UPS and Teamsters union reach agreement, avert strike

UPS and the International Brotherhood of Teamsters, a union representing about 330,000 UPS employees in the U.S., have reached a tentative collective bargaining agreement.

Contract negotiations between UPS and the Teamsters restarted on Tuesday after breaking down earlier this month. The two sides faced a July 31 deadline, at which point the Teamsters had vowed to strike before employees' contract was set to expire on Aug. 1.

Instead, UPS and the Teamsters struck a five-year tentative agreement that raises wages for all workers, creates additional full-time jobs and imposes dozens of workplace protections and improvements, the Teamsters said in a statement on Tuesday.

“Rank-and-file UPS Teamsters sacrificed everything to get this country through a pandemic and enabled UPS to reap record-setting profits," Teamsters General President Sean O’Brien said in a statement on Tuesday.

"We demanded the best contract in the history of UPS, and we got it,” he added.

Similarly, UPS celebrated the agreement as an achievement for the workers as well as for the company and its customers.

“Together we reached a win-win-win agreement on the issues that are important to Teamsters leadership, our employees and to UPS and our customers,” Carol Tomé, UPS CEO, said in a statement.

“This agreement continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong,” she added.

If UPS workers had gone on strike, it would’ve provided a major economic and political headache for President Joe Biden, who has taken credit for the recent economic upturn. A strike would’ve threatened his economic progress.

"The President spoke via phone with UPS President Carol Tomé and Teamsters President Sean O’Brien on Tuesday. He warmly congratulated both on reaching an agreement and thanked them for their hard work," the White House said in a statement. "During the call, the President pointed to their agreement as evidence that collective bargaining works and offered his best wishes for a smooth ratification.”

Among other issues, the deal addresses two key points of concern among workers: pay raises and safety protections, the union said.

Under the terms of the deal, existing full- and part-time UPS Teamsters will get $2.75 more per hour in 2023, and $7.50 more per hour over the length of the contract, the union said. Meanwhile, existing part-timers will see their pay raised immediately up to no less than $21 per hour.

Wage increases for full-time workers will keep UPS Teamsters as the highest-paid delivery drivers in the nation, improving their average top rate to $49 per hour, the union added.

In addition, the deal codifies a previous commitment made by UPS to equip in-cab A/C in all larger delivery vehicles, sprinter vans, and package cars purchased after the outset of 2024, the union said.

The tentative agreement would also grant all Teamsters-represented UPS workers with a day off on Martin Luther King Jr. Day -- a key demand that the union had raised in contract negotiations.

The agreement is subject to voting and ratification by Teamsters members.

This is a developing story. Please check back for updates.

ABC News' Benjamin Gittleson and Teddy Grant contributed to this report.