President's Report

How Local 99’s negotiators prevailed against employers’ demands for cuts

By March 9, 2021No Comments

The enthusiastic contract ratification vote by our members at Fry’s, Safeway and Smith’s stores successfully concluded several long, tough months of intense negotiations with the employers.

We provide highlights of this agreement on page 4 in this edition of 99Report. For this column, let’s delve into how we managed to secure a strong contract in spite of strong resistance by the grocery companies.

How we did it

2020 was a strange year for contract negotiations, I told our members in a Telephonic Town Hall on Oct. 7, not long after the bargaining began.

There were a lot of things going on this year that none of us ever considered. For one thing, we were negotiating online via Zoom instead of sitting across from each other at a conference table. This made it difficult to conduct negotiations as they are normally done, with occasional informal side discussions in a hallway or hotel lobby helping to move the process along.

To overcome this challenge, the parties met virtually in special sessions where we could talk informally and work out details that couldn’t be addressed sufficiently in a formal setting.

Proposals and counter-proposals

To begin the talks, our Local 99 team presented to the employers a list of “non-economic” proposals. Of course, “non-economic” is an inexact term for proposals that deal with sick leave, holiday pay, Sunday hours, premium pay, vacations, breaks and more that do cost money, but that’s the terminology that is used in these settings.

The negotiators on the employers’ side followed by submitting their “non-economic” proposals and the two sides continued to present counter-offers as the negotiations moved along.

Meanwhile, union members were invited to log into the member portal at ufcw99.com so they could see our proposals in detail.

As things slowly went forward, we presented wage proposals that reflected increases in the minimum wage for starting workers as well as the need to push rates upward accordingly at each wage step for experienced members.

We also addressed health and pension benefits. While the union’s health trust fund was and continues to be strong, the health plan had to be updated to address possible long-term effects of COVID-19 illness among the members.

The pension fund remained the same. However, we recognized that volatility in the financial markets could change the situation in the future.

Employers’ outrageous plan

By the end of October, it was clear that the employers were doubling down on their plan to degrade our contract.

This plan included devastating cuts that would have eliminated health care for half of the workforce.

Specifically, the employers wanted to increase the number of hours employees would be required to work before qualifying for premium benefits. A single employee would have to average 28 hours a week over the course of the previous year, while an employee with a child would require 30 hours and an employee who wants to cover his or her family would require 38 hours.

Missing just one week of work throughout the entire year would mean missing out on that level of benefits for the following year.

The employers’ proposals also would have totally eliminated the Partnership health care plan, which covers almost 60 percent of the Plan A participants in our union stores. This plan has successfully encouraged disease management practices and healthy lifestyle choices that have resulted in significant savings for the trust fund that pays for health care.

These proposals weren’t simply a bargaining tactic to win concessions from us. We have seen similar proposals become implemented in contracts in other parts of the country.

It was hard to believe that, in the middle of a global pandemic, they wanted to take health care from half the people in the stores, but that was the reality we had to confront.

We told them we’re not interested in their cuts. We never wavered from that position.

 

Union proposes rewards for workers

Meanwhile, the union’s economic proposals would reward members for their frontline service in a time of national crisis. Union proposals included reinstating the $2 per hour “hero pay” that was paid to members during the initial months of the COVID-19 pandemic. This pay would be given retroactively from July and continue until the end of the pandemic.

The union proposals also included a 75-cent hourly wage increase over three years, a new pay scale reflecting increases in the minimum wage, and increased premiums paid for different jobs.

Additionally, Local 99 proposed spousal coverage immediately upon an employee becoming qualified for care, as well as improvements in vision and dental coverage.

 

‘Essential Workers’ ad campaign

 

By the time negotiations resumed near the end of November, the employers were beginning to feel the effects of an advertising campaign that Local 99 had launched across Arizona. Through videos and ads in newspapers and on social media outlets, we informed the public of supermarket workers’ role as “Essential Workers: Now and Forever.”

These efforts bolstered the widespread sympathy our members already enjoyed among the public at large. The companies knew full well that a labor action on our part, should one become necessary, would have the public’s support as well.

In the meantime, we sent updates on the negotiations to the membership through editions of 99Report Extra and conducted Telephonic Town Halls with increasing frequency. We also asked our Negotiations Advisory Committee members to speak with their coworkers about the necessity of staying strong and united through the course of negotiations.

A sober assessment

On Nov. 25, I shared with the members a sobering update on our contract negotiations with Fry’s, Safeway and Smith’s.

Noting that the next four to six weeks would be extremely busy in the stores, I asked the members to be extra diligent at work and at home during a time when thousands of COVID infections were being reported in Arizona.

Meanwhile, we decided it would be best to expand on our “off the record” discussions with the employers’ representatives. These discussions allowed us to be frank about their proposals and share our own ideas for reaching an agreement that would reflect our members’ needs.

We were hopeful, but unfortunately the employers kept going back to places where we were just not able to go.

At this time, the employers were offering a top rate only increase of 25 cents per hour, with no changes proposed for progressions. With coming minimum wage increases, there would be no equivalent raise hikes for experienced members.

The employers also showed no willingness to reinstate hazard/appreciation pay while the stores were full of customers, they were running out of product on the shelves, and COVID numbers were higher than they had ever been.

