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Union, Stores Reach a Deal to End Strike

The rank and file, out since October, will vote this weekend. A two-tier system for wages and health benefits appears to be central to the contract.

February 27, 2004|James F. Peltz, Melinda Fulmer and Ronald D. White | Times Staff Writers

Negotiators reached a deal Thursday night that could end the California supermarket strike and lockout, a bitter fight that highlighted the national debate over how much companies should pay for workers' healthcare coverage.

After 16 straight days of bargaining, the deal was struck in a conference room at a hotel in Orange County. Neither side would provide details.

People close to the talks said the supermarkets scored victories in their bid to cut labor costs and curtail spending on health benefits -- in large part through a two-tier system under which new hires would earn less per hour and receive skimpier health benefits than veterans -- but the United Food and Commercial Workers Union said the proposed contract "preserves affordable healthcare" and job security for its members.

Pickets won't immediately drop their signs and return to their old jobs. The pact must be ratified by the tens of thousands of UFCW members who until last October had worked at 852 Vons, Pavilions, Ralphs and Albertsons stores in Central and Southern California.

The voting is scheduled for Saturday and Sunday, and the results probably will be tallied by Sunday night, according to the joint statement by the seven UFCW locals in the dispute.

UFCW leaders have agreed to recommend that the contract be ratified, and approval is expected, the supermarkets said in a joint statement. As the word swiftly spread on picket lines, members, living on strike pay for nearly five months, indicated they were ready to do just that.

"I'm ready to go back to work, bro, and start serving the public again," said Raoul Benitez, a grocery clerk supervisor who was walking the line at a Vons on Lincoln Boulevard in Santa Monica.

But Benitez, who hadn't seen the proposed contract and hadn't been officially briefed about it, said he wouldn't be so happy if he discovered the UFCW had accepted an accord that would seriously reduce his benefits.

"It will bother me a lot," he said. "It will mean that we've been out here almost five months for nothing."

A statement issued Thursday night by the California Labor Federation and the AFL-CIO didn't describe the proposed contract but said the "long and difficult" grocery dispute "gave a strong message to corporations: Any effort to dismantle affordable healthcare will face determined opposition."

People familiar with the tentative contract said it showed that the union bargained hard to protect members on the picket lines, though at the expense of future members. Current members probably wouldn't have to make regular contributions to help pay for their healthcare coverage for at least two years, as the union had feared, the sources said.

The supermarkets agreed to add millions of dollars to the healthcare fund's reserves, they said. But in a victory for the supermarket companies' bid to stem rising healthcare costs, their regular per-employee contributions to the healthcare program would be capped at a set dollar limit, the sources added.

They said current workers would not get raises over the three years of the contract. But employees would get two lump-sum payments, the sources said.

This round of negotiations began Feb. 11. At the table were federal mediator Peter J. Hurtgen and representatives of the UFCW, Albertsons Inc., Kroger Co., which owns Ralphs, and Safeway Inc., the parent of Vons and Pavilions.

In their statement, the supermarkets said they were "very pleased to have reached this agreement and at the prospect of seeing our employees return to work." They said the proposed deal "squarely addresses the challenging healthcare costs and competitive issues we face."

Hurtgen, calling it "one of the most difficult negotiations of my career," declined to discuss the tentative pact. In a statement, he praised all the parties and said that "both sides had to face up to some hard choices and find a way to compromise but still achieve their essential goals."

If ratified, the contract will cover the union members who went on strike or were locked out and the 11,000 people who work for regional chains, such as Stater Bros., that weren't involved. Tens of thousands of replacement workers hired by Vons, Pavilions, Ralphs and Albertsons would lose their jobs.

Experts debated whether either side came away with a solid victory. But consumers would be winners.

"What we are anticipating is a price war of unprecedented proportions starting next month," as stores hustle to woo shoppers who have shunned stores with picket lines, said Burt Flickinger III, director of Strategic Resource Group in New York. And Stater Bros. and other regional markets that have enjoyed a strike-spurred windfall of business also probably would cut prices to retain the customers they've gained.

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