Behind The Brown Curtain - Chapter 2
N.A.B.E.R. INC.National Alliance of BROWN Employees and Retirees Inc.
Unfortunately, that clause of the contract ended up being a virtually unenforced dead letter. Which meant that a lot of UPS workers were still having career ending injuries from heavy or awkward lifting.... Which, along with workers quitting, kept UPS employee turnover up. 

Those were big upsides..but there was a downside too. 

UPS still had a two tier wage system, paying Burger King-level wages to most of their workers. And, they still had the right to have unlimited part timers...and the firm's sort and loading operations were still almost entirely composed of part timers..along with a new wrinkle..the air express drivers, part time drivers who only delivered air express envelopes, rather than packages, and drove vans, instead of package cars. 

But, unlike the 1985, 1988 and 1991 pacts, which actually were voted down by a majority of UPS workers, and were only ratified because the IBT at that time required 75% of workers to vote no before an agreement was rejected, the 1994 UPS IBT national agreement was ratified easily. 

In part, this was because it was a genuinely better pact..especially the innocent until proven guilty language. But, also, TDU had organized the 85, 88 and 91 "Vote No" campaigns...because the old guard was still in power at the time.. In 1994, TDU's faceman, Carey, was in charge..and they helped get the pact ratified. 

The 1994 agreement had made some real changes..but most of big brown's labor practices had remained pretty much the same..other than losing the option of firing workers at will. 

The company still practiced it's systematic employee abuse, and had managed to achieve 400% annual employee turnover through voluntary quits and employee injuries. Even after they lost the right to fire people whenever they wanted, UPS supervisors still could make a person's life so miserable that they'd want to quit..or push them so hard that they end up hurting themselves, and having to leave. 

By this time, UPS had already institutionalized the practice of hiring transient workers for it's part time jobs..in particular college students..with the specific intent of getting them to quit as soon as possible. 

UPS will often flatly refuse to hire part time loading and unloading workers who they suspect might aspire to a career at big brown. 

United Parcel Service was still expanding, as they'd been since the early 1960's..and the company was planning it's most aggressive expansion yet... 

The reason for the sudden growth spurt? Simple. Big brown was still the dominant package shipping company..but, they faced some stiffening competition.. mainly from a firm called Federal Express. 

FedEx (as the company is commonly known) was founded in the late 1950's by a former US Marine Corps fighter pilot named Fred Smith. Fred based his company around an air freight operation, centered at the airport in his hometown of Memphis..but, they ship documents and small packages to just about anyplace in the United States...just like UPS does. The only difference is, FedEx is more document oriented than UPS, which is still at it's heart a package operation. 

Just like big brown, FedEx also runs it's service centers in militaristic fashion..the company is very rigid about uniforms, facial hair and hair length, and FedEx is harsh on the "least best employee"..even if that "least best" worker meets company production standards. And, unlike UPS, which lost the right to fire at will in 1994..FedEx still could can people any time they wanted to. 

But, unlike UPS, FedEx doesn't apply it's militaristic rigidity to customer service. Big brown can be very inflexible when it comes to pickups and deliveries..and tends to follow the customer service motto of "the customer is always wrong". 

Oh, there's just one other difference between UPS and FedEx...Fred Smith doesn't have to deal with a union. 

The United Auto Workers had launched a failed organizing drive at FedEx's Eastern Pennsylvania operations..but it fell apart, the UAW pulled out, and, as usually happens with failed unionization drives, a lot of pro union FedEx workers got fired. 

The Teamsters had made noises about unionizing FedEx..but, nothing more came of it than some leafleting, and a website that the union didn't even pay for.. Pro Teamster FedEx worker Fred Osiowy paid for the site out of his own pocket. 

Both the UAW and IBT used the same excuse for abandoning FedEx workers..the Railway Labor Act. The US Department of Labor considers Federal Express to be a cargo airline..and, at the time of that DOL ruling, almost all of FedEx's freight was carried at some point by an aircraft. 

The RLA requires that a union organize on a company-wide basis. The UAW was only interested in organizing FedEx in Philly...the IBT also only wanted to organize FedEx facilities piecemeal. You can do that under Taft Hartley..but not under RLA. 