Still far apart

In a Telephonic Town Hall on Dec. 15 — during the most devastating spike of infections in the history of the nation’s worst health emergency in more than a century — I informed our members of the companies’ continuing refusal to fairly compensate those who risk their lives to serve their employers.

“Our official proposals are so far apart in regard to wages, health and welfare, and contract language we’re not even in the same contract space,” I said.

“We’re proposing a 75-cents-an-hour increase and they’re proposing 25 cents and nothing on hazard pay,” I continued. “We proposed small improvements on health and welfare, and they proposed to take money out of the benefits plan, put more than half of our people out of the plan and require premiums that are triple of what they’re paying now.”

Agreement reached

By January, the employers finally started coming around, and on Jan. 13 I announced during a Telephonic Town Hall that UFCW Local 99 had reached a tentative contract agreement with Fry’s, Smith’s and Safeway in Arizona.

“We’re still going through the Memorandum of Understanding with the employers, dotting the ‘i’s and crossing the ‘t’s so we can ensure nothing is missed,” I told the members, “and we will likely be scheduling ratification meetings next week.”

While details of the settlement were yet to be released, I did say that as the minimum wage goes up, each progression step for experienced members will increase until they reach the top rate. In some cases, the top rate would be $1.50 or more above the last apprentice step.

The ratification process would be conducted electronically to protect members during the current spike in COVID-19 infections.

“This tentative contract agreement is a testament to the solidarity and commitment of the people on this call and all of our members who continue to stand strong with this union,” I said.

“I’m proud of the contract we’ll be bringing to you to ratify next week. I am even more proud of Local 99 members for sticking with the union and this long negotiations process.”

Sharing the details

During my concluding Telephone Town Hall on Jan. 25, I reported to Local 99 members on the highlights of their freshly negotiated tentative contract with Fry’s, Safeway and Smith’s.

“We will begin ratifying the contract tonight, and members will be able to ratify the contract for the next 53 hours,” I said.

All members in the bargaining unit received a link to the Memorandum of Agreement and other documents explaining the tentative contract’s highlights and the employers’ defeated proposals, along with a video from the president and instructions on how to vote.

While our union negotiators were not able to nail down hazard pay in the contract, the employers’ position reflected corporate decisions that applied across entire chains throughout the country. In response, we will continue to push hazard pay on the national level with the employers.

Also, President Biden, as part of his American Rescue Plan, has said he wants to spend millions to help essential workers who are affected by the pandemic, and he specifically mentioned grocery workers at the top of the list.

‘A fantastic job’

“You did a fantastic job and this is a contract to be proud of,” I told the members. “The increases in this contract are unheard of. No increases in premiums is unheard of. We have vacation and holiday improvements.

“All these things and more are representative of the good work our members are doing. Thank you for remaining strong and united throughout this challenging negotiation process.”

Highlights Of The New Supermarket Contracts

Wage increases

Journeyman supermarket workers receive wage increases of 45 cents an hour retroactive to Jan. 3, followed by two additional 50-cent increases by Jan. 1, 2023. That’s $1.45 over two years, which is really unheard of. For a full-time journeyman, this means almost $3,000 a year more in wages — a substantial increase.

These increases create a margin between the pay rates of experienced members and those of new employees who are benefiting from increases in the minimum wage. While we weren’t able to change the wage separation between Phoenix and outlying areas, we were able to make sure there’s no growth in that separation.

Health benefits

The one-year waiting period for spousal health coverage is eliminated in the new contract. Spouses now will begin immediately upon employee coverage.

Also, the dental and vision plans will allow carryover of benefits from one year to the next. For example, if you don’t get eyeglass frames one year, a portion of that benefit will roll over to the next year.

When we negotiated the current contract in 2016, we expected to have one month of reserves at the end of the contract. Instead, we have grown our reserves to over 12 months, which is a good and bad problem to have. We were able to make improvements, but it’s bad because overfunding can be an issue. As a result, we’re suspending employer contributions for six months and also changing the Partnership Plan.

Those members in the Plan A Partnership Plan will see no change. If you’re not in Plan A and you want to be, you’ll have to get in this year to maintain those benefits.

Sick leave

The agreement includes first-day sick leave, which is hugely important, and no doctor’s note is required until the third consecutive day of absence. Also, absences due to domestic violence, stalking or sexual violence are covered under sick-day language.

Vacations and holidays

Those hired after 2004 now qualify for three weeks of vacation after five years of employment, which puts them in line with vacation language for those hired before 2004. Plus, we now get Labor Day off effective in  2022-2023.

Defeated proposals by employers

While we were able to make improvements in the categories described above, at the same time we defeated several proposals from the employers that would have undermined the contract.

These defeated proposals included:

  • A proposed raise of only 25 cents for top-rate employees.
  • No increase for pay progressions.
  • Gutting the health and welfare fund, making it much more difficult for employees to earn health care. A single employee would have had to work 28 hours a week for a whole year to be eligible and an employee would have had to work 30 hours a week to cover his or her children. An employee would have had to work 38 hours a week over a year to cover a spouse.
  • Health care premiums would have tripled over the next three years.
  • The employers wanted to eliminate Partnership Plan A.
  • Safeway wanted to force people to work on Christmas.
  • The employers wanted to limit the union’s ability to talk to new employees.

We all can thank the Negotiations Advisory Committee and the membership for their roles in defeating these terrible proposals. If our members hadn’t been as vocal in the stores, the employers would not have backed off.