UPS Driver Buyouts Teamsters Lawsuit, What Drivers Need to Know

Quick Facts

• Lawsuit type: Labor dispute / injunction request (not a consumer class action; no settlement fund for drivers)
• Filed by: International Brotherhood of Teamsters
• Defendant: United Parcel Service, Inc. (UPS)
• Court: U.S. District Court, District of Massachusetts
• Case status: Injunction denied February 20, 2026 — dispute continues in binding arbitration
• Program at issue: UPS Driver Choice Program (DCP) — voluntary $150,000 separation payment
• Who is eligible for buyout: Full-time UPS drivers (approximately 105,000 nationwide)
• Enrollment window (original): February 13 – March 12, 2026 (exact revised dates pending UPS communication)
• Separations start: Around April 26, 2026
• Official UPS resource: ups.com
• Official Teamsters resource: teamster.org

The International Brotherhood of Teamsters sued UPS in February 2026, arguing that UPS’s voluntary driver buyout program — the Driver Choice Program — allegedly violates the union’s national master labor contract. A federal judge denied the union’s request to stop the program, allowing UPS to move forward with $150,000 separation offers to eligible full-time drivers. The underlying contract dispute continues through the union’s grievance and arbitration process. This is a labor dispute, not a consumer class action settlement. There is no settlement fund and no claim form for drivers to file.

What Is the Lawsuit About?

The Teamsters union filed an emergency motion for a temporary restraining order against UPS in the U.S. District Court in Massachusetts, alleging the pending buyouts violate the national contract. The union argued that UPS cannot offer a company-wide voluntary separation program without first negotiating its terms with the union, as required by the National Master Agreement — the binding five-year contract ratified by Teamsters members in September 2023.

In court filings, the Teamsters detailed at least six violations of its National Master Agreement by UPS in the rollout of the buyout program, including direct dealing of new contracts with workers, elimination of union jobs when UPS contractually agreed to establish more positions, and erosion of the rights and privileges of union shop stewards, among other charges.

This lawsuit is the second time in six months the union challenged a UPS buyout program. The scope of UPS’s updated buyout program is much broader than the payoff presented to workers late last summer, when UPS marketed payouts to more tenured drivers nearing retirement. The new program targets all eligible full-time drivers regardless of seniority or length of service.

Who Is Affected?

UPS plans to extend its Driver Choice Program to 105,000 drivers regardless of seniority, offering a $150,000 lump sum payment plus previously earned benefits in exchange for resigning. Only full-time drivers are eligible. Part-time employees, warehouse workers, and other Teamsters-represented UPS employees are not part of this program.

The Teamsters represent 80% of UPS’s roughly 370,000 U.S. employees. The Driver Choice Program covers only the driver subset of that workforce — not all Teamsters members at UPS.

If you are a full-time UPS package car driver in the United States, you are among the approximately 105,000 employees to whom UPS will offer the buyout. Whether you choose to accept, decline, or wait is entirely voluntary — the program is not a layoff notice. However, the decision carries significant long-term consequences that every eligible driver should understand before making a choice.

What Are the Terms of the Driver Choice Program?

Under the program, full-time U.S. drivers have the choice to voluntarily leave UPS with a $150,000 separation payment, in addition to any retirement benefits earned, including pension and healthcare.

Before accepting, every driver should understand what they give up:

You permanently agree never to work for UPS again. Drivers who accept the offer must commit to never work for UPS again and to waive their rights to union representation in the event grievances arise over execution of the agreement. This is a permanent condition.

You waive your right to union representation for any disputes about how the buyout agreement is executed.

This is voluntary. UPS’s stated position is that the program gives drivers a choice. The judge agreed that because the program is voluntary and no driver is forced to resign, it differs from a situation where a court should intervene. However, UPS has also signaled that drivers who do not accept voluntarily may face involuntary layoffs through other workforce reduction methods.

