UPS clears major legal hurdle amid job cuts

On Friday, Feb. 20, a federal judge in the District Court in Massachusetts gave UPS the green light to implement its Driver Choice Program, much to the delivery company's relief. UPS secured a key legal victory in its effort to reshape its workforce. The judge cleared the way for the company to move forward with its $150,000 separation payment, offered to eligible drivers on top of any earned retirement benefits, including pension and health care.As part of the buyout, UPS drivers can voluntarily leave the company in exchange for a lump-sum payment, provided they waive their right to union representation. The company, in an emailed statement shared with TheStreet, said it will share details with drivers in the coming days. Teamsters, the union representing UPS drivers, expects more than 10,000 drivers to take the buyout, Reuters reported. The UPS spokesperson did not confirm the number.“We do not know how many drivers are interested in taking the offer — any estimate would be speculation at this point,” the spokesperson said. UPS stock is up 16% year to date.Shutterstock UPS’ turning point after legal pushbackThe decision marks a significant shift from the legal roadblock UPS encountered earlier this month. In January, the company revealed 30,000 planned job reductions during its Q4 2025 earnings call, as part of a strategy to cut Amazon volume.In a move to trim its workforce for the second time (the company announced 48,000 job eliminations in October 2025), UPS launched a Driver Choice Program, under which it would offer drivers a voluntary exit in exchange for a predetermined severance package.More Employment:Layoffs surge just weeks into the new yearUPS’ plan to cut 30,000 jobs hits legal roadblock amid Amazon pivotAmazon delivers Seattle purge ahead of earningsLowe’s begins layoffs in North Carolina, plans 600 job cutsHowever, the International Brotherhood of Teamsters, one of the largest unions for truck drivers across the country, sued UPS on February 9, calling it an illegal buyout scheme and demanding a halt to the company's plan to implement cuts for unionized drivers.You can read more about the court case I covered earlier here.Teamsters argued that the job reductions violate the 2023 contract, which obligates UPS to increase employment.But on Friday, Feb. 20, Chief U.S.

District Judge Denise Casper dismissed the union’s request, saying its claims were unfounded. The dispute will be resolved by an arbitrator, who will have the power to reinstate any employee whose separation is deemed improper.The judge also noted that this program harms drivers less, as it gives them an option, compared with workforce reduction that may occur through involuntary layoffs.The decision comes at a crucial time for the 118-year-old shipping giant, as it tries to balance soft package demand, cost pressures, and automation investments. In December 2025, UPS reportedly invested $120 million in 400 Pickle Robots to unload trucks, as part of its $9 billion plan to automate its operations and increase profits by reducing labor costs, Bloomberg reported.Related: Walgreens widens job cuts amid store closures