But, instead of thinking big, and launching a national campaign..the Auto Workers and Teamsters both bowed out... That was an odd excuse in the IBT's case..since they actually have an Airline Division, and represent workers at a lot of RLA regulated airlines, United, NWA..and, a cargo airline that's not that much different that FedEx in terms of structure, Airborne Express. 

Airborne Express..a double breasted unionized firm that was the 3rd largest package company in the country, also happened to be another major UPS competitor. 

Airborne, like big brown, was also a Teamster signatory contractor..at least in part. 

The company didn't have it's own private special agreement like UPS did.. 

Airborne is, technically, covered under the NMFA..sort of 

That is, they have one of those substandard "white paper agreements". 

That agreement gives them one big advantage over UPS..Airborne gets to operate largely non union. Only 9,000 of the 30,000 workers that serve Airborne's customers are in the Teamsters..about 90% of their market area in the US is covered by non union subcontractors... 

The only Airborne workers who are union are those drivers and loaders who work in big cities, and the pilots and mechanics at the carrier's Ohio-based aviation operation. 

Airborne also gets to use lots and lots of part timers..but, unlike UPS, Airborne's Teamster workforce is majority full timer, and they don't get to abuse their workers as much as big brown does. Also, casual workers at Airborne eventually get to be full timers. 

UPS full timers make more money than their Airborne counterparts..but, Airborne's part timers and casuals make considerably more than their fellow part time Teamsters at UPS...and, Airborne's part timers are more likely to eventually get to be full time workers. 

Airborne is also a somewhat less abusive place to work..they don't have all that mind control crap that UPS workers have crammed down their throats, nor does Airborne have Federal Express' Parris Island-style Marine Corps discipline. 

But, like all airfreight shipping companies, there's always that pressure to rush rush rush. 

From a business angle, Airborne had a slight edge on UPS..big brown covers more areas..but, Airborne is a lot more flexible to ship with than big brown. 

Another double breasted Teamster employer, Roadway Express, was also trying to horn in on UPS's business. Roadway set up a non union package company, Roadway Package Service (known as RPS..sounds kinda like "UPS", doesn't it? That wasn't an accident...). 

RPS's package cars, bedecked in a white with orange and blue trim color scheme that was damn near identical to FedEx's, were larger than UPS's brown package cars, or FedEx's white, orange and blue vans, or Airborne's silver and red vehicles, enabling them to cover longer routes, and carry more cargo, with less driver labor. 

And, they had another competitive advantage..their drivers were owner operators..RPS didn't even have to pay for it's own trucks..their workers did. 

This made labor discipline and motivation a hell of a lot simpler for RPS. 

Roadway didn't need any elaborate psychological warfare mind control schemes like UPS had, or military discipline like FedEx...they made their people work hard by the simple expedient of paying them by the package, rather than the hour. 

The more packages you moved, the more you got paid..it was just that simple. And, with piece-rates as low as $ 2 bucks a package..that made RPS's drivers push themselves to the limit and beyond. 

The only way UPS could beat FedEx, Airborne and RPS was to expand...if they provided better service, and served more destinations, the shippers would have to use big brown, rather than it's competitors. 

Problem was, they needed money to expand..a hell of a lot of money..billions of dollars. 

But UPS, as a private partnership, couldn't just go to Wall Street and get money by selling more stock, the way a public corporation could. And, historically, UPS's management hated debt, (because that would make the firm dependent on the banks they were indebted to) so they couldn't really go to the banks... 

The only realistic source of capital was..those payments that they made to the Teamster welfare and pension funds that never got paid out in benefits, due to UPS's high labor turnover. 

Big brown wanted to benefit from that money. Rather than giving it to the IBT and, in effect, subsidizing their competitors like Roadway and Airborne Express. 

That was UPS's # 1 goal entering into the 1997 talks with the union. 

As we've seen, by 1997, UPS had grown a hell of a lot since they got that big labor concession way back in 1962... The IBT, on the other hand, was heading into a tailspin. 

In fact, the union was rapidly shrinking. 

The union was no longer dominant in the freight industry. At one time, about 90% of the freight industry drivers and dockworkers were union. No more, it was now down to 10%..and falling. 

For years, the union had been allowing substandard wages and conditions for certain trucking carriers, under so called "white paper agreements". 

