By Alex Veiga
Associated Press
July 23, 2007
Workers at three major Southern California supermarket chains overwhelmingly approved a new contract that provides their first raise in five years and rolls back key wage and benefit concessions made after a 141-day strike-lockout in 2004, union officials said Monday.
The deal was ratified by more than 87 percent of the workers who voted during the weekend, according to the United Food and Commercial Workers union.
More than half of the 65,000 workers at nearly 800 stores cast ballots, said Sandra Lloyd-Jones, a UFCW spokeswoman.
"We stood up to the employers and we demanded a fair contract and we got one," said Sharlette Villacorta, an Albertsons employee in the Los Angeles neighborhood of Los Feliz.
"Three years ago, we were starved into an unfair contract, and I believe we did negotiate a fair contract on our own terms," Villacorta said.
The companies said the agreement would allow them to remain competitive in Southern California.
Negotiations had dragged on for more than six months and threatened to result in a repeat of the standoff that some analysts estimate cost Supervalu Inc. (nyse: SVU - news - people )'s Albertsons, Kroger Co. (nyse: KR - news - people )'s Ralphs and Safeway Inc. (nyse: SWY - news - people )'s Vons and Pavilions as much as $2 billion in losses.
"This new agreement provides employees with the best wages, benefits and working conditions in the Southern California retail market, while making certain Vons has the tools to thrive in a highly competitive environment," Steve Burd, CEO of Safeway, said in a statement.
During the talks, the union sought to eliminate concessions made during the previous labor dispute.
Chief among them was a system that capped wages for new hires below that of established employees and also set waiting periods of a year or more for new employees to qualify for health coverage.
The new contract eliminates the tiered structure, making it possible for all workers to reach the same wage and benefit level for their job classification.
The contract also shortens the waiting period for health insurance coverage for new hires and their children to six months, from as long as 30 months.
However, new workers must wait more than five years to become eligible for the top-tier health care benefit package.
In addition, grocery workers will receive a wage increase retroactive to March 5, when the previous contract expired. Most workers can expect a $1.65 an hour raise during the course of the contract.
For workers, the deal is an improvement over the last contract, said Daniel J.B. Mitchell, professor of management and public policy at the University of California, Los Angeles.
"They made gains they didn't have under their old contract, so in that sense, the union got something," Mitchell said. "But the management side got some things out of it, too."
The latest contract agreement clears the way for labor talks to continue between the Food4Less supermarket chain and its roughly 15,000 employees in Southern California.
Elsewhere, labor contracts covering about 25,000 grocery workers are due to expire in the Sacramento and Fresno areas in October. Contracts for roughly 30,000 grocery workers in the San Francisco Bay area end in December.
Mitchell said he doesn't see the Southern California contract setting a precedent for the upcoming talks.
Rather, he sees it as the latest in a series of labor deals in which employers have taken back the two-tiered approach and emphasized better health care benefits.
The Southern California deal also calls for the union to pay $3,000 per employee from its health care trust fund to help pay for the workers' health plan.
The union contribution amounts to $240 million, or 48 percent, of the health plan's funding, the union said.
The plan also includes the option for health care reimbursement accounts and a focus on preventative health.
