DISPUTE NON-RESOLUTION 2004-02-23 (1)

DAVID GHITELMAN

The five-month-old Southern California labor dispute is a watched pot that refuses to boil. A lot of heat has been applied, but as of last week, there had been no resolution.

Among the watchers, supermarket companies -- particularly those involved in the conflict -- insist that what is happening on the West Coast should have no effect on this year's negotiations elsewhere in the country. Leaders of United Food and Commercial Workers Union locals maintain that their members are ready to strike in order to preserve their benefits and wages, even though that could mean spending months on a picket line, as it has in California.

Steve Burd, chairman, president and chief executive officer, Safeway, Pleasanton, Calif. -- the supermarket executive union officials consider largely responsible for the Southern California strike-lockout -- said earlier this month he doesn't think the current labor unrest on the West Coast will affect his company's negotiations elsewhere in the country this year. "Each market is very different," he declared.

A spokesman for Kroger Co., Cincinnati, offered SN a similar view of his company's upcoming negotiations. "Every contract and every market is different," he said.

However, he immediately added that every negotiation Kroger will face this year will probably revolve around a single topic. "The skyrocketing cost of health care is an issue facing every company in America, including Kroger," he noted. "We've worked hard to communicate with our employees about the significant challenges facing our business, and we'll continue to do that in 2004."

The union leaders who will be bargaining with Safeway and Kroger, among other companies, tended to express a more unified theory of labor relations.

Marv Russow, president, United Food and Commercial Workers Union Local 227, Louisville, Ky., is beginning preparations to negotiate with Kroger over a contract for 9,991 employees whose current contract is scheduled to expire April 10. (For a list of the largest UFCW contracts that expire this year, see Page 18.)

Russow told SN, "I think every settlement that's reached has an impact on the others.

"I want to maintain our insurance as we now have it, and I expect that based on settlements that have been reached and problems that have been occurring out West, that that's not going to be easily obtained."

Even a union leader who said his local does not face escalating health costs expressed the opinion the California dispute will have ramifications across the nation. John Niccollai, president, UFCW Local 464A, Little Falls, N.J., will be negotiating a contract with A&P, Montvale, N.J., for 8,135 employees whose current contract expires July 17.

"I think it will probably affect all negotiations this year throughout the country," Niccollai told SN.

Academic observers of the labor scene also said the strike will have a national impact. Paul Clark, a professor of labor relations at Pennsylvania State University, University Park, Pa., noted, "It's quite clear that employers in other parts of the country are watching what's going to happen out there.

"If the employers in Southern California are successful in significantly lowering health care costs and wages and other benefits, then that's going to be the yardstick employers in subsequent negotiations are going to use."

Mood Altering

Union leaders told SN that despite the example of Southern California, where a five-month labor dispute has produced considerable hardship for striking and locked-out workers, their members are prepared to walk off the job.

The largest group of supermarket contracts scheduled to expire this year, those of roughly 42,000 employees of Stop & Shop, Quincy, Mass., a subsidiary of Netherlands-based Ahold, appeared to be headed for a strike earlier this month.

At stake were five separate contracts with five separate locals -- representing workers in Connecticut, Massachusetts and Rhode Island -- all of which expired at the same time and were negotiated simultaneously, with representatives of all involved unions sitting in on each other's discussions, according to Brian Petronella, president, UFCW Local 371, Westport, Conn.

Petronella told SN there were three major issues: maintaining health care benefits; increasing wages; and keeping the five contracts from expiring at the same time. Early this month, he described the talks as stalled. "We're nowhere," he said. "We haven't reached any kind of agreement on anything."

Asked if his membership was likely to strike, he replied, "After we take a strike vote, if the company persists with their current position, there will have to be a strike."

However, a marathon bargaining session early last week that continued several hours past the contract deadline of midnight Feb. 14 produced a proposal all five locals ratified at meetings on Feb. 15, sessions at which the union membership had been prepared to hold a strike vote if the contracts had been voted down.

Other leaders said they hope to avoid the sort of brinkmanship the labor and management practiced in New England.

Bill Hopkins, president, UFCW Local 455, Houston, is getting ready to negotiate with Kroger for 12,091 union members whose contracts expire April 3. "If the company attempts to do what they've attempted elsewhere in terms of shifting the cost of health care to the employees, it's going to be adamantly opposed," Hopkins told SN. "They view it no differently than they would a wage reduction."

Louisville UFCW leader Russow said his members have not been intimidated by the length of the Southern California strike. "I don't think they'll be more or less likely to strike over certain issues," he observed. "I just think they'll be much more educated to the seriousness of it."

Yet, Russow said he doesn't expect the bargain to involve hostility. "I don't think the tone of the talks will be any different" from what it has been in the past, he noted. "Both sides are cognizant of the challenges facing us, and hopefully we'll keep it very professional."

Some union leaders said they are not optimistic about the approach company negotiators are likely to take. Jim Lowthers, president, UFCW Local 400, Landover, Md., is about to start negotiating with Ahold-owned Giant Food, also based in Landover, and Safeway, for the more than 16,000 Washington-area employees of those two companies, whose contract expires March 27. (UFCW Local 27, Baltimore, will be simultaneously negotiating the contract of nearly 9,000 Baltimore-area employees with the two companies.)

