A US federal judge has dismissed an attempt by the International Brotherhood of Teamsters to block a $150,000 (£118,000) voluntary buyout scheme for drivers at United Parcel Service (UPS).
The ruling clears the way for the parcel delivery giant to begin informing employees about the programme as early as next week, as part of a wider restructuring of its delivery network.
UPS says it needs fewer drivers because parcel volumes have fallen, reflecting weaker demand and changes in its business mix.
Court rejects union’s injunction request
Judge Denise Casper of the US District Court in Massachusetts ruled that the union had failed to demonstrate “irreparable harm” that would justify an injunction.
Courts are generally barred from intervening in peaceful labour disputes where arbitration is available as a means of resolving disagreements. The judge said an arbitrator would retain the authority to reinstate employees if any part of the separation programme was found to breach contractual terms.
She also noted that union members could face greater harm if UPS were forced to rely solely on compulsory redundancies and natural attrition to reduce headcount.
Union challenges legality of scheme
The Teamsters argued in a petition filed on 8 February that the voluntary separation plan violated the national master agreement, as it had not been negotiated with the union and undermined previous hiring commitments.
The union also raised concerns that drivers who accept the lump-sum payment and resign would not benefit from any later arbitration ruling in their favour. Under the proposed terms, drivers who take the payout must agree not to seek employment with UPS again.
According to reports from a court hearing, the union expects around 10,000 drivers to accept the offer.
Major restructuring under way
UPS signalled during its January earnings call that it intends to eliminate around 30,000 frontline roles this year, partly through a second driver buyout programme and the closure of about two dozen facilities.
Average daily parcel volumes fell 8.6% in 2025 and were down 10.8% year-on-year in the fourth quarter.
The company said demand has softened as e-commerce growth normalises following the pandemic. It is also reducing volumes from Amazon under a mutual agreement and shifting some lower-margin economy shipments to the US Postal Service.
UPS says the purpose of the buyout scheme is to limit the number of drivers who may otherwise face compulsory redundancies.
More generous than previous offer
The new “Driver Choice” programme will be extended to around 105,000 drivers, regardless of seniority. Those who accept will receive a $150,000 lump sum in addition to previously earned benefits.
Participants must waive future employment rights with UPS and forgo union representation in any grievances related to the agreement.
A previous buyout scheme launched last autumn offered $1,800 per year of service, with a minimum payout of $10,000. Only about 3,000 drivers accepted that offer.
UPS had initially planned to brief staff on the new scheme earlier this month but paused the rollout pending the court’s decision. Voluntary departures are expected to begin at the end of April.
The case highlights mounting pressure within the global parcel and logistics sector as operators adjust capacity following the pandemic-driven surge in online shopping.
