Anchored In Greater Atlanta, UPS Is Dedicated To Its Employees And The Communities It Serves

Monday, March 24, 2014 - 12:06

The Editor interviews Teri McClure, Chief Legal, Communications and Compliance Officer, United Parcel Service of America.

Editor: You’ve been with UPS since 1995. Please tell us about your tenure there.

McClure: I started as employment counsel for UPS – actually the only employment counsel for about 200,000 employees, which was somewhat overwhelming. Eventually I went on to lead the labor employment group, which I grew after recognizing the need to have more support in that area. I then took on administration and technology support for the legal department, particularly the early generations of our electronic billing and data management systems.

In 2003, I was made president of the company’s central Florida district, where we had about 4,000 employees. I was responsible for all of the pickup and delivery operations between Tampa and Melbourne, more or less. UPS believes, and I agree, that it’s important to have a connection with the operations and an understanding of the business at the ground level. UPS is very much a promote-from-within company, and my joining the company at the mid- to upper-management level was very unusual by UPS standards, so this was an opportunity to gain that experience.

I also had a special assignment in the UPS supply chain logistics group to develop a better understanding of our supply chain and distribution business. I later served as UPS compliance manager, and then ultimately moved back to legal. I was promoted to general counsel and corporate secretary in 2006. I now also serve as chief compliance and communications officer. There is a lot of synergy between these roles: everything we do in legal and compliance is in support of the UPS brand, and the communications function supports our marketing and sales team in advancing that brand.

Editor: UPS moved its headquarters from Connecticut to suburban Atlanta in 1994. Why was that move made?

McClure: Relocating people to Connecticut was becoming more and more challenging due to the rising cost of housing and living overall. In addition, from a logistical standpoint, UPS was at the point where it needed to have a world-class airport nearby. With its capable workforce, excellent quality of life and vibrant community – as well as its international airport – Greater Atlanta was the ideal solution. We are very happy here in Sandy Springs and proudly consider ourselves an Atlanta-based company.

Editor: What are some of the employment concerns for a company with people on the ground in literally every state?

McClure: First, UPS workers have very physical jobs. Like many companies, we have our share of ADA claims and accommodation issues. We’re also the largest employer of Teamsters, so we have union-related issues, such as collective bargaining challenges, arbitrations and grievances. We maintain a healthy relationship with our Teamsters and are proud to employ them. The largest portion of my outside counsel spend is spent on labor and employment issues.

In terms of key issues, we’re seeing more retaliation claims, religious discrimination claims and, again, ADA, which tends to be more prevalent because these are focus areas for the EEOC. As a large company with over 400,000 employees, we see a little bit of everything.

Editor: What drove UPS’s recent decision to invest in propane-powered trucks?

McClure: We have a very substantial investment in alternative fuel vehicles.  Since propane is a cleaner burning fuel that lowers operating costs and is readily accessible, it is a perfect addition to UPS’s ongoing alternative fuel and advanced technology vehicles initiative that will diversify the base of UPS fuel sources. We currently have more than 3,150 alternative fuel and advanced technology vehicles on the road worldwide. We take a “rolling laboratory” approach, constantly testing different fuel sources and technologies to find the most economically and environmentally friendly energy sources to suit UPS’s broad range of route characteristics. We test all kinds of prototypes, including electric hybrids, all electric, hydraulic hybrids, propane, compressed natural gas, liquefied natural gas and biomethane. We experiment with all of these, and we’re always looking for opportunities to work with local governments to test the utilization of these vehicles on a commercial basis.

The opportunity to test the propane-powered package delivery trucks came about through a collaboration opportunity with the Propane Education & Research Council. These kinds of partnerships are generally supported by private/public investments to ensure the necessary infrastructure is in place. We do try to support the application of alternative fuel technology in any way we can.

Editor: I’ve read that the UPS legal department is known for being very lean, with less than half the staff of comparably sized companies. Must you rely more heavily on outside counsel?

McClure: We do have a very small inside legal department as compared to the outside legal department – about 80 percent of my budget is spent on outside legal fees. This is largely a result of the way we grew as an organization. We were originally a regulated industry, and as we expanded state to state, we’d promptly hire local real estate counsel, as well as labor counsel and regulatory counsel, to help us acquire operating authority. In this manner, we developed a very large network of law firms representing us across the country.

The in-house legal department remained very small well into the ’90s. I’m only the third general counsel, and the two before me started out in the company, worked their way up, went to night law school, took on positions in the legal department and ultimately made general counsel. I’m the first to have experience outside the company. The in-house legal department was historically viewed as facilitating business needs, and so worked with the business teams to accomplish their goals. We’d hire outside counsel to help us with litigation and disputes, acquisitions and more complex legal matters.

The model changed somewhat when we went through convergence in the early ’90s, but we continue to rely very heavily on outside counsel. We have regional attorneys who represent us in our primary, largest-spend areas. We then have a core group of specialty counsel representing us on intellectual property, corporate governance and securities issues.

Although my in-house counsel team reports directly to me, they are very much integrated with the business teams. They’re seen as business partners whose goal is to help tear down legal barriers for our business or to advance business initiatives and are involved in a lot of policy and procedure development, operational issues and the more traditional day-to-day legal issues. They oversee directly our outside counsel and support those efforts.