By 1973, the IBT actually legalized "double breasting"..that is, union carriers could rip up their successorship clauses, and openly set up non union subsidiaries. 

This was the "special commodities rider" to the 1973 National Master Freight Agreement..and the excuse was that the union common carriers wanted to, of all things, haul fresh fruit and vegetables. But, for some bullshit reason or other, they claimed that they couldn't haul fruit with union drivers. 

The union fell for it, and, with astonishing speed, Consolidated Freightways, Yellow and Roadway set up non union subsidiaries. They were soon to be followed by almost all of the IBT's signatory carriers. 

And, do I even need to tell you, they were hauling more than fruit? 

Within 5 years, the feds deregulated road freight. Which meant that anybody could get into the interstate common carrier freight business..and anybody did. And most of those anybodies were non union. 

The Teamsters made almost no effort to fight deregulation.. No mass demonstrations, no strikes, no truck motorcades to Washington..nothing. 

Instead, the Teamster bosses relied on trying to bribe a Senator, one Howard Cannon (R - Nevada) . Astoundingly enough, despite a long history of gangster unionism and labor racketeering in the IBT, the Teamster bosses even fucked that up... And deregulation came in like a whirlwind. 

Of course, deregulation wouldn't have hurt so bad if it wasn't for that "special commodities rider" the union signed in 1973. That's what had allowed the non union sector to rise so quickly into an almost totally unionized industry 5 years before the 1978 deregulation law. 

And, of course, the union could have gone out and done what it did back in 1938..that is, launch a national organizing campaign in the freight industry. 

But, that would have involved the mobilization of thousands of workers..something that the Teamster bosses were terrified of doing..because mobilized workers might just throw out the misleaders who were steering the union to oblivion. 

And, no way were the Teamster bosses going to risk losing the Lincoln Town Cars and Cadillac Coupe De Villes, the 6 figure multiple salaries, double and triple pensions, no show jobs for unemployable relatives and mistresses, and all the other perks of being an IBT union boss in the late 20th century. 

They'd even be willing to sacrifice the IBT's future, just to preserve their short term enrichment. 

So, instead of organizing a fightback, the labor bosses meekly allowed the combined effects of deregulation and the "special commodities rider" to basically all but kill the Teamsters as a freight union. 

The IBT was also shrinking in other businesses. 

Like construction.. That industry saw a massive wave of union-busting that reduced union market share from over 70% at the begriming of the 1970's to under 13% in the 1990's. 

The Teamsters managed to hang on to some of the ready mix concrete firms that were the core of the IBT Building Materials and Construction Division...they even kept some of the lumberyards under contract. 

But, many general contractors, excavation and foundation outfits and heavy construction firms had gone non union too. Those companies, of course, also ripped up their IBT agreements, and made their drivers quit the Teamsters and go non union. 

At the seaports, the Teamsters basically imploded, rapidly falling from representing nearly 100% of the drivers in the industry in 1970 to almost 0% in the 1990s. The sea freight hauling companies made their drivers become owner operators..and the union didn't try to stop them. Nor did they try to keep the owner operators in the union. So, that industry went open shop without a fight. 

By the late 1990's, the IBT was in tatters, with only scattered remnants remaining in it's once core industries of freight, port trucking and construction. Membership was down, reduced from a peak of 2.3 million in 1975 to barely 1.5 million in 1997. 

And a lot of those members were in "nontraditional" industries like civil service, health care and general manufacturing, far removed from the historic Teamster driver and warehouse worker base. Just about all that was left of the old IBT was..UPS, carhauling and warehouse. 

Beyond the membership loss..there was the aftermath of the criminal investigations. For years, many IBT bosses had ties to < Costa nostra > influenced businessmen in the trucking and construction industries. 

The mobsters used this union influence to get white paper agreements, and to use Teamster pension funds to finance mafia-controlled investments..most prominently, the construction of the casinos of Las Vegas was financed by the Teamsters..and, since those casinos were, at the time, < cosa nostra > owned, the IBT didn't make a dime...cause the gangsters defaulted on all their loans...and the IBT didn't dare foreclose!!! 

Problem was, Corporate America tired of paying the "mob tax" in construction and trucking..so the Feds came in and cleaned out a lot of the racketeer influence. 

