Grocers Assume Hard Line Early In Contract Talks

Staff Reporter

In what is likely to be the beginning of stormy contract talks, the union representing Southern California grocery workers has disclosed a management proposal that would seek changes to work rules and overtime pay policies.

Grocers want unlimited use of lower-rated employees, such as baggers, for higher-rated jobs like the service deli without any pay increase, according to the proposal, which was presented during a negotiating session last week and made available to the Business Journal by union officials.

Employers also called for the elimination of time-and-a-half pay for Sunday shifts in favor of a $1 per hour premium and the establishment of different pay rates based on cost-of-living rates for different geographic regions within Southern California.

The United Food and Commercial Workers, in turn, demanded pay increases and maintenance of all health and pension benefits in their contract proposal.

"It will be a heated negotiation, there's no doubt about that," said Kathy Finn, director of collective bargaining research and education for UFCW Local 770, which represents about 18,000 workers in the Los Angeles area.

The contract talks involve Albertsons Inc., Ralphs, a unit of Kroger Co., and Vons, a unit of Safeway Inc. (Stater Bros. Markets is not participating in the negotiations, but has agreed to abide by the new contract's final terms.)

Terry O'Neil, a spokesman for Ralphs, said he would not comment on any of the initial proposals. Spokespeople for the other chains did not return calls.

In recent renewal years, the two sides had already ratified a new contract by early September. This time, both sides are signaling that an agreement is unlikely to be reached by Oct. 5, when the existing contract expires.

"If we don't get something we can ratify, then there will be a strike," said Finn, who is one of the union's negotiators.

Ralphs officials have said they plan to hire replacement workers if employees strike.

There are 20 bargaining sessions scheduled between Sept. 3 and Oct. 5.

Wal-Mart threat

The grocers' proposed cuts come at a time when Wal-Mart Stores Inc. plans to build 40 super centers with large grocery components throughout the state within the next four years.

Grocery store chains said they need the pay and benefit concessions to remain competitive. Of particular focus have been possible employee contributions for health and pension benefits, which management has not yet outlined.

So far, the union's seven locals in Southern California have kept a unified front in resisting the cutbacks. But Local 770, which covers most of Los Angeles County, has notified the other locals it could break away if they cave in to the grocers' demands.

"At this point, we're all bargaining together," Finn said. "But we don't want our destiny to be controlled by the other locals if they want to compromise on an issue."

The UFCW's regional base also includes locals 135 in San Diego, 324 in Orange County, 1036 covering Ventura, Santa Barbara and San Luis Obispo counties, 1167 in the Inland Empire, 1428 in Pomona and Claremont and 1442 covering L.A.'s beach communities.

Under the current agreement, employers pay 100 percent of all health benefits (at an average cost of nearly $7,900 annually), with workers only responsible for co-pays of $3 for a generic-brand prescription drug and $6 for a name brand.

In addition, retiring workers receive generous pensions, which can total more than $30,000 annually, plus a one-time payment of $30,000 to $40,000 for longtime workers.

To secure those benefits, the union has traditionally accepted moderate wages, which currently max out at $7.40 per hour for food bagger and $19.18 an hour for meat cutters.

Although union officials have put no specific pay increase on the table, they previously said they might ask for a 50 cent-per-hour hike.

The UFCW also wants part- and full-time employees with seniority to get preference in choosing the hours they are scheduled to work and for part-time employees with seniority to be granted first choice of additional hours if desired.

Strategy's risk

Labor experts said Local 770's aggressive stance could serve as a catalyst for striking a better deal for all the locals. But it could also backfire if members of the other locals revolt against their leaders and the union's solidarity unravels.

"That puts the union in a difficult position because it makes the union leadership look bad," said Sanford Jacoby, professor of industrial relations at the UCLA Anderson Graduate School of Management. "How come they didn't negotiate something like this on behalf of the union membership in the first place?"

Often, management singles out one local to bargain with, in hopes of forcing the other locals into line. The process is known as "whipsawing."

The Southern California chapters of the UCFW have not staged a strike since they walked off their jobs for five days in 1978.

This time, both sides must deal with the Wal-Mart invasion.

Its super centers will be 200,000-220,000 square feet each with at least one-third of the space dedicated to food sales. That's much larger than area chain grocery stores, which range from 20,000 to 60,000 square feet.

Wal-Mart employees, most of whom do not receive any employer-paid benefits, are paid an average of $7.50 per hour, while grocery store workers (both unionized and non-unionized) make an average $8.71 per hour, union officials said.

Wal-Mart officials have repeatedly brushed aside assertions that their stores put the grocery chains at a competitive disadvantage, citing the fact that grocery chains remain profitable near super centers in other parts of the country.

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