Comparison to the 2025 buyout: The new program is much more lucrative than the first buyout program last fall, which provided $1,800 in severance pay per year of service, with a $10,000 minimum, to eligible drivers. Only 3,000 drivers accepted the offer. The 2026 offer of $150,000 is a flat lump sum regardless of years of service — meaning a driver with two years of service and a driver with 25 years of service receive the same amount.

Legal Claims the Teamsters Filed

The Teamsters filed six specific alleged contract violations. Here is what they mean in plain terms:

Direct dealing with workers: The union argued that UPS contacted drivers individually about leaving, bypassing the union’s role as the exclusive bargaining representative. Under labor law, employers must negotiate changes to terms of employment — including separation packages — with the union, not directly with individual workers.

Elimination of jobs UPS promised to create: The Teamsters argue the Driver Choice Program violates the union contract because it wasn’t negotiated and anything that changes the terms of employment, such as compensation and separation, must be bargained with the union. The union also says UPS is reneging on its commitment under the contract to create 30,000 jobs, a quarter of which are supposed to come from moving part-time workers to full-time status.

Waiver of union representation rights: The union argued that asking drivers to permanently waive their right to union representation as a condition of accepting a buyout undermines the union’s legal standing and the rights of members.

Erosion of shop steward rights: The lawsuit alleged that the program’s structure undermines the authority of local union stewards, who serve as frontline representatives for members in disputes with management.

Timing and procedural violations: The Teamsters argued that UPS failed to provide required advance notice and information about the program in violation of the contract’s information-sharing requirements. Since late January, the Teamsters issued more than 57 requests for information and documents to UPS related to its plans for a revised driver buyout.

Related article: DiDi Global $740M Class Action Settlement, Status, Eligibility & Payout

Lawsuit Status: What the Court Decided and What Comes Next

Chief district judge Denise James said in a 12-page order that the labor dispute favors arbitration rather than an injunction of the voluntary separation program, and did not meet the legal standard required for the court to stop the plan from being implemented.

The judge’s ruling was not a finding that UPS was right or that the Teamsters were wrong. The court ruled narrowly: the union did not meet the very high legal bar required for a labor injunction, and the existing contract already provides a process — arbitration — to resolve this type of dispute.

The court asserted throughout the order that an arbitrator would have the authority to reverse certain decisions that UPS claims would have brought “irreparable harm,” such as reinstating employees and awarding back pay. In other words, the court left open the possibility that an arbitrator could later find UPS violated the contract and order remedies for drivers who accepted the buyout.

What happens in arbitration: Multiple Teamsters local unions have filed grievances against UPS over the contract violations inherent in its prior DVSP program. Those grievances are expected to enter binding arbitration following a National Grievance Committee hearing. The new Driver Choice Program disputes will follow the same path. In binding arbitration, a neutral third party reviews both sides’ arguments under the contract and issues a decision both parties must follow. Arbitration is not a public court proceeding, and its timeline is not fixed.

The Teamsters union’s effort to halt UPS’ second round of driver buyout offers was rejected by a federal judge, but the fight will continue in arbitration.

Why Is UPS Offering These Buyouts?

UPS disclosed it plans to whittle down the driver workforce through attrition. UPS’s average daily package volume in the U.S. declined year-over-year by 1.6 million pieces or 8.6% in 2025. The company reduced its deliveries for Amazon — its largest single customer — and began shifting certain shipments to the U.S. Postal Service. UPS is also investing in automation that reduces the number of workers needed to sort and route packages.

In total, the company expects to reduce positions across the company by 30,000 in 2026, on top of 48,000 employees that were cut last year. UPS has stated that offering voluntary buyouts reduces the number of drivers it would need to lay off involuntarily, and the judge cited this argument as a factor in her ruling.

What This Means for Drivers

If you are a full-time UPS driver, the decision to accept or decline the Driver Choice Program is significant and permanent. A few key points for eligible drivers to understand:

The program is currently proceeding. The court cleared UPS to move forward. UPS stated it intends to proceed with the program as originally planned, though the exact revised enrollment window dates will be communicated directly to drivers.

