LABOR DIVISIONS

ELLIOT ZWIEBACH

It may be a long second half of 1996 on the labor front. With union-management disputes in the Denver and Vancouver markets over maintenance of benefits and work rules, the first half of the year is ending on a contentious note.

Those same issues -- heightened by the proliferation of nonunion supercenters, a growing reliance on part-time employment and the use of lower-rate contracts -- are among the topics that will pop up repeatedly as new bargaining sessions get under way in markets nationwide.

Employers basically will seek to level the playing field with supercenters, alternative formats and other supermarkets, while the United Food and Commercial Workers Union will fight for job security and maintenance of benefits for its members.

Management's goal in negotiations around the country "is to continue to construct and reconstruct an operating framework that allows high-cost union companies a reasonable chance to compete with some very powerful nonunion companies -- though perhaps trying to compete on a level playing field is no longer possible," said Bob Duvin, who acts as a spokesman for the food industry in Cleveland, one of the areas gearing up for contract talks later this year.

That framework, he said, would include more flexibility in scheduling, the use of lower-paid employees and assigning shifts -- "so we're not time-and-a-halfed and double-timed to death with high-cost employees," he explained -- "while obviously maintaining restraints on economic core issues of pension and health and welfare." What the union seeks for its members in most negotiations is "sufficient hours at a decent wage rate with affordable benefits to keep themselves and their families secure," according to Greg Denier, director of public relations for UFCW International, Washington.

"The UFCW and retail food employers have a positive working relationship in most areas of the United States, which doesn't mean there won't be differences of opinion or perspective. And bargaining is always tough," Denier told SN. For the most part, retailers declined to comment for this article. The major contracts due to expire in the next six months include the following, in chronological order: · June 29, in northwestern Ohio, covering 4,700 employees at Kroger's Toledo division and Seaway Food Town, Maumee, Ohio, where supercenter incursion could generate sparks during negotiations. · July 27, in metropolitan New York and northern New Jersey, covering 10,000 employees at A&P and Edwards Super Food Stores, where greater recognition for part-time employees will be an issue. · July 27, at Dominick's Finer Foods in Illinois, covering 8,000 employees, where maintenance of health and welfare benefits will be a major item on the agenda. · Sept. 8, in northeastern Ohio, covering 15,500 employees at various chains and independents in Cleveland, Akron and Canton, where work rules and competitive wage levels are expected to dominate talks. · Nov. 17, in Ontario, Canada, covering 6,500 employees at A&P's Miracle Food Marts, where lower-rate contracts at stores converted to the Food Basics format are likely to be a much-debated issue. The largest contract due to expire in the second half -- covering more than 18,000 employees at Giant Food and Safeway in the Washington-Baltimore area -- was renegotiated and signed five months before the current agreement ends Sept. 21. Other contracts to expire in the second half include Acme Markets in Wilkes-Barre, Pa., July 19 (covering 2,000 union members); Lucky Stores in San Diego, Oct. 16 (3,200 members); Homeland Stores, Oklahoma City, Oct. 26 (3,000 members); and Eagle Food Centers, Milan, Ill., Nov. 16 (3,100 members). Jonathan Ziegler, a securities analyst with the San Francisco office of Salomon Bros., New York, said labor is restive. "With a couple of exceptions, the industry has been in a benign state for some time, with very few work stoppages," he told SN. But unions are creating problems by giving different treatment to different companies, Ziegler added. "It seems labor is creating its own difficulties when it gives more favorable work rules to some companies and not to others, which makes the chains with less favorable rules anxious to get equality with the ones getting better treatment. "That situation can result in a more active willingness for labor to bluff, which clears the way for potential work stoppages." Another analyst said unions often opt for short-term solutions that may lead to long-term problems. "Very often, the unions are more interested in increasing their memberships by giving retailers more favorable contracts to keep them from operating on a nonunion basis, with the hope that one or two contracts later they can bring those contracts up to parity with the rest of the industry. "But that only makes their negotiations with the rest of the industry more difficult, and it creates problems down the line in negotiations with the retailers who initially receive the more favorable work rules." The economic environment in recent years has prompted most supermarkets to try to rein in their costs by restricting work rules in such areas as vendor stocking and minimum hours to compete better against employers without such restrictions and by cutting back on health care payments, said Ed Comeau, vice president at Donaldson, Lufkin & Jenrette, New York.

"Most union health-care plans are not merely Cadillac plans but Rolls Royce plans, with first-dollar coverage and no restrictions," Comeau said. "It's not a matter of supermarkets not wanting to provide coverage but one of introducing copayments and other less expensive options that reflect today's society." SN talked with UFCW executives and others in the cities where contracts will expire later this year to discuss the issues involved and the prevailing mood in each region. Except for the Cleveland management group, retailers declined to comment.

