CHAINS SUE UFCW FOR BREACH OF CONTRACT

ELLIOT ZWIEBACH

DENVER, Colo. -- Four supermarket chains here are suing the United Food & Commercial Workers International Union, UFCW Local 7 here, and the local's president, for allegedly trying to repudiate written agreements concerning the union's pension fund.

According to the suit, the union and Ernest L. Duran Jr., president of Local 7, are in breach of contract for seeking to collect supermarket chain contributions to the union's pension fund that had been suspended for seven months by his predecessor as part of the negotiations for new contracts with retail clerks and meatcutters here in mid-1996.

The plaintiffs in the lawsuit are Albertson's, Boise, Idaho; City Market, Grand Junction, Colo., a division of Dillon Cos., Hutchinson, Kan.; King Soopers here, also a Dillon division; and Safeway, Pleasanton, Calif.

The suit, filed in U.S. District Court here, seeks unspecified damages, a ruling from the court that the contracts are valid and enforceable, and an injunction preventing the union from arbitrating the matter.

A retailer spokesman said the agreements were negotiated in good faith between the companies and Local 7. "The seven-month suspension of contributions was the union's proposal and, as the union's chief legal representatives during the negotiations, Duran certainly should have known the details of all agreements," the spokesman said. Duran told SN last week that the seven-month suspension was covered by a side agreement but was not written into the union's contracts with the chains and is therefore not valid, "and as a trustee of the pension fund, it's my obligation to follow and enforce the contract."

According to the suit, the pension fund was overfunded at the time of the contract negotiations, and Gary Hakes, president of Local 7 during the negotiations, agreed to the seven-month suspension of employer contributions to the fund in return for the retailers' agreement to increase their contributions to the fund following the seven-month suspension.

"At no time were plaintiffs advised that the agreements entered into by Hakes were not binding on Local 7," the suit contends. "Indeed, Hakes and a UFCW representative expressly stated that no other conditions were required to form the agreement to suspend the contributions to the funds, except fund trustee approval," which was ultimately granted, the suit says.

When Duran succeeded Hakes as president last January, the suit charges, Duran "advocated the repudiation of the agreements and moved for the trustees to authorize collection of the suspended contributions despite the fact that the trustees had already agreed to and implemented the suspension of contributions to the trust funds." The suit says Duran took the actions he did "because he contended that the agreements were not ratified by the membership of Local 7."

The four retailers contend in the suit they were told member ratification was not necessary.

The suit says the plaintiffs were told that Hakes had the power to bind Local 7 to the agreements "in order to obtain plaintiffs' agreement to other provisions in negotiations toward new collective-bargaining agreements."

By agreeing that the plaintiffs could suspend their contributions for seven months, the suit states, "UFCW and Local 7 either falsely represented that Hakes had the power to bind Local 7 to the agreements without ratification by Local 7's members or concealed the material existing fact that Hakes could not bind Local 7 to the agreement."