The Explainer: The Raley’s/Nob Hill Foods strike

The Explainer: The Raley’s/Nob Hill Foods strike

Michele Ellson

Workers at Raley’s, Bel Air and Nob Hill Foods stores across Northern California – including the Nob Hill Foods in Alameda – went on strike on November 4 after 15 contentious months of negotiations ended with Raley’s imposing a final contract offer it gave to the United Food and Grocery Workers union for its consideration four weeks earlier. Management and the union are back at the bargaining table, but the strike continues. Here’s what it’s all about.

Why did the stores’ workers go on strike? Grocery workers are concerned about contract terms to be implemented in January that would move them out of their existing health plan – which is jointly run by the grocery union and managers of Safeway, Raley’s/Nob Hill and Lucky/Save Mart, Northern California’s biggest unionized grocery chains – and into a new one run by the company. A union rep said the changes could mean fewer benefits and less control for workers, though the company’s spokesman says it’s a better plan. As part of the benefits change, Raley’s will also eliminate health care coverage for the grocery chain’s retired workers 65 and older (the age, the company points out, that they would qualify for Medicare). All told, some 8,000 active employees and retirees are covered under the current benefit plan.

What was in the offer Raley’s management proposed? Raley’s spokesman John Segale did not provide a copy of the contract offer imposed on workers despite a pair of requests for it, but a document he did provide listed terms that included a two-year wage freeze and elimination of Sunday and holiday premium pay and “no strike” language for some workers, which have gone into effect; the company had already imposed similar terms on other employees and at its non-union stores. The document also listed the health plan changes as part of the company’s final contract offer, which would go into effect at the beginning of 2013 according to a separate “fact check” document offered by the company.

Why is Raley’s management proposing the change? Segale said the Sacramento-based grocery chain’s management needs to cut benefits and freeze pay in order to remain competitive with 240 new nonunion outlets selling grocery items, including Target and Walmart. He said other Raley’s employees not represented by UFCW aren’t in the joint management-union benefit plan and that the plan they’re imposing on workers represented by UFCW is better than the one in place for the grocery chain’s store directors and corporate office. UFCW Local 5 communications director Mike Henneberry said the family-owned company failed to fully open its books for union leaders to demonstrate the financial need to make the cuts; Segale didn’t deny the claim when asked about it. (Safeway is a public company, and Henneberry said Lucky/Save Mart opened its books to the union’s reps.) We asked Segale in an e-mail Monday what financial conditions prompted the proposal and what savings the company would see if the changes were put in place but haven't yet received a response.

Are other grocery chains making similar requests of their workers? Contracts talks between UFCW and management at Safeway, Lucky/Save Mart and Raley’s kicked off last fall, and managers at all three grocery chains reportedly sought similar concessions from workers in order to compete with new, nonunion stores. Management at Lucky/Save Mart had originally sought to eliminate retiree medical benefits but ultimately backed off of that proposal, and union bosses signed off on a contract and “stabilization” plan in September that trimmed pay and for the first time required employee to contribute toward their health care premiums. The union and Safeway reached a tentative agreement last week that also maintained union workers’ existing health benefits. Segale said in a statement that Raley’s managers – who are upset the union didn’t send the grocery chain’s offer to its rank-and-file for a vote – “need to reduce our operating costs. We are committed to achieving these reductions and changes to the contract which we need to survive.”

How long will the strike continue? Henneberry said the picket lines will come down when an agreement has been reached. “We are hoping for the best out of these talks but are prepared for any eventuality,” he said. Segale, the Raley’s rep, said the company is committed to reaching an agreement “that is fair and equitable to both parties.”

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