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🗞️ The Raise That Wasn't: How UPS Withheld Pay From Union-Bound Workers and Lost

A federal labor judge ruled UPS illegally withheld planned pay raises from roughly 49 Louisville workers during a 2023 union organizing drive, ordering back pay with interest. The case turns on a narrow legal safe harbor that employers frequently overlook.

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onthelaborfront

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🗞️ The Raise That Wasn't: How UPS Withheld Pay From Union-Bound Workers and Lost

In a decision issued May 8, 2026, Administrative Law Judge Keltner W. Locke of the National Labor Relations Board found that United Parcel Service violated federal labor law when it withheld planned wage increases from approximately 49 workers at its Worldport hub in Louisville, Kentucky, workers who, at the time, were on the verge of voting on whether to join the Teamsters.

The case began in late 2023, when UPS completed a pay review for non-union workers at its Air Region operations called the "Air Region Career Architecture initiative," an analysis designed to benchmark compensation against market rates. Under it, any employee earning below $21 per hour would be raised to that floor and given an additional 3 percent increase; those already above $21 would receive the 3 percent bump. UPS Airlines President Bill Moore informed employees by email on November 22, 2023, that the analysis was complete and that individual discussions with managers would begin December 1.

The timing proved legally treacherous. The Union had submitted two separate recognition demands just days before: a November 17 letter on behalf of ramp, tug, and marshalling dispatchers, and a November 22 letter on behalf of fueling quality control admins, fueling dispatch admins, fueling accounting admins, and fueling ground guides at the Worldport facility. Under the NLRB's 2023 ruling in Cemex Construction Materials Pacific, LLC, UPS was obligated to either recognize the union or promptly file a petition for a secret-ballot election within roughly two weeks of each demand. UPS met both deadlines, filing the first petition on December 1, 2023, and the second on December 6.

Filing those petitions triggered what labor law calls a "critical period," a legally sensitive window leading up to an election during which employers must maintain so-called laboratory conditions. The concept dates to a 1948 NLRB decision and envisions a workplace free of pressure or inducement so employees can make an uncoerced choice. During this window, altering wages or benefits in either direction can constitute an unfair labor practice.

Aware of the legal exposure, UPS decided to exclude the roughly 49 workers in the two new bargaining units from the raises that other employees were receiving. On December 5, 2023, managers read a prepared script to the affected employees stating that under laboratory conditions, UPS was not allowed to change or promise to change wages or benefits for employees covered by the pending petitions, and that making such a change before the election "may be interpreted" by the NLRB as a violation of the law.

The script, however, contained a critical omission. Established NLRB precedent, specifically the decisions in Uarco Inc. (1968) and Ansul Inc. (1999), permits an employer to lawfully delay a planned wage increase during a critical period, but only if management communicates two things clearly to employees: that the delay exists solely to avoid the appearance of improperly influencing the election, and that the raise will be granted after the election regardless of its outcome. UPS's script said neither. Separately, Fueling/Quality Control/Payroll Manager Dave Barbiea told a group of six employees on or around December 1 that they would not receive the raise because it "would be considered a bribe" to keep the union out, a statement the judge found employees would reasonably understand to mean the raise was forfeited entirely, not merely postponed.

Judge Locke found that UPS violated Section 8(a)(1) of the National Labor Relations Act through both the script and Barbiea's statements, and violated Sections 8(a)(1) and 8(a)(3) by actually withholding the raises, the latter provision prohibiting discrimination against employees on the basis of union activity. Rather than apply the Wright Line burden-shifting framework, which the judge found ill-suited to a case with a single clear motive, Judge Locke grounded his analysis in the Supreme Court's decision in NLRB v. Great Dane Trailers, Inc. (1967), which allows an inference of improper intent from the discriminatory conduct itself where an employer cannot adequately justify the disparate treatment.

Notably, the judge found no evidence of hostility toward the union on UPS's part. The company ultimately agreed to a card-check process in which an arbitrator, Ira F. Jaffe, certified on March 27, 2024, that a majority of employees in both units had signed authorization cards. UPS then recognized the union, and the parties signed a collective bargaining agreement on April 10, 2024. Nevertheless, the absence of personal animosity was not a defense: the record showed that UPS treated the 49 workers differently solely because they were about to vote, and without the assurances required to bring that decision within the legal safe harbor.

The remedy requires UPS to make whole all affected employees, with interest compounded daily, for the gap between when other workers received their Career Architecture raises and when the union-covered employees began receiving compensation under the new collective bargaining agreement. UPS must also post a notice at the Worldport facility for 60 consecutive days.

The decision arrives as the legal framework that shaped UPS's initial obligations remains in flux. In March 2026, the U.S. Court of Appeals for the Sixth Circuit, which has jurisdiction over Kentucky, invalidated the bargaining-order standard announced in Cemex as an improper exercise of adjudicatory authority, holding that the NLRB had effectively engaged in policymaking through a case decision rather than through required notice-and-comment rulemaking. The Ninth Circuit, hearing a separate challenge, declined in April 2026 to reach the validity of the Cemex standard, resolving that case on narrower grounds. The Cemex framework thus remains unsettled law, with its ultimate fate likely to depend on further agency action or appellate review.

Key Points

  • UPS withheld planned pay raises from roughly 49 workers at its Louisville Worldport hub after those workers sought union representation through Teamsters Local 89 in late 2023.
  • The raises were part of an Air Region job analysis completed before the union campaign began; employees in other classifications received the increases as planned.
  • Under NLRB precedent, an employer may legally delay a planned raise during a union election's "critical period," but only if it clearly assures employees the raise will follow after the election regardless of the outcome. UPS gave no such assurance.
  • A manager told workers the raises were withheld because granting them "would be considered a bribe" to keep out the union, a statement the judge found unlawful.
  • ALJ Locke found violations of Sections 8(a)(1) and 8(a)(3) of the National Labor Relations Act and ordered back pay with interest compounded daily.
  • UPS ultimately signed a collective bargaining agreement with the Teamsters on April 10, 2024, after an arbitrator certified majority union support through a card-check process. No election was ever held.
  • The Cemex standard that shaped UPS's initial obligations has since been invalidated within the Sixth Circuit by Brown-Forman Corp. v. NLRB (March 2026), though its broader legal fate remains unresolved pending further agency or appellate action.

Primary Source Author: Administrative Law Judge Keltner W. Locke, National Labor Relations Board

Primary Source: United Parcel Service, Inc., Case 09-CA-342136, JD-31-26 (NLRB Div. of Judges, May 8, 2026)

Primary Source Link: NLRB Case 09-CA-342136

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