Lowthers told SN, "I think if the companies bring to the table in the Washington metropolitan area the attitudes they brought to the table in Southern California, they'll certainly affect contract negotiations because they're extreme.

"I have to see. You can't tell until you get further along. But I have no reason to believe they will have a different attitude in Washington."

Lowthers explained that his pessimism is based on his experience last fall, when 3,300 members of his local working at Kroger stores in West Virginia and parts of Ohio and Kentucky staged a nine-week strike.

"They feel they were forced on strike for no good reason, and they're correct because the companies have plenty of money to take care of the issues at hand, and they just refuse to do so," he said.

Lowthers' Washington-area workers, he said, take a similar view. "They're fully prepared to do what's necessary to make sure they get a fair share of what they earned for the company," he declared. "They're not scared or influenced by what's going on in Southern California. In fact, they believe the companies have acted wholly inappropriately.

"If the companies want to take those kind of extreme positions here, they're ready to go on strike for as long as they need to."

Changing the Union

Some observers of the Southern California dispute, noting its length and the toll it is taking on union members, have criticized the UFCW as ineffectual. A few have said the fault is the union's decentralized structure, which they claim limits its ability to deal with centralized national companies, such as Kroger and Safeway.

Local leaders, however, strongly support their union's structure and the strategies it has employed in Southern California.

New Jersey's Niccollai said changing the structure of the UFCW would be extremely difficult. "Every local is an entity to itself," he observed. "Every local union president is elected. Everyone has different ideas or thoughts."

Still, he noted that there could be some opportunities for centralization. "Sure, especially in areas of pensions and health care benefits, I see that happening. Wages? Although we try to have parity, there are different parts of the country with different costs of living."

Louisville's Russow said he was also skeptical of whether negotiations could be nationalized. "The retail situation in California is different from the one in Maine, or in Florida vs. Seattle," he noted. "It can't be one-size-fits-all. There are competitive and economic differences.

"And health care is difficult to buy nationally. Perhaps you could buy it regionally, but not nationally."

Labor academics also questioned the effectiveness of centralized unions.

Penn State's Clark said centralized bargaining has worked in some industries, such as automaking and steel, but he added that it usually requires "an exceptionally strong union culture" of the sort the UFCW lacks.

John Budd, professor of human relations at the University of Minnesota, Minneapolis, offered a similar view. "Labor unions need to be really careful not to become overcentralized because it runs the risk of making the leaders out of touch with the members," he observed. Budd pointed out that decentralized unions are better able "to instill the loyalty that is needed to maintain picket lines for five months or more, to make the rank-and-file feel that this is their struggle."

As for the UFCW's Southern California strategy, Lowthers maintained that it has been a nearly complete success. "The fact is you can't have a better strike than you have in Southern California," he said. "The only thing that matters in a retail strike is customers. If you have workers on a picket line and customers don't shop, that's it. If customers don't go through that picket line, that's a fully successful strike."

Clark said he was not entirely sold on this analysis. "Well, that's one measure of the success of a strike," he commented. "But ultimately, to what end are you keeping people out of stores?

"Unless they are able to come out with a contract that retains to a much greater degree than the employers want retained the benefits and wages they've had in the past, it's hard to call it a victory. Ultimately, the success or failure of this strike is going to depend on the bargaining outcome."

A Strike That May Change America

The retail food business could alter the dynamics of labor relations in many industries across the country, depending on the final outcome of the Southern California labor dispute.

Paul Clark, a professor of labor relations at Pennsylvania State University, University Park, Pa., told SN the ongoing strike-lockout in Southern California has attracted the attention of employers and labor leaders outside the supermarket industry throughout the United States.

Clark noted that if or when the dispute is finally resolved, the supermarket companies will be viewed as having prevailed in their efforts to limit worker benefits; as a result, management in other industries are likely to make a similar push.

However, Clark added, "If the union is able to hold the line or settle where they are now, I think other employers are going to be reluctant to get in the position the Southern California grocery employers are in. That is, the union will have shown they are willing to draw the line, and there are going to be huge costs for both sides beyond that."

Evidence of the dispute's importance to U.S. organized labor is the involvement of Richard Trumka, secretary-treasurer of the AFL-CIO, Washington, Clark pointed out. "The labor movement sees this as a pivotal battle," he said. "The labor movement hasn't had much momentum in recent years, really since the UPS strike of the late '90s.

"That UPS strike gave the labor movement a real infusion of energy and confidence. I think battles like this one, which become national in interest, have that potential, and labor sees that this could either give them an infusion of energy or it could sap the little momentum they have now."

John Budd, a professor of human relations at the University of Minnesota, Minneapolis, said the Southern California strike-lockout could have an even broader impact. "Health care is obviously not a grocery industry issue," he said. "It's not even a union issue. It merely gets the most attention in unionized situations because the negotiations are so explicit.

"Stepping back from labor sympathies or management sympathies, one could be optimistic that maybe this will start to galvanize public pressure to get more of a national solution."