Among other governmental sanctions, the Teamsters were forced to have one member one vote elections for general officers..and, the union's Taft Hartley funds were taken away from the mob, and given over to respectable Wall Street money managers. 

Of course, those funds had been greatly weakened by the decline of the union during the 1980's and 1990's, simply because 800,000 less people were having contributions paid on their behalf into these funds. And, of course, mafia looting of many of those funds, particularly the huge Central States, Southeastern and Southwestern Pension Fund, had greatly weakened them. 

Of course, the remaining members were a hell of a lot better off having their funds controlled by legit bankers...rather than by sticky fingered gangsters. 

That newly established Wall Street control of Teamster funds would play a major factor in the 1997 UPS strike....even though most press accounts at the time, especially the "pro labor" ones, ignored that angle of the story..and today, many labor historians have already written a basically incorrect account of the 97 strike as some kind of historic "battle for the part timers". 

That was the climate that the 1997 IBT UPS national agreement was bargained in. 

The company's basic demand was control over the pension and welfare funds. If those plans came under company control, they'd be over-funded..cause most UPS workers quit way before they were ever eligible for health insurance, let alone vested for a pension. 

The company could then use that money to finance it's expansion, and fight it's competitors, FedEx, Airborne Express and Roadway Package Service. 

The union had no intention of letting big brown have that money. UPS kept the Teamsters Taft Hartley funds afloat, by subsidizing coverage for all those retirees who's employers were now non union. There was no way they'd let that money go without a fight. 

Also, the Wall Street interests, who now managed the IBT's funds, were also reluctant to let that money go. ESPECIALLY to a company like UPS.. The financiers hate independent companies like UPS, who's owners control all the stock, and can ignore the dictates of the capital markets. 

As if that wasn't enough, UPS's abysmal customer service practices had made it very unpopular with it's shippers..including the very same money center banks who now controlled the Teamster funds. Wall Street liked UPS's hard nosed labor relations..but, they didn't like the fact that big brown was just as rigid with it's customers..they wanted to make United Parcel Service be more like FedEx, Airborne or RPS..harsh and severe to the employees, but gentle and flexible towards the customers. 

A battle line was drawn over control of the UPS welfare and pension fund contributions. 

The union bosses were even willing to call a strike to keep control of that money. That was a pretty radical step for union bosses in the late 1990's..most labor leaders are scared to death of class conflict with the employers..it goes against their belief in "labor management partnership". These days, when unions do strike, it's usually a case like this one..a battle for control of Taft Hartley benefit funds. 

Of course, the Teamster bureaucracy, especially the IBT's reformer General President, Ron Carey, couldn't very well tell the workers that this strike would be all about who'd control that lake of capital created by UPS's high labor turnover. That wouldn't sell very well, ESPECIALLY with the part timers. 

Instead, Ron Carey's IBT framed the 1997 negotiations in terms of the part timer issue. 

This whole media campaign was concocted, based on the argument that the IBT was the standard bearer in the fight for creating full time employment for part timers. Specifically, the Teamsters came up with a plan that would, supposedly, create full time jobs for 20,000 high seniority UPS part timers (for a UPS part timer, a year or more counts as "high seniority"..cause most part time loaders either quit in disgust or are out on comp within just a few months of hire). 

Under Carey's plan, UPS would take away hours from part timers who'd quit or become disabled, and give those hours to that select group of high seniority part timers, thus creating those 20,000 full time jobs. 

Of course, the great bulk of UPS part timers, over 75% of the 80,000 part timers on the job at the time, wouldn't gain a damn thing from the job combination. 

Beyond the proposal itself, it's significant what Carey DID NOT propose. 

Most Teamster agreements have something called an "8 hour minimum"..requiring that all workers who are called in to work get a minimum of 8 hours pay, irregardless of hours worked. Also, under many Teamster agreements, all permanent employees get a minimum of 5 days of work a week. 

Considering United Parcel's affluence as a company...it's odd in the extreme that the reformer Carey did not even think of demanding a 40 hour guarantee for ALL UPS workers, thus in one fell swoop abolishing the 1962 unlimited part timer deal. 