Accepting is final. If you accept the $150,000 and resign, you permanently give up your right to work for UPS and to union representation for disputes about the agreement. The arbitration process could later result in a finding that UPS violated the contract — but whether that would provide any remedy to drivers who already accepted and resigned is not certain.

Declining does not mean you are automatically laid off. The program is voluntary. However, UPS’s president of global labor relations said in a letter to Teamsters leadership that the number of layoffs for remaining drivers could be reduced by offering the program, suggesting involuntary layoffs for drivers could follow this year if not enough drivers accept voluntarily.

Talk to your union steward. Your local Teamsters representative can provide information specific to your local, your seniority, your pension plan, and the grievances already filed. The national union’s position is that the program violates the contract and drivers should not accept it without understanding the full consequences.

Key Dates

Frequently Asked Questions

What is this lawsuit about? 

The Teamsters union sued UPS in February 2026 to block UPS’s Driver Choice Program, a voluntary buyout offering full-time drivers $150,000 to resign. The union alleged the program violates the national labor contract by bypassing union negotiation, eliminating promised jobs, and asking drivers to permanently waive union rights as a condition of accepting.

Who is affected? 

The Driver Choice Program would make about 105,000 drivers eligible for a $150,000 lump-sum payment in addition to any earned retirement benefits. Only full-time UPS package car drivers are eligible. Part-time employees and other Teamsters-represented UPS workers are not covered by this specific program.

Has a settlement been approved? 

No. This is not a class action and there is no settlement. The court denied the union’s request to stop the program. The underlying contract dispute now moves to the union’s grievance and arbitration process. No arbitration decision has been issued. This situation will continue to develop.

Am I eligible for the buyout? 

If you are a full-time UPS package car driver in the United States, you are among the approximately 105,000 eligible employees. UPS will communicate directly with eligible drivers about the specific enrollment process and any updated timeline following the temporary pause caused by the lawsuit.

Is a claim form required? 

No claim form exists — this is not a settlement. If you want to participate in the Driver Choice Program, you will accept through UPS’s internal enrollment process. If you want to decline, you take no action. For arbitration-related grievances, your local union handles those on your behalf.

What is the enrollment deadline? 

The company has not stated whether the enrollment window has shifted due to temporary pausing of the program. Initially, UPS said the drivers could apply to take a voluntary buyout from Feb. 13 to March 12, with separations beginning April 26. UPS stated it would share updated details with drivers directly following the court ruling. Contact UPS HR or your Teamsters local for the most current enrollment window.

What happens next?

 UPS is proceeding with the Driver Choice Program and communicating offer details to eligible drivers. The Teamsters are pursuing their contract violation claims through the National Grievance Committee and binding arbitration. An arbitrator’s decision could affect drivers who accepted the offer, drivers who did not, and UPS’s ability to run similar programs in the future. The arbitration timeline is not publicly set.

Should I accept or decline the buyout? 

This article cannot advise you on whether to accept or decline. That decision depends on your personal financial situation, years of service, pension benefits, healthcare coverage, and career plans. Consult your local Teamsters union representative and, if needed, an employment attorney before making a permanent decision. The Teamsters’ national position is that the program violates the contract — your local can explain what that means for your specific circumstances.

Resources for Affected Drivers

• International Brotherhood of Teamsters: teamster.org — national union position statements, grievance filing guidance, and local union directory
• UPS employee resources: Contact UPS HR directly or visit ups.com for program-specific information
• Court records: U.S. District Court for the District of Massachusetts — search International Brotherhood of Teamsters v. United Parcel Service

Last Updated: February 28, 2026

This article is for informational purposes only and does not constitute legal advice. Settlement eligibility and litigation outcomes depend on specific facts and applicable law. For questions regarding this lawsuit or settlement, consult official settlement resources or a qualified attorney. Information in this article is current as of the last update date and may change as the case proceeds or settlement is administered.

About the Author

Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
Her writing blends real legal insight with plain-English explanations, helping readers stay informed and legally aware.
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