage in self-help such as strikes or lockouts. However, Congress retains the ability to impose a labor agreement under its Commerce Clause power. President Biden appointed a freight rail PEB in July of 2022[11] and signed a bill imposing a final agreement on December 1, 2022.[12] The final agreement closely tracks the recommendations from the PEB.

The National Labor Relations Act (“NLRA”) protects the rights of most other workers in the U.S.,[13] including the unionized workers at UPS. Section 7 of the NLRA specifically protects workers’ right to “engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,” which includes striking, though that right can be regulated.[14] The Labor Management Relations Act (also known as the Taft-Hartley Act, or “Taft-Hartley”) is one such regulation of that right.[15] Taft-Hartley authorizes the President to seek an 80-day injunction against a lockout or strike when such an action would “[affect] an entire industry or a substantial part thereof”[16] or “imperil the national health [or] safety.”[17] Similarly to the PEB’s mechanism, this injunction is referred to as a “cooling off” period.

III. The Most Recent Taft-Hartley Interventions

George W. Bush was the last President to successfully invoke Taft-Hartley powers when his Justice Department secured an injunction to keep West Coast ports open during a 2002 lockout.[18] The Bush administration successfully argued that a potential disruption of the shipping of military goods met the standard to “imperil national health or safety.”[19] President Bush was also the first President to successfully use Taft-Hartley since Richard Nixon interrupted a longshore worker strike at West Coast ports in 1971.[20] In 1971, the District Court granted an injunction on the basis that a strike would lead to disruption of the “health and welfare of the country.”[21] Just before that, Lyndon B. Johnson’s administration secured an injunction in 1968 in order to interrupt a dock strike on the East and Gulf Coasts.[22]

These injunctions have mixed results in achieving resolution. In 2002, the longshore workers’ union and port operators reached an agreement before the expiration of the Taft-Hartley injunction.[23] In 1971, the 80-day injunction expired and ports ended up closed for 130 days before both sides reached an agreement.[24] After the cooling-off period ended in 1968, the longshore workers resumed a strike which ended up lasting into 1969; Congress never imposed an agreement.[25] Viewed in light of these port-centered labor injunctions, Congress’ swift imposition of a labor rail freight agreement in 2022 was much more decisive.

IV. Implications for Future Labor Disputes

A potential UPS strike doesn’t neatly map onto the form of either a rail or port dispute. UPS likely handles a higher percentage of consumer goods than coastal ports, which have significant contact with heavy industrial and military cargo.[26] Freight rail similarly ships hazmat loads and other industrial chemicals.[27] This may make it harder for the government to argue that a disruption to UPS operations would present the same level of danger to the health and safety of the nation. However, UPS ships pharmaceuticals and other healthcare products.[28] Depending on its share of that market, the company many try to persuade the government that a disruption to its operations would necessarily impact the health of the nation. Either way, the government may have a stronger argument for a Taft-Hartley injunction under the theory that a UPS worker strike would affect a “substantial part” of an “industry.”[29]

But which industry should the courts consider in this analysis? UPS offers diversified shipping solutions[30] across industries, including to large national retailers.[31] The government could argue that such breadth of retail disruption, for example, would be enough to support a Taft-Hartley injunction. This argument would necessarily require a fact-intensive inquiry. It may also fail regardless of market share figures if delivery rivals would be able to quickly absorb any customer diversion from UPS.

The government could also argue that a strike would disrupt global supply chain operations across industries and that “logistics” is the relevant industry to consider. This line of attack would be more speculative, but courts likely have some understanding of how interconnected the global transportation economy is.[32] The government may think twice about this argument. If successful, it would set precedent for construing the effects of direct strikes extremely broadly, something unions would likely dislike long after this specific dispute.

V. Conclusion

Labor organizers and employers will closely watch the UPS negotiations, set to begin in April.[33] Other collective bargaining agreements in the healthcare, entertainment, and automotive industries collectively representing nearly 400,000 other workers will also expire this year.[34] Along with President Biden’s nomination of Julie Su for Secretary of Labor,[35] the administration’s position toward these negotiations may be the biggest signal of the President’s attitude toward labor in 2023.

 

[1] Rebecca Picotto, UPS and the Teamsters Prepare for High-Stakes Talks with Union Contract Set to Expire, CNBC (Feb 3, 2023), https://www.cnbc.com/2023/02/03/ups-teamsters-labor-fight-union-contract.html.

[2] Id.

[3] The United States Postal Service (USPS) also has a union, but private competitors like FedEx and DHL do not.

[4] Peter Behr & Beth Berselli, UPS Ready to Roll After 15-Day Strike, The Wash. Post (Aug. 20, 1997) https://www.washingtonpost.com/archive/politics/1997/08/20/ups-ready-to-roll-after-15-day-strike/6e2a1eb0-7703-4aa6-919e-22153b0e7261/.

[5] Noam Scheiber, Key Freight Rail Union Rejects Deal, Increasing Strike Risk, N.Y. Times (Nov. 21, 2022) https://www.nytimes.com/2022/11/21/business/economy/freight-rail-union-contract.html.

[6] Remarks by President Biden in Honor of Labor Unions, The White House (Sep. 8, 2021) https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/09/08/remarks-by-president-biden-in-honor-of-labor-unions/ (“I intend to be the most pro-union President leading the most pro-union administration in American history.”). For another example of how trains inspire strong feelings, see 2022’s The Fabelmans, directed by Steven Spielberg.

[7] Michael D. Shear & Noah Scheiber, Congress Looks to Intervene in Rail Dispute as Strike Deadline Looms, N.Y. Times (Nov. 28, 2022) https://www.nytimes.com/2022/11/28/us/politics/biden-rail-strike-congress.html.

