With the October 26 contract expiration date passed, United Food and Commercial Workers (UFCW) Local 400 (Washington DC, suburban Maryland and Virginia) and Local 27 (Baltimore area and the Eastern Shore) and grocery chains Giant Food and Safeway have agreed to an extension of their existing agreements.

Sources from both sides have termed the bargaining as challenging and noted the extension is a day-to-day one, with either side able to cancel the agreement with 72 hours’ notice.

While wages, healthcare and retirement benefits remain the key core issues, an overriding concern for all parties that is being addressed is the huge unfunded liability of the multi-employers’ pension fund which impacts about 35,000 current and retired clerks and meatcutters at both chains. That unfunded amount is approximately $1.1 billion, making it one of the highest shortfalls of any pension fund in the nation.

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Shortly before the contacts expired, a federal mediator was brought in to help bring both sides together. However, several sources told us that concerns about the huge pension trust liability (which some believe could become insolvent in the next few years) remain at the top of the list and that all parties are seeking help from the Pension Benefit Guaranty Corporation. The PBGC is a quasi-government agency that was created in 1974 to guarantee continued payment of pension benefits for private-sector defined-benefit plans. Among other services, the agency provides financial guidance to pension plans that are underfunded or have failed. We’re told that all entities are waiting for the PBGC to respond to their request.

All told, approximately 26,000 store associates (15,000 at Giant and 11,000 at Safeway) are impacted by the bargaining. As was the case in 2016, when the two large chains negotiated their last agreements, Giant and Safeway will bargain their contracts separately. Prior to that, the two chains negotiated UFCW labor pacts as one combined entity for more than 40 years.

In a letter to his members on October 25, Local 27 president Jason Chorpenning said that his membership will not be rushed into a bad deal, adding that the union will continue to seek “Wages we can live on; schedules we can depend on; healthcare we can afford; and retirement we can count on.”

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When all parties inked their last contracts in 2016, members earned an average compensation increase of $3.35 an hour (wages and benefits) and were able to avoid givebacks on healthcare.