LABOR PAINS 1995-02-20 (2)

All's not likely to be quiet on the labor front as 1995 unfolds. Coming off last year's contentious environment, this year presents union and management a full plate of contract expirations and a plethora of issues.

ke actions, while, from management's perspective, the market for workers isn't strong enough to permit hardball negotiations.

But through all that, observers maintain, participants are gearing up for an important year that will be characterized by bellwether issues such as:

Health care, which is expected to lead union bargaining agendas as labor attempts to head off potential reductions in benefits.

Wage parity, a hot-button issue that figured in last year's 14-week strike against A&P in Canada.

Guaranteed hours, a key element in a big labor action that involved Portland, Ore.-area chains.

During the year, retailers of all sizes will engage in contract negotiations, and a number of multiregional chains, including Albertson's, Kroger Co. and Safeway, will face bargaining on several fronts this year. Kroger declined comment; Safeway couldn't be reached for comment. The Albertson's negotiations could be particularly contentious. Other chains facing contract expirations include Grand Union, Jewel and A&P. Many observers anticipate that the mood of labor-management relations in 1995 will hinge on fundamental factors: the availability of labor and the course of the economy.

Jonathan Ziegler, a securities analyst with Salomon Bros., New York, said the large number of market areas with limited labor pools will make negotiations tougher this year.

"Rank-and-file in those areas feel they have room to make demands," he said. "In markets where labor is tight, unions tend to ask for more, and if managements are intransigent, as they were in Portland, then there might be some strikes."

But Ziegler said he does not see many issues over which employees are likely to be willing to strike.

"The economy is not strong enough anywhere that people will want to take a hard line in local battles," he said. "Inflation isn't heating up, so employees aren't asking for wage increases. And health and welfare are not issues that will make people want to walk out."

While a number of chains are facing contract expirations this year, Albertson's may face special attention from labor.

Dave Barry, executive vice president of the United Food and Commercial Workers International Union, Washington, told SN the union anticipates particular confrontations with Boise, Idaho-based Albertson's throughout the year. Albertson's faces contract expirations in 1995 in northern California; Seattle-Tacoma and Yakima, Wash.; northern Nevada, and Salem, Ore. According to Barry, Albertson's broke ranks with the multiemployer bargaining unit in southern California last year in a successful effort to gain a lower wage scale for employees at its Max warehouse stores, and the chain has broken ranks again in the current round of northern California negotiations.

"Albertson's wants to get things other operators don't get, and it's seeking advantages over its competition," Barry said.

One of Albertson's goals, he said, is to get contract language that bars employees from using union assistance in filing discrimination cases based on race or sex. Albertson's paid $29.5 million to settle a discrimination suit in northern California in 1993.

According to Barry, Albertson's has taken a tough stance in negotiations for a meatcutter contract at three stores in El Paso, Texas. After the stores' employees rejected a management proposal and went on strike, the union spread informational picket lines to an Albertson's store in New Mexico and to two in the Houston area. Responding to the union's comments on Albertson's, an Albertson's spokesman told SN: "Albertson's decided not to bargain with other grocers in northern California because of the competitive situation there. "Currently, there are several substandard contracts that offer our competitors up to a $4-per-hour advantage. We want to negotiate contracts that are fair to our employees and that give us an opportunity to compete on a level playing field. "We haven't yet begun bargaining or exchanged any proposals. For this reason, we cannot comment on any proposals we'll make. We will say, however, that we've never made nor do we intend to make any proposal that would limit an employee's right to file discrimination charges or lawsuits." Of all the issues facing the major chains this year in their dealings with unions, health care could be the most important. That's because UFCW is giving that issue No. 1 priority, according to Barry.

The union seeks to ensure that employee benefits are not reduced, while employers want to explore alternative health care methods that may provide equal or greater coverage at lower costs.

"Health care had such a miserable outcome in Congress last year, so we are going back to what we did all along, which is to put health-care reform at the top of the bargaining list," Barry said.

Many management teams are likely to find themselves in disagreement with labor on this point. One supermarket retailer told SN: "We're trying to move contracts to more of a managed care environment, to promote the idea of using health maintenance organizations and preferred physician plans as a way to control costs.

"While we've made some progress toward meeting that goal, it's a gradual process to convince the union that they won't be giving up coverage or security with HMOs," the retailer said.

Ed Ricker, a Grand Blanc, Mich.-based consultant who works with supermarket management representatives, told SN that health care could be the area where the line is drawn in union-management relations.

"The industry wants the union to share in the cost of health premiums, which the union doesn't want to do," he said. "The union is unwilling to give in on that point, and it's willing to strike over it." Another important issue is whether the unions will provide concessions to level the playing field with nonunion alternate-format operators. Cross-format wage parity has become a major issue in most areas of the country, observers said. It was also the issue that led to the 14-week strike by UFCW against A&P's Miracle Food Marts in Ontario that ended early last year.

Faced with lower-cost competitors, supermarkets are anxious to get union concessions on wages and work rules. Unions are reluctant to give up what they've already achieved.

According to Gary Giblen, managing director of Smith Barney, New York, the growth of low-cost alternate formats has increased the pressure on unions.

"The unions are rational enough to see the need to narrow the differential with nonunion operators, and although the unions are pressuring nonunion companies simultaneously, the differentials are still there."

Some observers said management teams that provide job security promises will be able to wring needed concessions from unions.

"Union people are looking for jobs and a sense of longer-term security," said one observer. "With the growth of nonunion competitors, the union wants to protect jobs. If that assurance can be given, then concessions can be made to enable employers to lower costs and compete more effectively.

"The union will consider concessions as long as it has assurances that the employer is committed to staying in business and won't pull out of a market."

The union also is interested in the guarantee of hours, which is likely to be another important issue in 1995. Although the food industry continues to rely more on part-time than full-time workers, UFCW hopes to assure its members longer hours by seeking promises of more full-time hours. The issue loomed large in the 12-week UFCW strike in Portland last year that affected 26 Fred Meyer stores and 100 units of other area chains in the same multiemployer bargaining unit. In negotiations in Portland before and during the strike, the union had sought a guarantee from employers of a certain ratio of full-time to part-time labor. The union originally asked that 60% of employees be guaranteed full-time work, but subsequently lowered the ratio to 41%

In the contract it ultimately signed with Portland-area retailers, UFCW did not achieve guarantees on full-time hours. But the contract did include a seniority scheduling clause that allows senior employees to gain full-time schedules by claiming hours from junior employees -- a provision that the union feels justified the strike, Rick Sawyer, director of membership services for UFCW Local 555, Portland, told SN following the strike.

"Once and for all, we've gotten seniority to be recognized for scheduling purposes, which wasn't part of the previous contract," he said.

Finally, another important issue this year is contract terms. Some retailers are expressing the need for longer-term pacts -- of four or five years' duration instead of the industry standard three-year agreement.