Northwestern Ohio (Toledo)

The issue of supercenter incursion could become a major issue in talks between UFCW Local 911 and representatives of Seaway Food Town, Maumee, Ohio, and Kroger Co.'s Toledo division. "Retailers in northwest Ohio will likely be looking for relaxed work rules, while the union will look for wage increases and managed health-care plans that maintain existing benefits," Chuck Cerankosky, a securities analyst with Hancock Institutional Equity Services, Cleveland, told SN. The biggest issue in the upcoming talks will be maintenance of and possible improvements in health care benefits plus wages, pension contributions and language changes concerning full-time vs. part-time workers, said Dave Gelious, president of Local 911. Local 911 is a new union entity, formed from the combination of separate retail clerk and meatcutter locals. The meatcutters were always the more aggressive of the two locals, said Gelious, who comes to Local 911 from the meat side. As a result, he said, the union will take a stronger stance on relaxed work rules in the upcoming negotiations with Kroger and Food Town. The predecessor union granted Meijer, Grand Rapids, Mich., more favorable work rules in a contract that was signed last year after a 10-week strike, he noted.

"And if Kroger and Food Town insist on terms similar to what Meijer got a year ago, they will have a strike," Gelious said. "We won't allow Kroger and Food Town, which have been organized for 35 years, to be brought down to the level of the Meijer contract when Meijer has been here for only a couple of years." Gelious told SN he's unsure why the union gave Meijer the terms the chain asked for a year ago. "I was not here then, so I don't know," he said. Local 911 is already gearing for a strike against Meijer in two years if it insists on maintaining its existing contract terms, he said.

Metro New York/Northern New Jersey

UFCW Local 464A intends to seek greater contract recognition for part-time employees at stores operated by A&P, Montvale, N.J., and Edwards Super Food Stores, an Ahold USA division based in Windsor Locks, Conn. "Years ago, part-timers were viewed as a group that complemented the full-time work force," said John T. Niccollai, president of the local. "But that's no longer the case. "Part-time employees are now an integral part of the work force. The way the industry operates today, it utilizes more part-time workers, and they have become more important. So in our discussions, we want to see what we can do to improve their lifestyles." The union also will seek to improve wages and medical and pension benefits for its members and to give more preference to part-time workers looking for more full-time work, Niccollai said.

He added that he expects A&P and Edwards to negotiate as separate units, as they have in the past. Although bargaining has always been tough, Niccollai said, there has not been a strike during contract negotiations since 1973. Illinois

UFCW Locals 881 and 1540 will seek to maintain existing benefits and improve working conditions at Dominick's Finer Foods, Northlake, Ill.

Bill Dzik, president of Local 1540, told SN he was impressed that Dominick's new owners -- Yucaipa Cos., Los Angeles -- spoke with union executives and reassured them that they are not anti-union. "As long as we are all working on the same field, we should have no problems," he said. High on the union's agenda for its talks with Dominick's is maintenance of existing health and welfare benefits. "When we discussed our proposals internally, the clearest message we got was that we not give anything away on health and welfare," Dzik said. "The term 'copayment' is getting very popular, but we have no plans to focus on any copay programs. That's something we're not interested in. We simply want to keep what we've got." The union also will be seeking wage increases and changes in some work rules, including preferential shifts for the most senior employees and an additional rest period per shift, Dzik added. Northeastern Ohio (Cleveland)

Work rules and competitive wage levels are likely to be major negotiating points between the industry and UFCW Local 880, which represents 15,500 members at a host of chains. The industry here negotiates three contracts: one for retailers in the Cleveland area (Riser Foods, Bedford Heights, Ohio; Finast, an Ahold USA division based in Maple Heights, Ohio; Heinen's, Warrensville Heights, Ohio, and various independents); one for operators in Akron and Canton, Ohio (Acme Markets, a division of Fred W. Albrecht Grocery Co., Akron; Fisher Foods Marketing, Canton; and various independents); and a single meatcutter contract. Bob Duvin, a spokesman for the local food industry, said retailers in the Cleveland area "don't think of themselves in a concessionary mentality. This has been a low-growth, stagnant marketplace that's been a battleground for a host of low-cost competitors that can't be ignored."

The key issues will be work rules, contract language, wages and maintenance of or improvements in health benefits and pensions, said Jim Jerele, president of Local 880.

Despite the presence of seven Super Kmart Centers in greater Cleveland -- all nonunion operations -- Jerele said he doubts that supercenter competition will be a major issue because of the union's involvement in keeping pressure on supercenters. "We have a special assessment of one hour's wages per month from each member that goes into a fund directed at nonunion supercenters in the marketplace -- to pay for the costs of advertising in newspapers, on TV and in special mailings urging consumers to shop at union stores," Jerele explained. "That effort has the effect of lessening the issue at the bargaining table because we are putting up a battlefront to prevent encroachment of nonunion operators in our market," which has benefits for employers as well as the union, he said. Duvin agreed that the union's efforts will ease the atmosphere regarding supercenters at the bargaining table, "but supercenters will be an issue," he told SN.

Ontario

Ontario was the scene of one of the industry's longest strikes in recent years: a 92-day strike by retail clerks in UFCW Local 175 and by meatcutters in Local 633 against A&P's 62 Miracle Food Mart stores in 1993. Partly because of the residual effects of that strike, A&P converted 19 of its Ontario stores to Food Basics, a lower-cost format that it operates under a separate collective bargaining agreement. That move has been a source of irritation to the union, Michael Fraser, president of Local 175, told SN. He said the union believes the lower-rate contract under which A&P is operating the Food Basics stores can take effect only if a store is closed "a significant period of time, which those stores were not." Although the union has taken the matter to the Ontario Labor Relations Board, "the disagreement will probably be worked out during contract negotiations," Fraser said. Talks are scheduled to begin in late August, he added.