Workers facing lockout now locked in; workers still negotiating are empowered
by Richard Myers
Colorado's grocery chains have engaged in concession bargaining for several contracts in a row.
On December 14th, Colorado grocery workers voted on a "last, best, and final" contract offer from King Soopers and Safeway that gave little that was new, and demanded some very significant concessions.
A newly remodeled King Soopers store north of Denver. Grocery corporations have used the savings from lowered wage rates and decreased benefits in previous contracts to remodel stores, and to build new stores.
Each remodeled store is estimated to cost six to eight million dollars, and many workers are resentful that company profits go to purchase bricks, rather than to reward the workers who make the profits possible.
The corporations both hoped and propagandized that this offer was to mark the end of their negotiations. But just as the corporations' earlier "final" offers weren't really final, some older workers clearly understood that corporate spin doesn't necessarily dictate the end of the process.
Workers Split Their Votes
Other workers may learn this lesson through experience. In spite of strong and pervasive recommendations to the contrary by Colorado's UFCW Local 7, workers at King Soopers (division of Kroger) and their sibling subsidiary, City Market, accepted the latest offer. By doing so, these workers have locked themselves in to a new three tier wage system, absorbed very significant pension cuts and have given up a variety of pension fund-related benefits. These include death benefits; supplemental benefits; early retirement; and, controversially, disability benefits. According to the new contract's provisions, most workers in the stores (who have not seen a raise in a number of years) will get no raise from this new contract. Indeed, entry level new hires (called courtesy clerks) will start at absolute minimum wage, and (absent a promotion) will never see a wage increase, no matter how long they hold their position with the company.
Safeway workers rejected a nearly identical contract offer by a substantial margin.
Background
After a challenging and eventful eight months of negotiations, some observers have conjectured that, concerned with competitive advantage, Safeway's position will harden, and Safeway workers will now be forced to accept similar terms. But in my view Safeway (which took the lead in the past eight months of negotiations) has demonstrated excessive greed and stubbornness throughout. And now Safeway management seems to be alarmed about the next round of negotiations, where an opposite result is at least as likely if Safeway workers are allowed to exercise a newly-realized strength.
During the 1996 contract talks, King Soopers workers elected to strike, while the union sought to allow Safeway workers to continue working. Safeway exercised the provisions of a behind-the-scenes agreement with King Soopers, such that when the strike at King Soopers was announced, Safeway locked out their union workforce. Fierce competitors in the marketplace, the grocery chains nonetheless cooperated with each other in presenting a united front against their workers' demands for improved wages and benefits.
What is the primary benefit to locking out the majority of Colorado's unionized grocery workers? Strikers who walk the picket line receive strike pay from the UFCW Local's strike fund. With a majority of union members forced to the picket line, the Local's strike fund is more quickly depleted, forcing the union to expend resources at an unsustainable rate. The UFCW International contributes to strike pay, but Local 7 carries the greater burden.
In 2009 negotiations, the corporations have repeatedly trumpeted a similar strike/lockout plan. This time Safeway workers have taken the lead with the option to strike, and it is King Soopers workers who have been threatened with a lockout.
(In a future article I plan to explore the psychology of the lockout, and the reasons that King Soopers workers accepted a severely concessionary contract. For now, let us examine the prevailing situation.)
With King Soopers under contractual obligation, there is no longer any threat of a lockout. Indeed, the UFCW Local 7 strike fund can be re-purposed toward a more focused action, the very action that had been the Local's goal in the first place. King Soopers workers (who may eventually benefit from successful Safeway negotiations in their own future contract talks) will continue to work and pay union dues, helping to replenish the strike fund.
Safeway corporate undoubtedly understands this, and that may explain why store managers who embrace and identify with the corporation's financial aspirations have expressed frustration and exasperation to UFCW deputy secretaries who visit their stores. Safeway will be no less obstinate than they have been throughout negotiations, but because of the split vote Safeway now stands alone, and is in a significant bind.
Assessing The Impact Of The Split Vote
On January 1, UFCW Local 7 will have new leadership, and perhaps, new policies or tactics. Issues such as the advisability and timing of negotiations and possible new job actions will require a careful review. But workers who have voted repeatedly to reject concessionary contract offers are likely to find value in continuity and continued engagement. And these workers participate in the election of their local leadership, so they have the authority of their democratic actions.
It makes sense, then, to explore new negotiating possibilities that arise from the split vote.
King Soopers is no doubt relieved to be out of the fight. While both corporations have benefited from the recession and are profitable, Safeway has roughly half of King's market share, and now confronts the possibility of a strike in which many shoppers will flock to their larger competitor. A thriving King Soopers may be expected to hire additional workers, thereby increasing the dues income (and therefore the strike fund) of the Local during any strike action. A supportive Executive Board (comprised of mostly new members in January of 2010) may even feel justified in examining the conservative level of strike pay set by their predecessors, possibly increasing it to support Safeway workers' ability to sustain a strike.
Safeway's argument for settlement will be: King Soopers workers accepted, and now it is time for Safeway workers to follow suit. Any loss of market share is potentially devastating, and therefore a strike must be avoided at all costs.
Ironically, with King Soopers workers no longer facing a lockout, Safeway workers will be able to make the same argument back to the company.
In my view Safeway workers will now have the more compelling argument because, with a more efficacious strike fund, they will have a greater ability to back up their demands. Safeway may conclude that its best interest lies in putting this dispute behind as quickly as possible, even at the cost of meeting the Safeway workers' demands against concessions. Safeway workers must merely stick together, maintain the patience that they have demonstrated throughout negotiations, and reject any contract offer that fails to live up to their hopes and expectations.
My heart goes out to the many hundreds of King Soopers workers i have conversed with over the past six months, many of whom no doubt recognize the dire consequences of accepting the concessionary contract offer. I sincerely hope that their ordeal lasts no longer than the life of the contract they've accepted, and that they will be in a position to gain back some of what they've lost in a little over four years. An early move in that direction at Safeway would certainly bode well for the future.
Richard Myers is a deputy secretary for UFCW Local 7. A deputy secretary is responsible for communicating with, informing, and helping to educate grocery workers in the stores concerning contract-related issues.
The writer is not a spokesperson for the union, and the views expressed here are his alone.