Retailers in Arizona, Pennsylvania and West Virginia came to contract terms with the United Food and Commercial Workers Union last week, while in Seattle the chains and union appeared to be moving closer to resolving a contract dispute.
The negotiations, along with those that have been settled in recent months in Texas, Michigan and Illinois, have been facilitated by the messy, 141-day strike-lockout that resulted in a new contract for UFCW members at Albertsons, Kroger-owned Ralphs and Safeway-owned Vons in Southern California earlier this year, observers said.
"I think in many cases both sides have been looking to avoid a similar situation to Southern California," said Jason Whitmer, analyst, FTN Midwest Research, Cleveland. "Ever since then there hasn't been a clear winner. Most of them have kind of been fought on neutral ground, and that's probably a result of that five-and-a-half-month strike."
The settlement in Arizona among 350 units of Fry's and Safeway and 14,000 members of UFCW Local 99 came eight months after the previous contract expired, while the new contract between 36 corporate units of Giant Eagle in southwestern Pennsylvania and West Virginia and 5,300 members of UFCW Local 23 was settled within a few days of the previous contract's expiration date.
Meanwhile, negotiations were scheduled to resume in Seattle this week with a federal mediator after five UFCW locals and the chains they are negotiating with agreed to extend their contract through July 9. Employees of Albertsons, Safeway, and Kroger's QFC and Fred Meyer chains have been working under contract extensions since May 2 while chain leaders negotiate new contracts that support rising health care costs.
In Connecticut, however, members of UFCW Local 371 at three unionized locations of Adam's Super Food Stores have authorized a strike if they do not reach a settlement by midnight Saturday, although both sides were continuing to negotiate last week.
Adams is a 13-store company based in Cheshire, Conn., whose owners include several principals of Bozzuto's, also based in Cheshire.
Joseph M. Kelley, executive vice president of Adams, told SN the primary issue in negotiations has been the health and welfare plan. "The union decreased the benefits for employees but wants us to pay more," he explained, "whereas we've proposed a Blue Cross-Blue Shield Anthem plan to the union."
He said the strike vote was taken after only two negotiating sessions, "but we will continue to negotiate in good faith right up until the deadline, and we hope the union will do the same."
Brian A. Petronella, president of Local 371, told SN he believes the company wants to destroy the union. "When we settled with Stop & Shop and Shaw's in February, we received increases in the health and welfare fund premium with no paycheck deductions for insurance. But Adams wants an HMO plan that will take between $25 and $45 a week out of each paycheck."
In Arizona, the new agreement, which was approved by 85% of the members voting, added a second tier for wages and health benefits, though new hires will be eligible for the same health benefits current employees have after six years, Mike Vespoli, director of community affairs for the local, told SN.
He said the contract took so long to finalize after the previous agreement expired Oct. 26 because the employers wanted to resolve the labor dispute in Southern California before negotiating an agreement in Arizona. Once the California contract was settled, talks became more focused, Vespoli said.
Kerry Luginbill, a spokeswoman for Safeway's Arizona division, told SN the company was glad to have the contract settled, "especially after such a lengthy negotiations period."
She said the process was extended "to allow both sides to have a thoughtful discussion to accomplish what each wanted to accomplish. In addition, the situation in Southern California took resources from both sides, but the talks focused on the local market and what we were trying to accomplish here."
A spokesman for Kroger, Fry's parent company, was not available for comment.
The new agreement in Arizona is retroactive to last October and expires Oct. 25, 2008. According to Vespoli, the union is satisfied with the settlement, whose provisions include:
A ratification bonus of 30 cents per hour worked from last Oct. 25 through June 19 for all journeyman clerks, plus lump-sum bonuses of 25 cents an hour in June 2005 and 25 cents an hour in June 2006, and a 25-cent hourly raise in November 2007, although that raise can be diverted to health insurance costs if an employee desires.
A lower wage rate for employees hired after ratification, starting at $6.50 an hour and progressing to $12.05 an hour, compared with a $7.50 starting rate and $14.97 top rate for existing employees.
No employee co-pays on insurance premiums, although employees will have to pay higher rates for doctor visits and prescription co-pays.
A $4 cap on the employer's hourly contribution to health care benefits over four years, in contrast with maintenance of all benefits under the prior agreement.
A separate health care plan for new hires in which their benefits increase from a minimal plan the first three years to a better plan in the next three to full coverage commensurate with what existing employees get at the end of six years.
An increase in retirees' outlay for health care premiums to $125 a month, from $85 under the previous contract.
The contract at Giant Eagle, which will expire June 24, 2007, covers 4,200 retail clerks and 1,100 meatcutters at 36 company-owned stores. Daniel Shapira, special counsel for Giant Eagle, said he believes "the working relationship with our labor partners will position Giant Eagle to compete against the expanded set of new retail players in the food industry."
Union members approved the agreement by a 3-to-1 vote, according to Ron Lenhart, president of Local 23, who said terms of the new agreement include:
The option for members to stick with a point-of-sale health care plan for a $60 monthly premium or to switch to an 80-20 indemnity plan with no co-pay. Lenhart said the company had hoped to impose a co-pay on the 80-20 plan.
Wages increases of $1.10 an hour -- in increments of 40 cents, 35 cents and 35 cents -- over the three years of the contract.
A $6 hourly starting rate for new hires, up from $5.15, but with a longer progression rate -- 48 months instead of 36 months -- to get to the top rate of $8.40. Clerks already in the midst of their 36-month progression received a wage increase of 85 cents per hour.
The ability for clerks working in separate meat, deli and prepared-food departments to work in any of those departments at peak hours.