Teamsters Union Sues UPS Over Controversial Driver Buyout Program

The Teamsters Union has filed a lawsuit against United Parcel Service (UPS), alleging that the company’s newly announced driver buyout initiative violates the national labor contract agreed between the two sides in 2023.

The lawsuit, filed in a Massachusetts district court, escalates tensions between the delivery giant and the union, which represents nearly 340,000 UPS workers - the largest Teamsters-represented workforce at any U.S. company.

Dispute over ‘Driver Choice Program’

According to the union, UPS’s upcoming Driver Choice Program goes far beyond earlier voluntary buyout offers that were aimed at senior drivers nearing retirement. The new plan, expected to be formally announced this week, would reportedly offer drivers a one-time lump-sum payment in exchange for a legal commitment to never work for UPS again.

The Teamsters argue that the expanded scope of the program breaches multiple provisions of the National Master Agreement, citing at least six violations in court filings. The union also claims UPS failed to respond to more than 57 formal requests for information and documentation related to the revised buyout plan since late January.

Job cuts and network restructuring

The legal action comes amid a broader restructuring at UPS. In January, the company announced plans to cut up to 30,000 jobs and close 24 facilities as it shifts away from lower-margin deliveries, particularly those linked to Amazon, its largest customer.

This follows an earlier network reconfiguration announced in mid-2025 that included 20,000 job cuts and the closure of 73 facilities. UPS has said these moves are aimed at improving long-term profitability and operational efficiency.

UPS response

In a statement to Reuters, UPS said it had engaged with the Teamsters on the issue earlier this year and would address the union’s concerns through appropriate legal channels. The company added that the lawsuit would not affect day-to-day operations.

Competitive pressure in delivery sector

UPS operates in a highly competitive delivery market where major rivals such as FedEx and Amazon’s logistics arm are not unionized and typically offer lower pay structures. Analysts note that this cost gap continues to pressure UPS as it balances labor commitments with profitability goals.

The lawsuit adds another layer of uncertainty as UPS navigates workforce reductions, shifting customer priorities, and intensifying competition in the global logistics sector.