We have a large volume of employment matters in every state, along with a good deal of real estate and package claim litigation; we could probably do it all in-house if we wanted to hire two or three hundred attorneys, but because of our history, it makes sense to continue on the path we’re on. I’ve always told the team that if they can show that we can reduce costs by bringing work in-house, we will. In many instances we have, and it’s certainly grown the legal department in the last few years. But for the most part, we’re able to get very good lawyers to do the work, and we have very competitive pricing arrangements with our outside counsel because of the volume of work we provide. We have a very efficient model for the type and scope of legal matters that we face. We do have to get significant counsel involved if we have a major bet-the-company issue, but that’s not the vast majority of the legal work that we have.

Editor: Your department was also described as embracing “old-fashioned values.” What are those values, and how are they manifested in the culture of your legal department? I know UPS is very community aware.

McClure: I think it is a very strong culture, and we are very intentional in instilling it. A lot of the culture references back to our founder, Jim Casey. Employee engagement is highly important for the organization, and we use the culture as a way to maintain that employee engagement. If that’s the reference to “old-fashioned,” I think that’s probably very true. One of the things I’ve been very committed to is that our legal department remain very lean and very flat as well. It’s a pretty young group. Because the team doesn’t always have opportunities for promotion within the legal department, we do try to create an environment where they are challenged by the work they’re performing and are given the opportunity to interact with the senior management team on very significant issues that, given the scope and scale of our company, they wouldn’t find elsewhere. They’re encouraged to get involved with their communities and to participate in pro bono opportunities. I like to think that they’re having a well-rounded experience. We spend a lot of time ensuring that their employment here is worthwhile and that they’re benefiting from the experience. As a result, we have very little turnover in the legal department.

We have always been very committed to supporting the communities where we operate. In the legal department, community engagement and volunteering offer invaluable opportunities for people to stretch themselves and to continue to pursue their personal interests. I strongly encourage this, and it’s really greatly benefitted our people.

Editor: Does the UPS legal department have a formal mentoring program?

McClure: Some of the diversity programs offer formal mentoring initiatives. Within the legal department, we do a great deal of informal mentoring. I spend a lot of time with the team, and my team spends a lot of time with the attorneys. We also encourage cross-functional mentoring outside of the legal department. I could not have gotten where I have in the organization without very strong mentors on the business side of the organization. I believe mentoring is invaluable. We look for opportunities to develop people and to provide mentoring opportunities for them. It’s a strong component of what we do as an organization.

Editor:  Please share with us your experience with your pro bono legal organizations that are important to UPS.

McClure: The legal department has become extremely involved in pro bono efforts. I was very much involved in the Leadership Counsel for Legal Diversity, and as a result we have several diversity initiatives within the legal department, including the Street Law Program. We hosted Street Law Programs for the last few years, along with some local Georgia programs in support of minority students, such as the Justice Benham Law Camp program, the Georgia ACC chapter’s 1L minority program and the Atlanta Bar Association.

In addition, we do quite a bit of pro bono work for the Pro Bono Partnership of Atlanta, Truancy Intervention Project, Georgia Justice Project and Atlanta Volunteer Lawyers Foundation. As for Atlanta Legal Aid, I think the world of that organization and its leadership. Ours was the first corporate legal department to have a fellow, and we recently had our third. In fact, in each of the last three years, we’ve had one of our attorneys work at Atlanta Legal Aid for four months. Because at least a third of our attorneys came up through the UPS pipeline, we see working at Atlanta Legal Aid as an opportunity for those folks not only to provide services to a wonderful organization but also to experience what it really means to support a client – to be responsive to court deadlines and so on. It benefits both sides. We’ve even made the opportunity available for more established UPS attorneys who would like to spend time on a pro bono project. UPS has a community internship for other managers within the organization, and so I consider this the legal department’s version.

Editor: Do you partner with outside counsel on any of these projects?

McClure: We partner with a number of our firms on the Street Law Project, Truancy Intervention and the Pro Bono Partnership. We’ve worked with firms on guardianship issues. Through the Pro Bono Partnership of Atlanta and the Atlanta Volunteer Lawyers Foundation, we often will partner with law firms to support some of those efforts. Alston & Byrd, King & Spalding, Morrison Foerster and others have been very supportive of some of these projects.

Editor: Please tell us about The UPS Foundation.

McClure: I serve as a trustee on The UPS Foundation. We set aside about $100 million each year to invest in communities around the world focusing on four areas. The first of these is community safety, which is largely about driver safety. We’ve found that in many of the countries where we operate, including the United States, driving accidents are one of the most common causes of death. We’ve been partnering with a number of organizations worldwide to institute driver training programs with the Boys & Girls Clubs and other international youth organizations to improve driver safety and training. Also under the umbrella of community safety is our support of humanitarian relief, disaster recovery and disaster preparedness; we support workplace safety as well. The second area is volunteerism. The company has always been a champion of volunteerism, and so we assist other organizations that support volunteerism and encourage other organizations to create tools that allow for greater volunteerism. The third and fourth areas where The Foundation provides funding are the environment and diversity.

Editor: Do you have anything to add?

McClure: The only thing I would say is that I’m truly blessed to have an outstanding team to work with in the legal department. We have some extraordinary lawyers who are experienced, know the business and practice very sophisticated law, and they are constantly looking for ways to add value to our organization. Having a great team makes it easy for us to work with our partners, and they do an excellent job.