Especially since UPS was expanding...in the 5 years after the 1997 agreement was ultimately signed, big brown created 53,000 new part time jobs, and 47,000 new full time jobs. 

As I suggested earlier in this article, the union could have demanded that the company create no new part time jobs..and reduce the number of new full time jobs by 13,500. The remaining 1.6 million new hours could have given every single one of UPS's 80,000 part timers an 8 hour day, and 40 hour week. 

Of course, if they'd done anything like that, UPS only would have added 32,500 new members to the union, and that just wouldn't do. 

At the time, the Teamsters union was losing about 2,000 existing members a week..those 110,000 new UPS Teamsters would keep the union's membership at 1.4 million. That was the only way to keep IBT membership numbers up, since, like most other AFL-CIO unions these days, the Teamsters organizing efforts were, for the most part, complete failures. 

And, considering UPS's corporate culture of institutionalized employee abuse, and the resultant 400% annual employee turnover, to keep it's new headcount of 230,000 workers, UPS would have to hire 920,000 new Teamsters a year. 

Every one of whom would have to pay an initiation fee to the IBT. 

Bottom line, the interests of the great majority of UPS part timers were sacrificed to prop up the collapsing finances of the International Brotherhood of Teamsters...and to keep the welfare and pension funds in the hands of Wall Street bankers and Teamster union bosses, rather than having them under UPS corporate control. 

In any event, in the summer of 1997, the strike began. 

And, astonishingly enough, just about 100% of the part timers joined in the strike...only a handful of UPS workers scabbed.. 

Most of them were full timers, folks who had been brainwashed by big brown's cult of "methods" and productivity, Manchurian candidates in brown uniforms, betraying their brothers and sisters, and their own interests, for the benefit of the company. 

The part timers showed an amazing degree of pro union sentiment....a great testament to what kind of union men and union women those folks are.. 

Especially in light of the fact that, for most of the 35 years prior to the 97 strike, the IBT had treated them like red headed stepchildren...ignoring their interests and using them as a money tree to prop up the union's finances. 

But, they were big enough to overlook that, and they willingly and enthusiastically walked the line for a union that had done almost nothing for them over the previous 3 1/2 decades. Some of them even fought scab trucks, and risked arrest for the union. 

Also, many of these workers were very loyal to Ron Carey and TDU..after all, in 1994, Carey had delivered on the innocent until proven guilty clause, which made it extremely difficult for UPS workers to get fired. And, he'd also gotten that 70 lbs ergonomic language for them too. 

Despite the years of neglect, most UPS part timers were willing to bet on Carey...and hope that those 20,000 full time jobs would ultimately be first step towards the other 60,000 part timers getting taken care of. 

Ron Carey's IBT had another ace in the hole in 1997...the Wall Street angle. Remember, as I mentioned above, UPS's status as an independent private partnership made it very unpopular with Wall Street, because the moneymen hate companies that they can't control. 

That bad blood with the money center banks only worsened when the company made it's move to take it's welfare and pension contributions away from the now Wall Street controlled Teamster funds. That would cost the financiers money, and lots of it..so it just couldn't happen. 

Plus, a capital-starved UPS might have to give up it's independence, issue an Initial Public Offering (IPO), and submit to control by the capital markets. 

As many GANGBOX subscribers may recall, the late 1990's were a time of an orgy of IPO's...the Wall Street moneymen made a fortune from all those new stock issues. Most of these IPO's were for internet-based companies, many of which had dubious business models, no realistic possibility of ever turning a profit, and ended up being absolutely worthless as investment vehicles (as the public is only fully finding out now, several years later). 

But, UPS had something that most of those "dot.com" IPOs didn't...an actual legitimate investment opportunity...a real business, that provided a real service, and made real profits. 

A UPS IPO would be huge...and would make a lot of money for Wall Street. 

The only problem was..how to make UPS management give up it's independence? 

The UPS Teamster strike provided a perfect opportunity for Wall Street. 

At the same time, the government intervened on behalf of Carey and the Wall Street interests. 

For the first time in US labor history, the US Department of Labor actually got a court order banning UPS from hiring scabs. Big brown only had managers, and a few deluded full timers, crossing the picketline to drive the trucks, and, with that federal order, they had no way to hire additional scabs from off the street to load the trucks and sort the packages. Consequently, United Parcel Service was forced to shut down it's operations almost completely. 

