A U.S. district court in Boston, presided over by Judge Denise Casper, rejected a motion filed by the International Brotherhood of Teamsters on February 21, 2026, that sought to block United Parcel Service’s driver buy‑out program. The court’s ruling removes a major legal obstacle that could have delayed or halted UPS’s plan to offer eligible package‑car drivers a lump‑sum payment of $150,000 in exchange for waiving legal claims and forgoing reemployment with the company.
The buy‑out program is a cornerstone of UPS’s broader restructuring strategy, which aims to reduce excess capacity and lower labor costs as the carrier reconfigures its network. By encouraging voluntary exits, UPS can trim its workforce, cut payroll expenses, and free up resources to invest in automation and higher‑margin services such as healthcare logistics.
UPS’s financial performance in 2025 underscored the urgency of the restructuring. The company guided for 2025 revenue of approximately $89.0 billion and an operating margin of about 10.8 percent, and it reported full‑year 2025 revenue of $88.7 billion with an operating margin of 9.8 percent. As of February 2026, the trailing‑twelve‑month operating margin had slipped to 7.73 percent from 9.12 percent at the end of 2024, highlighting the pressure on profitability that the buy‑out program is designed to alleviate.
CEO Carol B. Tomé has emphasized that the restructuring is a multi‑year effort to fundamentally change UPS’s organization, processes, technologies, and business mix. She noted that the company has already executed on its driver voluntary severance program, with about 90 percent of eligible drivers exiting by August 31, 2025, and that the savings from those exits will begin to materialize in the fourth quarter. Tomé also said that, following the completion of the Amazon glide‑down, 2026 will be an inflection point for delivering growth and sustained margin expansion.
Investors reacted positively to the court’s decision, reflecting confidence in UPS’s cost‑control measures and its ability to execute the restructuring plan. The ruling removes a significant legal hurdle, allowing the company to move forward with the buy‑out program and other network‑reconfiguration initiatives that are expected to improve operating margins over the long term.
With the legal barrier removed, UPS can accelerate its automation investments and focus on higher‑margin segments, positioning itself to compete more effectively against rivals such as FedEx, DHL, and Amazon Logistics. The buy‑out program, coupled with the company’s shift away from low‑margin Amazon business and its push into healthcare logistics, is expected to generate substantial cost savings and support the carrier’s goal of achieving a higher operating margin in the coming years.
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