Big grocers take aim at the UFCW

August 31, 2010

Darrin Hoop, a member of UFCW Local 21 in Seattle, asks whether his union is prepared to draw the line against concession demands from the big grocery chains.

THE UNITED Food and Commercial Workers Union (UFCW) is in the midst of an 18-month period in which it is negotiating contracts for more than 400,000 of its 1.3 million members.

Will the union move forward or backward? So far, there are several grocery contracts that have been settled throughout the country. Most recently, on July 8, over 16,000 members of UFCW Local 1500 in the New York City area settled with Stop & Shop, Pathmark and King Kullen.

Prior to that, the 5,800 members of UFCW Local 23 ratified a contract that covered 36 Giant Eagle stores in Western Pennsylvania and Northern West Virginia. Members of the Madison Heights, Mich.-based UCFW Local 876 unanimously ratified a three-year contract for about 12,000 workers at 118 Kroger stores in Michigan.

Unfortunately, both the UFCW local union and International Web sites--and, not surprisingly, the mainstream media--have very few details of these settlements. Due to the history of concessionary contracts negotiated by the UFCW, the silence is troubling.

Members of UFCW Local 1500 in New York City announce the settlement of their new contract in July
Members of UFCW Local 1500 in New York City announce the settlement of their new contract in July

But there's another major struggle taking place in the grocery industry that will help determine the union's direction: Some 25,000 grocery workers around Washington state have been locked in tense negotiations for over four months.

On the bosses' side, three of the richest grocery corporations in the U.S.--Kroger, Albertson's (owned by Supervalu), and Safeway--have united for negotiations as Allied Employers, Inc. For the workers, 19,000 are represented by UFCW Local 21, while the other 6,000 are represented by UFCW Local 81 and Teamsters Local 38. The workers are spread out over 218 stores in nine counties throughout Western Washington.

The contract originally was set to expire May 1, but has now been extended three times and is set to expire at the end of August.

THERE ARE a number of areas where management is gunning for concessions.

For the first two months of negotiations, the employers demanded a three-year contract with no raises at all. Now management has changed its offer to convert three meager bonuses into a $1 an hour wage increase in the third year, but only for journey-rate workers. They are still proposing wage freezes for meat workers and all other grocery workers below the top rate.

One of the key issues that the union has built a public campaign around is paid sick days. The union is asking for seven paid sick days on the first day you're sick. Currently, workers have to be sick for three days in a row before any sick pay kicks in.

A new study by the National Opinion Research Center highlights how crucial this issue is for all workers. Nearly one in four workers who lack paid sick days (23 percent) has lost a job or been told they would lose it for taking time off to care for a sick family member or a personal illness. More than half of all workers without paid sick days (55 percent) have gone to work sick. And workers without paid sick days are nearly twice as likely to say they've sent their child to school or day care sick.

Having a schedule in advance with at least two set days off is important to the union. At the moment, management gives workers only three days' notice for each new work schedule, and there's never the same guaranteed day off each week.

Also, Allied Employers' initial offer didn't include any increases in pension funding.

Erin Collins, a 17-year Safeway worker, described important issues in an e-mail:

Some of the things that ARE NOT being said, but are big issues to Safeway employees (besides the pensions and benefits) are that Safeway wants to take away Sunday time and one-third [pay]. They want to take away holiday time and half [pay]. The "journeymen' clerks" (I'm lucky enough to be in that category) will receive $1 more an hour for holiday and, I think, Sunday pay. Everyone else, which is the majority of the workers, will get straight time. They want to take away our vacation time, too. So someone like me, who's accrued four weeks of vacation time, they only want to pay me for two weeks of vacation time. I've been with Safeway for 17 years!

For health care, the employers have proposed higher premiums, higher deductibles and higher out-of-pocket costs. New workers' spouses/domestic partners would have to wait 24 months to get coverage. Management also wants to make it harder for workers to upgrade to the SoundPlus plan. Currently, workers have to wait three years to be eligible for SoundPlus, but the employer wants a six-year waiting period instead.

But that's not all. Union officials mentioned at the May general membership that management was trying to institute a third tier into the pay and benefits plan.

Another little-discussed issue revolves around job security--specifically with expansion of self-check out registers at a growing number of grocery stores. According to Bisrat Tekle, who has worked on and off for 10 years at the Kroger-owned QFC grocery chain in Seattle, his Seattle store had 14 regular check stands when the store opened. Now it has three traditional check stands with 12 self-check "U-scans" and five express lines.

"According to the contract, they were supposed to go back to the negotiating table and bargain over the increased usage of U-scans," Tekle said. "But the union gave us the middle finger. When you open one door, everything becomes open game. When you don't enforce your own contract, it becomes useless. The end result is that people will lose jobs, be unemployed, and families will go hungry. It will set a bad precedent. There will be too few jobs left for cashiers. Today, it's the cashiers. Tomorrow, it will be the meat cutters with more pre-packaged meats."

THE LONG list of attempted concessions is stunning. But Allied Employers is only trying to build on many concessions it has won from the union in the past.

As UFCW Local 21 member Misty Senn and Teamsters Local 38 member Debbie Gath point out in an editorial in the June 12 Everett Herald, "Grocery store workers are getting their hours cut, and the average work week is now less than 28 hours. And while some of us who have worked for years are paid better, a third of the workers get paid $10 an hour or less."

Washington state and Southern California have been ground zero in pay and benefit cuts in the past.

Back in 2003 and 2004, workers in Southern California struck Kroger, Albertson's and Safeway for five months. The strike was settled with a devastating contract that implemented a two-tier system under which wages and health benefits for new hires were significantly less than for the existing workforce.

