Grocery strike avoided; deal called ‘win-win’ for both sides

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

Officials with the United Food and Commercial Workers confirmed Monday that they had reached a three-year labor contract with Ralphs, Vons and Albertsons, averting a grocery strike that would have idled more than 54,000 workers across Southern California.

Officials from the union and the three grocery chains reached the deal after spending more than 24 hours in continual negotiations.

The talks, which have dragged on for months, grew more urgent after a deadline for a possible grocery strike passed Sunday evening.

In a joint statement, Ralphs, Vons and Albertsons said, ‘We are pleased to have reached a tentative settlement agreement with the union that continues to preserve good wages, secure pensions and access to quality, affordable healthcare -- while allowing us to be competitive in the marketplace.’

The union negotiators agreed, saying in a statement Monday, ‘We have attained our most important goal, which was continuing to provide comprehensive healthcare to the members and their families.’

Details of the tentative agreement were not made public, pending ratification of the contract, according to union officials and a statement from the grocery chains.

The contract must still be approved by union members, who are expected to vote on the deal this Friday and Saturday. The contract will be ratified if at least 50%, plus one, vote in favor of it, union officials said.

Union officials and the grocers see the contract a “win-win” for both sides, according to Greg Conger, president of UFCW Local 324 in Orange County. Yet sources from both sides agreed that the once-glacial pace of negotiations sped up after the UFCW last week gave 72-hours notice to cancel its labor-contract extension, a mandatory step before a walkout.

‘We were dead serious,” Conger said. ‘They were, too. And then we all sat down and looked at each other and said, ‘We better figure this out.’’

The contract covers checkers, baggers, meat-cutters and other grocery workers from Santa Maria to the Mexican border, including those employed by Ralphs, which is owned by Kroger Co. of Cincinnati; Vons and Pavilions, owned by Safeway Inc. of Pleasanton, Calif.; and Albertsons, which is owned by SuperValu Inc. of Eden Prairie, Minn.

The contract also covers employees at other retailers, including Stater Bros. markets, which are negotiating separate deals with UFCW’s seven area locals.

The labor fight harks back to 2003, the last time Southern California grocery workers and their employers faced a similar labor standoff. The subsequent 141-day strike and lockout that began that fall left many union members with staggering debts. It reportedly cost the employers an estimated $2 billion and gave competitors an opportunity to step into the gap. This time around, one key sticking point has been healthcare funding. As of last week, the health plan was expected to be funded at about $1.4 billion over the span of three years, according to sources familiar with the talks but who declined to be identified due to concerns over jeopardizing the negotiations.

The plan covers more than just these workers of Ralphs, Vons and Albertsons: There are approximately 90,000 participants in Southern California and more than two dozen companies that also pay into a jointly managed healthcare trust fund.

A key question, for both the UFCW and the three employers, was how much each side would have to pay in order to ensure that the fund would be economically viable for the long term.

Under a recent offer from the employers, grocery workers would pay $9 a week for individual coverage and $23 a week for a family, company and union officials said.

The grocers had said these premiums were necessary to help offset the rising cost of healthcare. But union officials had said such premiums don’t come close to the level of revenue needed, because there are too few employees working too few hours. Instead, union officials argued, the employers need to pay more.

Though such sums may seem relatively modest, the costs can add up quickly for workers such as Mason Elvidge.

A few months after the 2003-04 strike ended, Elvidge said, he was hired at Albertsons and became an apprentice in the meat department, working 30- to 40-hour weeks and earning $9.50 an hour.
But when the nation’s economy slumped four years ago, Elvidge said his job was eliminated and he became a grocery “courtesy” clerk.

Now, Elvidge said he works fewer hours -- between 16 to 24 hours a week -- and earns $8.30 an hour at an Albertsons store in Palmdale. He lives with his parents to help make ends meet.

‘I always have to borrow money from my parents, which is hard,’ Elvidge, 25, said recently. ‘I’m grateful for my job and I’m willing to pay a little more for my health insurance, but c’mon. The company needs to help out.’

Even though the negotiations have been tense, the talks have dragged on in part because neither side wanted a strike. California’s unemployment rate hit 12.1% in August -- the second-highest in the country, behind Nevada -- as the nation’s recovery stalled. Some economists believe the U.S. is poised for a double-dip recession.

The state’s economic woes, added to memories of hardships suffered in the 2003-04 strike, have had workers scared. In recent weeks, grocery employees have scrambled to get their teeth cleaned, prescriptions filled and doctor visits covered, according to UFCW officials.

That rush on benefits has, in turn, put a strain on the healthcare trust fund.

The union locals, too, were loath to have a strike happen. Their concern: a shrinking membership working fewer hours, and therefore contributing less, as older workers and retirees continue to draw more on benefits.

This has, in part, prompted one of the seven locals -- UFCW Local 8 in Roseville, Calif. -- to recently propose an increase in its membership dues. (Union officials from Local 8 could not be reached for comment Monday on this proposal.)

And Ralphs, Vons and Albertsons -- whose industry is just beginning to stabilize after two tough years of inflated food prices and economically wary shoppers -- worry about losing even more of their hold on Southern California’s grocery business. None of the grocery chains has fully recovered its market share from before the 2003-04 strike and worker lockout.

RELATED:

Grocery strike averted with Ralphs, Vons and Albertsons

Grocery workers give notice to end contract extension

In the event of a walkout, the chains’ competition would be the big winners

-- P.J. Huffstutter