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Grocery strike averted as chains, union reach accord

Workers are expected to ratify the tentative four-year agreement.

July 18, 2007|Jerry Hirsch | Times Staff Writer

Fears of a supermarket strike this summer in Southern and Central California evaporated Tuesday when the region's largest grocery chains and the union representing 65,000 store employees reached a tentative agreement on a new four-year contract.

The accord would make up some of the ground the United Food and Commercial Workers union lost in a bitter, lengthy walkout and lockout 3 1/2 years ago.

"We have recovered a lot without a strike," said Rick Icaza, president of UFCW Local 770 in Los Angeles. "I think our members will overwhelmingly accept this. The wage increase and improvement in health plan benefits are significant."

Management representatives confirmed that an accord had been reached but declined to comment on it.

The contract, which still must be ratified by union members at 785 Albertsons, Ralphs and Vons stores in votes Sunday, came together in nine straight days of bargaining that often extended into early morning hours.

A spokesman for the union said its leaders would recommend that members accept the contract.

The deal would ensure labor peace for grocery stores from San Diego to Bakersfield and enable the big supermarket chains to focus on threats from a giant British grocer planning to enter the lucrative Southern California market and from smaller, mostly nonunion competitors looking to grow in the region.

Labor analysts said the proposed contract looked like a win for the UFCW, which was considered to have lost the 141-day work stoppage in 2003-04.

That dispute drove about half of the union's members out of the grocery business and created a divided workforce. The 33,000 workers hired in the last three years, who account for about half of store employees, receive less in wages and benefits than veteran workers.

"It looks like the companies pulled back and are taking a step away from the low-wage, low-benefit and high-turnover direction they were headed in," said Ken Jacobs, chairman of the UC Berkeley Center for Labor Research and Education.

Neither side would disclose terms of the accord reached Tuesday. But people familiar with the pact said it would give workers their first scheduled raises since 2002. It also would raise the top wage rate and make all employees -- not just veterans -- eligible to reach it.

The contract would slash the amount of time newer workers would have to wait to get health insurance to six months from as long as 18 months, the sources said. The health-insurance waiting period for children of newer workers would shrink to six months from 30 months.

Union members were happy to learn that a strike had been averted.

"I am a single mother with a teenage son at home and a daughter in college. I could not afford a strike," said Jennifer Riddagh, who works at a Vons store in Thousand Oaks.

A veteran employee at the top of the wage scale, Riddagh said she would be inclined to vote for an agreement that provides "second-tier" workers with better health insurance and gives them a path to reach the top pay scale.

"This needs to be a job that you can have a career in," she said.

Currently, veteran workers' wages top out at $12.17 to $17.90 an hour. The exact pay depends on job classification, such as general merchandise clerk, food clerk and meat cutter, and how often the employee works Sundays and other shifts with premium pay.

Second-tier employees currently start at $7.55 to $11.05 an hour, depending on the job classification. Their wages top out at about $1 to $3 less per hour than those of the veteran workers.

The previous contract was set to expire March 5 but was extended while negotiations continued.

Rachel Rehwald-Merriam, who shops for her Altadena family of four, said she was glad to hear that the new contract would address the union's concerns about health insurance.

"I think that the health insurance problems [for the newer workers] were a real shame and I would have boycotted the stores," said Rehwald-Merriam, a frequent Ralphs shopper. "If they were able to avoid a strike and get improved health benefits, that's great."

The settlement ended nearly seven months of negotiations, during which the union issued a number of strike threats.

The deal marks "significant progress" for the UFCW, said Dave Smith, associate professor of economics at Pepperdine University's Graziadio School of Business and Management.

"I think the grocers found that this notion of a two-tier system has not worked out as well as they thought," Smith said. "You get a lot of workplace dissatisfaction with such different wage and benefit scales for employees who are working side by side."

Providing newer workers with a way to reach the top wage scale and a better benefit package "should improve workplace harmony," he said.

Jacobs, the UC Berkeley labor expert, said the grocery chains were probably surprised by the level of resolve displayed by the seven UFCW locals in Southern California during the talks.

The union was able to win two strike-authorization votes and recruit the support of local politicians and religious leaders, he said.

The looming arrival in Southern California of Tesco, Britain's largest retailer, also made the companies eager to get a contract wrapped up, Jacobs said.

Tesco is spending as much as $2 billion to launch Fresh & Easy Neighborhood Market. It has about 100 small-format stores in the works in the western United States, about half of them in Southern California. The company could alter the supermarket landscape, drive down prices and increase competition for workers.

Despite her satisfaction with Tuesday's agreement, Riddagh, the Vons employee, is thinking four years ahead.

"Hopefully with the next contract," she said, "we can shorten the time it takes to reach top pay."

jerry.hirsch@latimes.com

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