One freight rail carrier, CSX, did eventually reach a deal to give its operators additional sick days just last month. Karine Jean-Perre from the Biden Administration said this came about after "continued advocacy and involvement from the Biden administration." Andrea Hsu, Rail Workers Never Stopped Fighting for Paid Sick Days. Now Persistence is Paying Off, Nat’l. Pub. Radio (February 10, 2023) https://www.npr.org/2023/02/10/1155763336/freight-rail-workers-union-paid-sick-leave-bernie-sanders-csx.

[8] HIGHLIGHTS OF THE RAILWAY LABOR ACT ("RLA"), AND THE U.S. DEPARTMENT OF TRANSPORTATION'S ("DOT") ROLE IN RLA DISPUTES, The Department of Labor Office Of Policy, Office Of Rail Policy and Development & Federal Railroad Administration https://railroads.dot.gov/sites/fra.dot.gov/files/fra_net/1647/Railway%20Labor%20Act%20Overview.pdf.

[9] Id.

[10] 45 U.S.C. § 160.

[11] Exec. Order No. 14,077, 87 Fed. Reg. 43,203 (July 15, 2022).

[12] Zolan Kanno-Youngs & Emily Cochrane, Biden Signs Legislation to Avert Nationwide Rail Strike, N.Y. Times (Dec. 2, 2022) https://www.nytimes.com/2022/12/02/us/politics/rail-strike-biden.html.

[13] Exemptions beyond rail workers include farm workers, see Maurice Jourdane, The Constitutionality of the NLRA Farm Labor Exemption, 19 Hastings L.J. 384, 385 (1968) (“it was deemed wise for ‘administrative reasons’ to exclude agricultural laborers, domestic servants, and persons employed by their parent or spouse.”) (quoting S. RF. No. 573, 74th Cong., 1st Sess. 7 (1935)).

[14] Auto Workers v. Wis. Bd., 336 U.S. 245 (1949).

[15] Taft-Hartley specifically does not alter the Railway Labor Act. 29 U.S.C. § 182 (“The provisions of this subchapter shall not be applicable with respect to any matter which is subject to the provisions of the Railway Labor Act”).

[16] 29 U.S.C. § 176.

[17] Id.

[18] David E. Sanger with Steven Greenhouse, PRESIDENT INVOKES TAFT-HARTLEY ACT TO OPEN 29 PORTS, N.Y. Times (Oct. 9, 2002) https://www.nytimes.com/2002/10/09/us/president-invokes-taft-hartley-act-to-open-29-ports.html.

[19] Jared S. Gross, Yet Another Reappraisal of the Taft-Hartley Act Emergency Injunctions, 7 U. PA. J. Lab. & Emp. L. 305, 320 (2005).

[20] Id.

[21] Robert M. Smith, PRESIDENT USES TAFT‐HARTLEY ACT IN DOCK WALKOUTS, N.Y. Times (Oct. 5, 1971) https://www.nytimes.com/1971/10/05/archives/president-uses-tafthartley-act-in-dock-walkouts-5man-board-will.html.

[22] Id.

[23] Scott Mail, FreightWaves Classics: Lockout at West Coast Ports Caused Economic Havoc in 2002, FreightWaves (Oct. 20, 2021) https://www.freightwaves.com/news/freightwaves-classics-lockout-at-west-coast-ports-caused-economic-havoc-in-2002.

[24] Id.

[25] Dock Strike (1968), Texas Archive of the Moving Image, https://texasarchive.org/2018_00420.

[26] See Sanger note 18 supra.

[27] Why Freight Rail is the Safest Mode for Hazmat, Amer. Ass’n of R.R.’s (last visited March 5, 2023).

[28] Pharma Logistics Solutions, UPS Healthcare (last visited March 5, 2023) https://www.ups.com/us/en/healthcare/solutions/pharma.page#:~:text=Does%20UPS%20Healthcare%20offer%20priority,and%20control%20along%20the%20way.

[29] 29 U.S.C. § 176.

[30] UPS Shipping Services, https://www.ups.com/us/en/support/shipping-support/shipping-services.page (last visited March 5, 2023).

[31] For example, UPS handled an estimated 24% of Amazon deliveries in 2021. Hope King, Amazon gains on UPS in package delivery volume, Axios (May 23, 2022) https://www.axios.com/2022/05/24/amazon-shipping-fedex-ups. In 2022, it acquired Delivery Solutions, a startup company which works with Wal-Mart. Emma Cosgrove, UPS has acquired logistics startup Delivery Solutions, a major partner for Walmart's GoLocal delivery network, Insider (May 31, 2022).

[32] See Vivian Lee & James Glanz, How One of the World’s Biggest Ships Jammed the Suez Canal, N.Y. Times (Jul. 17, 2021) https://www.nytimes.com/2021/07/17/world/middleeast/suez-canal-stuck-ship-ever-given.html.

[33] Rebecca Picotto, UPS and the Teamsters Prepare for High-Stakes Talks with Union Contract Set to Expire, CNBC (Feb 3, 2023), https://www.cnbc.com/2023/02/03/ups-teamsters-labor-fight-union-contract.html.

[34] Ian Kullgren & Rebecca Rainey, Expiring Labor Contracts Across Sectors Threaten Unrest in 2023, Bloomberg L. (Dec. 29, 2022).

[35] Noam Scheiber, Biden Nominates Julie Su as U.S. Labor Secretary, N.Y. Times (Feb. 28, 2023) https://www.nytimes.com/2023/02/28/business/economy/julie-su-labor-secretary.html.