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Pension Issues Hold Up Labor Deal for Kroger in Houston
Front-line workers to receive wage increases in next 6 months. Kroger has had a "final offer," including a new pension scheme, on the table for months but union won't vote, the retailer says.
2 Min Read
Kroger storefrontPhotograph: Shutterstock
After months of negotiations have failed to land a contract with union workers, Kroger's Houston division this week spelled out its offer in a press release.
The deal on the table for United Food and Commercials Workers Local 455, which represents workers at the retailer's stores in the Houston market, contemplates $56 million in wage increases for employees, as well as plans to ensure access to reliable and affordable healthcare benefits, the retailer said.
The union, however, has refused to vote, Kroger contended, over objections to moving workers off an unstable pension plan and into a company-administered replacement.
The Cincinnati-based retailer has been moving to shore up or buy out pension liabilities for years now, including a deal reached earlier this summer with Ahold Delhaize and Albertsons and the UFCW to withdraw from varied multiemployer plans.
"Kroger's commitment to increase wages and ensure our associates have access to world-class affordable, secure and reliable healthcare benefits is a core priority for the company," said Joe Kelley, president of Kroger's Houston Division. "Our plan removes any uncertainty front-line associates experience with their current health and welfare trust fund plan.”
Details of Kroger's "last, best and final" offer, first revealed in August, include:
Every front-line Houston associate will receive an increase in pay over the next six months, which follows wage increases earlier this year and $8 million in wage increases in October 2019.
Kroger Houston will spend more than $75 million annually on healthcare for hourly associates.
Kroger Houston associates will pay $32 for individual coverage or $172 for family coverage each month in a company-administered plan. Previously, associates were covered under the South-Central Health and Welfare Fund, which Kroger said is unstable because it significantly reduced benefits in 2019 for Kroger associates. It said moving to a company-administered plan will help ensure stable, affordable and secure benefits for Kroger Houston associates now and in the future.
Kroger has also offered to invest nearly $1 billion to improve the stability and security of past and future pension benefits for 33,000 associates across 14 divisions, including Houston meat clerks.
UFCW Local 455 had not responded to WGB’s request for comment by posting.
The Kroger Houston Division operates more than 100 stores in Southeast Texas and Louisiana and employs more than 18,000 associates.
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