The Modesto Bee, May 1, 2012
SACRAMENTO — Raley's pushed its union work force to the brink of a first-ever strike Tuesday, gambling that it can exert enough pressure to force the cost savings the company says it needs.
After months of negotiations, the struggling grocer suspended talks and declared it will submit its "last, best and final contract offer" to the United Food and Commercial Workers.
The offer would leave thousands of UFCW members across Northern California with two unpleasant choices: Accept the offer, with cutbacks in health care and other compensation, or reject it and risk the first walkout in Raley's 77-year history.
The West Sacramento-based chain has two stores in Modesto and one each in Manteca, Merced, Oakdale and Turlock.
The UFCW, following a late-night negotiating session in the East Bay, issued a statement accusing Raley's of playing a "reckless game of chicken." Saying Raley's hasn't proven its case for savings, the union said it would schedule membership meetings to authorize a strike.
The brinkmanship reflects the huge challenges facing long-established, unionized supermarket chains like Raley's — and their workers — as non-union grocers like Wal-Mart devour market share. Safeway and Save Mart are demanding savings, too, but haven't pushed the union as aggressively as Raley's.
"Raley's is saying, 'We cannot continue to operate in this marketplace with the disadvantage in relation to the nonunion operators,' " said industry consultant Bob Reynolds. "Raley's is not, in general, in a good position. Their position of leadership has faded in the last five to seven years."
A strike would hurt management and labor alike. Even if Raley's keeps its stores open with fill-in workers or managers, many customers would likely go elsewhere rather than cross picket lines.
By the same token, UFCW members might be reluctant to walk out in a weak economy. Employees at the top of the pay scale make around $21 an hour plus benefits, although workers say most employees make considerably less than that.
Raley's downplayed the possibility of a strike. Chief Executive Michael Teel, in a memo to workers, predicted employees would vote in favor of the final offer. He said Raley's is merely asking them to accept concessions similar to those swallowed by its nonunion and white-collar workers.
"We do not expect the employees to vote for a strike," he wrote.
The final offer covers workers at the chain's three store brands: Raley's, Bel Air and Nob Hill Foods.
Labor experts said Raley's is taking a gamble.
"They're definitely pushing it very close," said Ken Jacobs, a professor at the University of California, Berkeley. "It seems like it would be a very foolish move by Raley's to push it to a strike."
For now, workers will get paid under terms of the old contract, and no changes are imminent. Raley's hasn't put the finishing touches on its "best and final" offer. Nor has it decided when to submit it to a vote of the workers.
If workers reject it, Raley's could simply impose the terms of that proposal, said Catherine Fisk, a labor law expert at UC Irvine. She said the union could respond by filing a complaint with the National Labor Relations Board. Or it could strike.
Until now, Raley's, Safeway and Save Mart were content to extend the contracts every few weeks. Safeway is still doing so, but Raley's and Save Mart let their contracts expire late Monday. The expirations on Save Mart's pacts are effective May 9.
Save Mart hasn't yet talked about a "best and final offer." The Modesto-based company said there would be no walkout "unless the union, and only the union, calls a strike."