Yes, Yogi, it is "like deja vu all over again."
Today is February 26 and in eight days (March 5), the current labor contract between 59,000 grocery store employees represented by the United Food and Commercial Workers (UFCW) union and Albertsons, Ralphs and Vons/Pavilions will expire.
Three years ago, the negotiations between the parties went nowhere. An eventual lockout and strike resulted in lost wages for striking and locked out employees; lost revenues for the chains; and a windfall for companies such as Stater Bros. (itself a union shop) and Trader Joe's (not).
Ultimately, things turned out even worse for Ralphs, which wound up having to set up a $50 million restitution fund and pay $20 million in fines after being found guilty of secretly rehiring hundreds of locked-out workers using false Social Security numbers and names. The company was put on three years probation, as well.
Recently, both Stater Bros. and Gelson's have arrived independently at deals with the UFCW. The two chains represent about 15 percent of the grocery market in Southern California. What makes the deals signed by Stater Bros. and Gelson's so significant is the elimination of the two-tier wage and benefits structure that was heralded by the other chains as a key achievement in the current contract.
Those who have found fault with the system contend it has driven up the already high turnover that stores have to deal with.
The San Diego Union-Tribune cited Larree Renda, executive vice president and chief strategist and administrative officer for Safeway, as describing turnover before the strike as being close to nonexistent.
Today, said Ms. Renda, "It is not the highest. It's not lowest."
Adena Tessler, of the Rogers Group, a public relations firm hired by the three major chains to speak about the contract talks, said, "Like all retail, we have high turnover at the entry level. However, because of the quality benefits, leadership training and career opportunities, our overall employee retention is far greater than the overall retail industry."
According to the UFCW, turnover is way up at the chains since the lockout and strike. Only 23 percent of clerks and 15 percent of clerk helpers remain on the job within the first year of being hired, according to the union.
Neither the chains nor the union expect that a deal will be completed by March 5.
Greg Conger, president of UFCW Local 324 in Buena Park, said that so far the union has only had a couple of days negotiating with Albertsons. "There's still a lot of issues," he told the Orange County Register. "By this time next week, we had better be in some pretty hard, brutal negotiations so we can finish this off before this contract expires."
Both sides, as would be expected, blame the other for the lack of progress.
Pete Van Helden, president of the retail west region for Supervalu, the parent company of Albertsons, said the date should not be made into a major issue. "It's very common that negotiations go beyond contract expiration dates," he said. "We could agree to have a contract extension. Frankly, it's looking like that's what will happen here as we approach that contract expiration date."
Mr. Conger said the union might be amenable to that if it appeared as though progress could be made on eliminating the two-tier system.
"If the employers dig in their heels on two-tier, then we'll ask them to give us a final proposal and take it to the members for a vote," he said.
Steve Burd, chairman, CEO and president of Safeway, said one of the biggest issues complicating the road to getting a deal done was the UFCW's refusal to negotiate with the three chains collectively. In response, the Los Angeles Times has reported, the chains have refused to negotiate with the seven UFCW locals representing the grocery workers.
Burd talked about the negotiations in a Thursday conference call about the company's earnings. He reported that Safeway's fourth-quarter profit surged 77 percent to $308 million, its best performance in recent years.
He called this round of talks "a slow process" that has been complicated by the UFCW refusing to bargain with the employers as a group.
In response, the employers have refused to negotiate with all seven UFCW locals in the region as a group, which has created 27 separate sets of negotiations.
Discussion Questions: Has the two-tier wage and benefits system been a success or failure since it was implemented after the lockout and strike? Can the big three chains "afford" to have their workers feel as though they lost again in this round of negotiations when a new contract is signed, sealed and delivered?
- Going Through the Checkout Line - San Diego Union-Tribune
- Grocery talks make little progress - Orange County Register
- Grocery talks see little progress - Los Angeles Times