"The contract increased waiting periods from four months to 12 months for individual (health care) coverage (18 months for clerks) and 30 months for family coverage," according to a study by the University of California-Berkeley Center for Labor Research and Education. "It increased co-pays, co-insurance and deductibles under the new plan, while restricting options."

While the 2007 contract eliminated the permanent two-tier system, according to union estimates, it will still take six to nine years for new hires to reach the top-pay scale under the Southern California contract.

The 2007 Puget Sound contract trumpeted gains in health care. Preventative care is covered at 100 percent. A $5 million "wellness" incentive program was set up. The most controversial aspect of the two contracts was the adoption of a "Health Reimbursement Account (HRA)."

Under the HRA, workers will have an annual allowance of $500 for an individual and $1,000 for a family, which can be used to pay for doctor's visits, lab tests, X-rays or any other covered medical expenses, without deductibles being charged. However, the allowance can't be used for prescription, dental and vision benefits, nor to pay health insurance premiums.

After the allowance is used up, workers pay all costs out of pocket until the annual maximum is reached. The plan kicks in from that point on.

Unfortunately, health benefits are still two-tiered. Under Plan A, which applies to those hired before August 15, 2004, office visit co-pays have been eliminated. The deductible is $150, with the company covering 85 percent of the coinsurance and workers 15 percent, with an out-of-pocket maximum of $1,000 a year.

Workers in the Plan B category (those hired after August 15, 2004) still have lesser overall benefits than those under Plan A, though the gap has decreased from the last contract.

For example, the co-pay still exists under Plan B. The deductible is $250 ($500 for a family), with the company paying 80 percent of the coinsurance and workers 20 percent, with an out-of-pocket maximum of $2,000 for an individual ($4,000 for a family).

UFCW Local 21 President Dave Schmitz exalted that this was "a groundbreaking health care benefits package that means better care at lower costs for members." While that is debatable, what he didn't say is that the money to pay for the new plan came from Allied payments into the multi-employer health plan, known as the Retail Clerks Welfare Trust (RCWT) getting cut from $4 an hour to $1.11 an hour.

While the payments did rise in each of the next couple years of the contract, the union used $150 million of surplus money in the RCWT to fund the HRA. In Southern California, the union allowed the HRA to drain $240 million of a $500 million surplus from the health and welfare plan.

Given this history, it's obvious why Allied feels like it can drag out negotiations here in Washington state for months while still demanding outrageous concessions. Local 21 did organize a flash mob action outside a local QFC store to protest the lack of sick day pay. The local also organized a series of rallies in front of stores in early May.

But the union still hasn't organized a strike authorization vote. For a union that has 35,000 members and is the biggest single local of any union in the state, there's real potential to flex some union muscle.

THE OUTCOME of these negotiations is a referendum of sorts on the Change to Win (CTW) federation's strategy of creating massive unions through mergers. The UFCW is a member of CTW, which formed in 2005 in a break from the AFL-CIO. Since then it has ramped up the mergers. Since then, my original local, 1105, has more than tripled in size through several mergers.

While the UFCW did do some organizing in the 1980s, the union's preferred method of growth has always been mergers. It was founded in 1979 with the merger of another union to form what was at the time the largest union in the AFL-CIO.

At the same time, since the 1980s, the UFCW has led the way in the move to negotiate two-tier contracts, according to Ken Jacobs in his excellent piece "A Tale of Two Tiers: Dividing Workers in the Age of Neoliberalism" in New Labor Forum. As Jacobs pointed out, "Of the 66 supermarket contracts negotiated by the UFCW in the first 11 months of 1985, 42 percent included two-tier provisions."

Knowing this history helps to provide a perspective on the two-tier contracts shoved down grocery workers throats in Southern California in 2004 and in Washington in 2007. It should then come as no surprise that Allied Employers feels like it can try to implement a third tier into the contracts.

There's no reason for the union to succumb to such pressure. All three of the Allied companies are in the top 50 of the Fortune 500 (Kroger, number 23; Supervalu, number 47; Safeway, number 50). It is true last year that profits were lower than in the past for the Big Three. Competition from non-union megastores like Target and Wal-Mart are behind the push to extract more concessions.

This is something that isn't lost on union members, but it also shouldn't be an excuse to attack workers. As Erin Collins put it:

The economy is bad because EVERYONE and their brother is either "freezing" wages or going backwards on pay. We have more people that qualify for welfare because of this. People think Wal-mart is bad? Safeway is taking lessons from Wal-mart on how to treat their employees! The reality is, if you want the economy to start building, you need to pay people so they are able to buy!

The money is there. The Allied companies have a combined $57 billion in assets, and according to the UFCW, the three companies paid their CEOs a combined $30 million last year.

One last key issue revolves around what happens if the union does reach a tentative agreement. In the past, the UFCW won't release the details of the contract until the day of the voting. Workers like Bisrat Tekle disagree with this approach. He said:

I think everyone deserves to read through the contract. The devils in disguise. It's about understanding the language. I have to read it at least two or three times. We aren't lawyers. The language is twisted and hard to understand. The union needs to hand out the whole contract, not just a summary, and then have the vote on it a week or two later. We need to have workers forums where workers can exchange ideas and learn from others stories.

The union has put the workers in a bad position. There needs to be a strike authorization vote at the very least as the first step in a campaign to build up the pressure on management. The union could call mass rallies and informational picket lines that could draw thousands of people--not just UFCW members, but other workers in the area who are also feeling the affects of high unemployment, budget cuts, attacks on their wages and benefits.

There's no time like the present to start throwing around the weight of the UFCW's 35,000 members in Western Washington. If the biggest union local in the state can't prevent these concessions, what kind of message does that send to the rest of the labor movement?

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