Within 15 days, UPS settled. 

But, this was not 1994...there were more losses than gains. 

The worst defeat..big brown was able to lock the union into a 5 year collective bargaining agreement..that was, at the time, the longest contract ever signed by the IBT. 

And, on the part time issue..they continued that 1962 policy of allowing big brown to use an unlimited number of part timers, with no minimum guaranteed hours or workweek. 

Supposedly, 10,000 high seniority part timers (down by 50% from the 20,000 proposed by the union) would pick up hours from other part timers who'd been fired or gone out on disability. 

But, there were lots of loopholes in that clause of the contract..enabling the company to delay and delay and delay the granting of full time status to those part timers. 

Today, 5 years later, only 2,000 part timers have gotten full time status through those "combined" jobs. 

Hardly the earthshaking victory for America's 40 million part time workers that's been so incorrectly portrayed by many Carey apologists in the media and among the ranks of labor studies professors. 

Especially in light of the fact that UPS ADDED FIFTY THREE THOUSAND (53,000) NEW PART TIMERS DURING THE SAME TIME THAT THEY GAVE THOSE 2,000 LOADERS FULL TIME JOBS. 

Within 2 years, Carey would be gone as IBT general president... There had been a scandal where the IBT laundered union funds through Democratic Party connected groups, and some of that money ended up subsidizing Carey's campaign. Carey later got indicted for that scam..but he was acquitted in 2001. 

The Feds ordered a rerun of the 1997 elections, and barred Carey from running. Carey's substitute on the ballot, one Tom Leedham, principal officer of local 206 in Portland, Oregon and head of the Warehouse Division, was defeated by a man who'd never actually worked as a Teamster in life..but possessed the ultimate Teamster last name. 

The one James P. Hoffa..known to his detractors as "Junior". 

Junior couldn't run for general president in 1991, because of the crudely simple fact that HE'S NOT A TEAMSTER AND NEVER WAS.. 

By 1997, the labor lawyer with that really special last name had snagged himself a dubious secretarial job at a Teamster local in Michigan..and that made him technically eligible to run for office. 

Leedham carried the UPS workers..who were still very loyal to Carey and TDU for what they achieved in 1994. But, Tom did not carry his own division, warehouse..because conditions had been steadily deteriorating there for years..and that decline had not stopped at all during the Carey years. 

Also, in the shrinking but still important freight division, Hoffa won..in large part because Carey's 1994 NMFA allowed the carriers to move more and more trailers by railroad..which cost thousands of jobs. 

Hoffa also carried airline, bakery, dairy, soft drink and brewery, trade show, building materials and construction and tankhaul, in large part due to the continuing decline in Teamster conditions in those industries during the Carey years. 

As for the "non traditional" industries..manufacturing, civil service, health care and the other various and sundry industries that the IBT has branched into.....Hoffa won by default, because so many of those workers didn't even vote..since, in practice, their locals are far out of the Teamster mainstream. 

Of course, unionwide, about 70% of Teamsters voted for 'none of the above' in that election.. Even in 1991, most Teamsters had not voted in that election, and even more abstained in 1997. 

Hardly a ringing endorsement for ANY of the candidates. 

The IBT that Junior Hoffa took over in 1999 was shrinking..down to 1.4 million members, and both the general fund and the Taft Hartley welfare and pension funds were all slowly going broke. 

Hoffa came in with the intent of, for all intents and purposes, abandoning the shrinking traditional Teamster jurisdictions, and reinventing the IBT as a catch all union of civil servants and hospital workers. 

Junior would "resolve" all outstanding disputes with traditional Teamster employers in the trucking, warehousing, brewery and airline industries..that is, he'd sign any piece of garbage contract that they put in front of him, and then make a full court press to ram that contract down the affected workers throats. 

Continue to Chapter 3                                                                                       Return to Chapter 1

Back To Top Of Page


Brown Curtain Chapter 1
Brown Curtain Chapter 2
Brown Curtain Chapter 3
Don't Just Talk The Talk,
Walk The Walk.
Join N.A.B.E.R. Inc.
Join NABER
NABER NOTE
Today RPS is FedEX Ground. This Article was written in 2002.