“We must get off the defensive and take the offensive because we will not be dictated to by management, we will not tolerate their usual tricks, we will not be lectured to about how our employers somehow can’t compete, and we will not accept the notion that retail workers don’t belong in the middle class.” Those words, uttered by United Food and Commercial Workers Local 400 (covering the Washington, DC metropolitan area) president Thomas P. McNutt, have set the tone for the bargaining of new contracts for approximately 30,000 clerks and meatcutters employed by Giant/Landover and Safeway in the Baltimore-Washington market.
The current four year pacts are due to expire on April 1 and clearly McNutt and his counterpart at UFCW Local 27 (Baltimore, Eastern Shore), George Murphy, have change on their minds.
McNutt believes that while the current contract, which was negotiated in 2008, provided some meaningful gains for his members (introduction of new tier of hospitalization coverage at affordable rates), certain key issues were left on the table (improving the pension fund liability which affects all parties).
This time around McNutt, who has been president of the region’s largest UFCW Local since 2010 (he has been a member of Local 400 since 1988 and his father, Thomas R. McNutt, served as president of Local 400 from 1976-1997) not only wants to attempt to provide more stability to the joint pension trust fund, he sees other key initiatives that he feels his members deserve.
“There are operational issues that are important to address as the market keeps evolving, McNutt noted. “We’ve been more flexible in tolerating vendors to work in the stores at the expense of potential hours to our members. And last time, we agreed to switch our wage schedule to number of hours worked versus length of service. These issues will have to be reviewed.”
McNutt also pointed to the need to retain the current “maintenance of benefits” (where the employers pay health care increases) that has existed since the first contract was negotiated 38 years ago.
“I’m aware that Giant and Safeway think ‘MOB’ is archaic, but the actual cost to the employers is less than 1 percent and the goodwill that it provides to our members is immeasurable,” McNutt asserted.
Above everything, in McNutt’s view is wages. He claimed that Locals 400 and 27 (which negotiate jointly with Giant and Safeway) had agreed to wage freezes (for top rated classified positions) over the last contract, but given the profitability and leadership market shares of Giant/Ahold and Safeway, it’s time that the companies’ clerks and meatcutters share in their successes.
“Safeway had earnings of nearly $1.2 billion last year, and almost $11 million in compensation was paid to Safeway’s CEO Steve Burd in 2010. Just think about that,” McNutt commented. “He’s making the equivalent of $5,286 an hour. In a single work day, he earns $42,285 – more than many of our members make in an entire year. So, if he comes and tells us to accept lower wages or fewer health benefits or to pay more for our retirement, we’re going to remind him of this fact – Safeway is profitable because Local 400 members make Safeway profitable!”
As for Giant/Landover, McNutt stated that Ahold USA (Giant’s parent) grew by 5.1 percent
last year while the company’s European operations declined by 3.5 percent.
“It’s the USA that’s keeping Ahold in the black,” McNutt said. “It’s Giant/Landover and Stop & Shop that are keeping Ahold USA profitable. It’s time for our members to receive more of the wealth their hard work is generating.”
McNutt acknowledged that the Baltimore-Washington landscape has changed over the past decade with more non-union entities entering the region and gaining market share at the expense of the organized retailers.
“I think we’ve been sensitive to their needs and have made the adjustments by creating new medical hospitalization plans and lengthening eligibility requirements,” he stated. “The chains have clearly benefited from some of those concessions. Of approximately 30,000 members, only 1,100 members hired prior to 1983 (the most highly compensated employees) remain. Most of our current members were hired after 1983. We’ve absorbed much of the cost reduction in recent contracts through some freezes and buyouts. We will look for more balanced contracts this time around.”
In order to communicate the UFCW message to its rank and file, Local 400 has held three shop steward seminars over the past seven months. Additionally, more than 10,000 face-to-face meetings have been held with members on-premises at the stores and away from stores.
“Communication is the key. Today’s member wants to be more engaged. We are in an era of greater transparency, not only from our leadership to our members, but also from our employers to us,” McNutt said. “As the bargaining ensues, we will be expanding our efforts to enhance communications with our membership including the use of digital communication and social networking.”
Along with McNutt and George Murphy, Local 400 secretary-treasurer Mark Federici and his counterparts from UFCW Local 27, Eric Masten and Tim Goins, will head the bargaining from the union side. Expected to be at the table from Safeway are Frank Stegman and Donna Gwin, while Ira Kress and Dave Gillis are expected to represent Giant/Landover. Also expected at the bargaining table representing the chains is Harry Burton, veteran labor attorney from Morgan Lewis, who has been part of many previous contract negotiations.
The first bargaining session is slated for January 11, with at least three more meetings scheduled through late February.
Asked if he expected that negotiations would require an extension before the April 1 contract expiration date, McNutt commented: “Perhaps only a day or two at most. I’ve made it clear that I want to get this done at least a week before expiration, so all parties can have enough time to effectively communicate the details of the contract.”
Is McNutt confident that a deal could be reached that would mutually satisfy both sides, the 53 year old labor leader said: “I’m always confident about that. There is enough ground here for compromise and still be fair to everyone. Our position is that it’s time that the playing field becomes more level, because our members are the foundation of the success that both Giant and Safeway have enjoyed for many years in Baltimore and Washington.”