UPS 2007 Annual Report Download - page 29

•Training. Training is the cornerstone of our Fleet Safety Program. Our approach starts with training the
trainer. All trainers are certified to ensure that they have the skills and motivation to effectively train
novice drivers. A new driver’s employment includes extensive classroom and on-line training as well
as on-road training, followed by three safety training rides integrated into his or her training cycle.
•Responsibility. Our operations managers are responsible for their drivers’ safety records. We
investigate every accident. If we determine that an accident could have been prevented, we retrain the
driver.
•Preventive Maintenance. An integral part of our Fleet Safety Program is a comprehensive Preventive
Maintenance Program. Our fleet is tracked by computer to ensure that each vehicle is serviced before a
breakdown or accident is likely to occur.
•Honor Plan. A well-defined safe driver honor plan recognizes and rewards our drivers when they
achieve success. We have over 4,450 drivers who have driven for 25 years or more without an
avoidable accident.
Our workplace safety program is built upon a comprehensive health and safety process. The foundation of
this process is our employee-management health and safety committees. The workplace safety process focuses
on employee conditioning and safety-related habits. Our employee co-chaired health and safety committees
complete comprehensive facility audits and injury analyses, and recommend facility and work process changes.
Item 3. Legal Proceedings
We are a defendant in a number of lawsuits filed in state and federal courts containing various class-action
allegations under state wage-and-hour laws. In one of these cases, Marlo v. UPS, which has been certified as a
class action in a California federal court, plaintiffs allege that they improperly were denied overtime, and seek
penalties for missed meal and rest periods, and interest and attorneys’ fees. Plaintiffs purport to represent a class of
1,200 full-time supervisors. In August 2005, the court granted summary judgment in favor of UPS on all claims,
and plaintiff appealed the ruling. In October 2007, the appeals court reversed the lower court’s ruling. We have
denied any liability with respect to these claims and intend to vigorously defend ourselves in this case. At this
time, we have not determined the amount of any liability that may result from this matter or whether such liability,
if any, would have a material adverse effect on our financial condition, results of operations, or liquidity.
In another case, Cornn v. UPS, which was certified as a class action in a California federal court, plaintiffs
allege that they were improperly denied wages and/or overtime and meal and rest periods. Plaintiffs purport to
represent a class of approximately 23,600 drivers and seek back wages, penalties, interest and attorneys’ fees.
UPS settled this matter in full for a total payment of $87 million in the second quarter of 2007. The settlement
had no impact on our 2007 operating results as it was accrued for previously during the third quarter of 2006.
In another case, Hohider v. UPS, which in July 2007 was certified as a class action in a Pennsylvania federal
court, plaintiffs have challenged certain aspects of the Company’s interactive process for assessing requests for
reasonable accommodation under the Americans with Disabilities Act. Plaintiffs purport to represent a class of
over 35,000 current and former employees, and seek backpay, compensatory and punitive damages, as well as
attorneys’ fees. In August 2007, the Third Circuit Court of Appeals granted the Company’s Petition to hear the
appeal of the trial court’s recent certification order. The appeal will likely take one year. At this time, we have
not determined the amount of any liability that may result from this matter or whether such liability, if any,
would have a material adverse effect on our financial condition, results of operations, or liquidity.
UPS and Mail Boxes Etc., Inc. are defendants in various lawsuits brought by franchisees who operate Mail
Boxes Etc. centers and The UPS Store locations. These lawsuits relate to the re-branding of Mail Boxes Etc.
centers to The UPS Store, the The UPS Store business model, the representations made in connection with the
rebranding and the sale of The UPS Store franchises, and UPS’s sale of services in the franchisees’ territories.
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