UPS to place cap on $150,000 driver buyouts following Teamster negotiations

Shipping giant United Parcel Service (UPS) reached an agreement with the International Brotherhood of Teamsters, placing limits on driver buyout program.

On Sunday, April 5, the Teamsters announced an agreement had been reached with UPS over the company’s Driver Choice Program (DCP).

Under the new agreement, UPS may only offer $150,000 payments for early retirement to 7,500 drivers.

The payments will be offered to long-haul feeder drivers and Regular Package Car Drivers in all regions based on seniority.

“This outcome aligns with our objective to provide all U.S. drivers with options as we continue to reconfigure our network. The DCP has been well received by our employees, with strong interest across the country. Applications will be approved based on seniority and the needs of the business, as originally planned,” UPS said.

Teamsters say that UPS has also agreed not to offer any additional severance programs through the span of the current contract, which remains in effect through July 31, 2028.

Teamsters say that that President Sean O’Brien “successfully pushed UPS into negotiations in the wake of national grievances filed against the package giant over its DCP, which UPS pursued in February without agreement from the union.”

psFollowing a push from Teamsters, UPS withdrew the DCP offer in 13 states in March prior to negotiations.

“UPS never had the contractual right to unilaterally offer driver buyouts, but with enough pressure and member solidarity UPS finally did the right thing by putting its commitments to hardworking Teamsters down in writing,” O’Brien said. “Lifelong Teamsters who have given so much of themselves to making UPS the king of parcel delivery will have the right of first refusal on any severance agreements. Union seniority and the rights of all our members will be honored. UPS will no longer have the chance to go around the union without giving Teamsters the respect they deserve at the bargaining table.”

Last summer, UPS made a similar buyout offer to drivers called the Driver Voluntary Separation Program (DVSP), offering $1,800 per year of service at UPS, with a minimum payout of $10,000.

UPS first announced plans to reduce its workforce in part through buyouts in a January 27 earnings call. Company officials said they would cut as many as 30,000 jobs worldwide and to close more than 20 facilities in 2026.