The Teamsters’ buyout lawsuit against UPS ended in an April 2026 settlement that capped the company’s Driver Choice Program at 7,500 buyouts nationwide, set the payment at $150,000 per driver, required offers to move by seniority, gave eligible Teamsters members a right of first refusal, and barred UPS from launching any further severance program before the National Master Agreement expires on July 31, 2028. The union got there the hard way. A federal judge refused to halt the buyout in February, and it was the grievance process, not the courtroom, that forced UPS back to the table.
What UPS Was Offering and Why the Union Sued
In early 2026, UPS opened the Driver Choice Program to all full-time drivers. The deal was $150,000 in cash for permanent separation. To take it, a driver had to promise never to work for UPS again, waive union representation, give up employer-paid health care and guaranteed retirement benefits, and sign an irrevocable letter of separation that closed off future grievances and arbitration.
The International Brotherhood of Teamsters filed suit on February 9, 2026 in the U.S. District Court for the District of Massachusetts, International Brotherhood of Teamsters et al v. United Parcel Service, Inc., Case No. 26-cv-10666-DJC. The complaint alleged at least six violations of the 2023 National Master Agreement, including direct dealing with individual workers on new contract terms, eliminating union jobs UPS had promised to create, and undercutting shop stewards. The union also said UPS had ignored more than 57 information requests about the program since late January.
The contract argument had teeth. The 2023 agreement obligated UPS to create 7,500 new full-time jobs and fill 22,500 open positions over five years. Paying drivers to leave, the union argued, ran directly against those commitments. The Teamsters called the Driver Choice Program a “second illegal buyout scam,” pointing to a similar 2025 program, the Driver Voluntary Separation Program, that was already headed to binding arbitration.
Why the Court Refused to Stop the Buyout
On February 20, 2026, Chief District Judge Denise J. Casper denied the union’s request for a temporary restraining order and preliminary injunction. The decision turned on arbitration, not on the merits of whether UPS had broken the contract.
Judge Casper pointed to Article 6, Section 1 of the National Master Agreement, which makes any individual contract that conflicts with the collective bargaining agreement “null and void.” If an arbitrator later found the Driver Choice Program violated the contract, that arbitrator could invalidate the releases drivers had signed and order them reinstated. Because that remedy existed, the court held, the union had not shown irreparable harm.
The judge also weighed the alternative. Blocking a voluntary program could push UPS toward involuntary layoffs, which the company had the contractual authority to carry out. She wrote that the union had failed to meet “the high legal threshold to circumvent arbitration” and that the public interest favored letting the dispute run through the grievance process.
How the Central Region Withdrawal Changed the Fight
The court loss redirected the union rather than ending it. Nearly 37 local unions filed grievances challenging the Driver Choice Program under the National Master Agreement and its regional supplements. The Central Region Supplement was the strongest weapon. It restricts UPS from offering incentive programs directly to employees without a union vote and approval.
On March 24, 2026, UPS notified the Teamsters that it was withdrawing the Driver Choice Program across 13 Central Region states from Nebraska to Ohio, covering more than 68,000 rank-and-file members. General President Sean M. O’Brien called the withdrawal an admission that the buyouts were illegal and described them as “scams designed to fuel corporate greed.” General Secretary-Treasurer Fred Zuckerman called the move “an admission of guilt, plain and simple.” The union then pressed for a national resolution.
The response inside the ranks was not uniform. Some Ohio drivers said the union’s opposition was really about preserving dues income, and Youngstown members reportedly threatened to replace local leadership. Drivers who had wanted the $150,000 but were nowhere near retirement age were left exposed. An anonymous source told a local television station that employees who had already applied and identified themselves as wanting out now feared being singled out in the involuntary layoffs UPS was expected to run.
What the April 2026 Settlement Gives Drivers
On April 5, 2026, the Teamsters National Negotiating Committee and UPS reached a settlement of the grievances over the Driver Choice Program. The terms:
- Payment stays at $150,000 for early retirement.
- Total buyouts are capped at 7,500 drivers across all job classifications nationwide.
- Eligibility is limited to long-haul feeder drivers and Regular Package Car Drivers, with offers distributed by seniority across all regions.
- Eligible Teamsters members have the right of first refusal on any severance agreement.
- UPS agreed not to pursue or offer any other severance program for the remainder of the National Master Agreement, which expires July 31, 2028.
- UPS formally withdrew the unilateral Driver Choice Program it launched in February without union consent.
O’Brien framed the deal as enforcement of the existing contract, saying UPS never had the right to offer buyouts on its own. UPS reported “strong interest across the country” but did not disclose how many of the 7,500 slots had been filled. Approvals are running on seniority and operational staffing needs.
Where This Leaves UPS Drivers
If you are a full-time UPS driver considering the buyout, the settlement decides several things for you. The $150,000 figure is fixed. Access to it runs by seniority, so a driver’s place in line depends on years of service and job classification, not on how quickly they apply. Long-haul feeder drivers and Regular Package Car Drivers are the two eligible groups. Members holding a right of first refusal get first crack at any severance slot before it can go elsewhere. And because UPS has agreed not to launch any further severance program before July 31, 2028, this is the only buyout window before the next contract.
The waivers built into the original Driver Choice Program, including the ban on future grievances and the surrender of union representation, were tied to the program UPS withdrew. Any severance now offered flows through the settlement’s terms rather than the unilateral release UPS drafted in February. Drivers weighing an application should read the current offer documents carefully against those terms before signing.