Merger Creates Stronger Union
Next year, the United Food and Commercial Workers believe they will go into negotiations with northern California retailers holding a much stronger hand than they did in 2004.
The reason for their confidence is that the union has gotten much larger after seven locals merged to create a mega local representing 26,000 grocery workers.
Mike Henneberry, communications director for Local 5, told the East Bay Business Times, “We can’t take on these large nationwide companies in contract negotiations with
small locals in Alameda County, Santa Clara County and other areas. We need to be bigger ourselves. What happened in Southern California was a bloodbath.”
Richard Benson, secretary-treasurer of Local 5, said, “Any organization needs to examine the way it does business. It makes a lot of sense to be as lean as it can be and to consolidate
efforts. The merger will give us a stronger voice at the bargaining table and greater ability to recruit new members.”
Paul Staudohar, professor emeritus in industrial relations at Cal State East Bay, said a larger union will benefit it when it comes to hammering out a contract.
“The consolidation of locals should give them more muscle at the bargaining table,” he said. “In this industry, unlike others, bargaining is handled locally. Maybe the union
feels it should be more on a regional basis. There’s no question in the event of a strike, there would be more employees out in a larger area, putting more pressure on employers.”
Prof. Staudohar isn’t looking for negotiations between the unions and supermarket chains operating in northern California (Sacramento Valley contract runs out in Sept., Bay Area
in Dec.) to turn hostile. He said he has been impressed with the professional nature of the negotiators on both sides of the table.
Aside from the lockout/strike in southern California in 2003/2004, “The retail grocery industry has been on the leading edge of good labor relations. I don’t think this merger
signals a more militant stance on the union’s part. For economies of scale and greater power, it makes sense for them.”
Discussion Questions: What will a larger UFCW mean for labor negotiations in northern California? What effect will the merger of the seven locals in
northern California have on UFCW operations elsewhere in the country?
The UFCW merger is just the first step by the union in acknowledging market changes that most businesses began to adjust to five or ten years ago.
Only time will tell how this plays out, but I wouldn’t count out the effectiveness of any organization that has faced extreme adversity and decided that it’s time to change.
In creating a larger and stronger union, just as in football where a bigger and stronger tackles makes it harder to run against, the UFCW could also initiate oppositions’ plans to create new opportunities to get around those larger tackles. That could invite invasion into their territory by aggressive non-union, low-cost operators such as Wal-Mart. To sustain its value, a larger union must create a realm greater than size alone.
The UFCW merger will not solve the major issue: the union hasn’t successfully organized the nonunion supermarkets. Until a Wal-Mart, Target, Trader Joe’s, or Sam’s Club gets unionized, legacy union employers are disadvantaged. When you’re on the disadvantaged side, you’re not on the winning side. You’re on the side whose employers will decline, who membership will fall, and whose compensation will be compromised. The union supermarkets and the UFCW could make an enlightened deal: compensation rises as the number of union locations rises. It’s easier for the employers to pay union people more if more employers are unionized. Otherwise, the nonunion players will grow and the union players decline. Look at autos and airlines. The supermarket business is in the same club.
I think this will affect the union the same as when a retailer merges and becomes larger. There’ll be officials who don’t understand local markets and politics, poor morale, and weaker execution. The retailers might get the upper hand while a larger union goes through growing pains and a learning curve. Wal-Mart is probably throwing some high-fives right now.
The UFCW is facing reality. It seems inevitable that they stand to lose more than 15% of their membership in the next 5-6 years with the low cost operators continuing to advance in their midst.
They have tried to organize the low cost operators without success. W-M recently had all the employees of one store walk out in Florida over a new/revised absenteeism policy. Surely 200 or more employees were involved and, yet, the UFCW couldn’t get 50% plus one to sign cards to hold an election?
Perhaps their only salvation is getting a majority of cards signed and getting to forgo the balloting. The change in Washington will be seriously looking at changing the way NLRB elections are run.
In the end, size doesn’t matter if they can not organize the low cost operators and, so far, they haven’t. The grocery companies are going to hard bargaining, too. Rising healthcare costs and declining sales mean less jobs.