Labor Center

Press Room

In the News 2014













Raley's pact reflects wins and losses on both sides

Sacramento Bee, December 8, 2012

  By Dale Kasler

When the picket lines came down at Raley's last month, both labor and management were quick to claim victory.

Not surprisingly, the truth lies somewhere in between.

The first strike in Raley's 77-year history ended in compromise. The tentative agreement gives Raley's wage and benefit reductions that the West Sacramento grocer says it badly needs — but also reflects the importance the United Food and Commercial Workers union placed on maintaining its health insurance plan.

While the pact does include some higher insurance costs for workers, their families and retirees, it preserves the core of a generous health package that was the rallying cry during the 10-day walkout. Union negotiators were more willing to give ground on wages.

"Over the last decade, this has been the story of labor relations in America," said Ken Jacobs, a labor expert at UC Berkeley. "To preserve health benefits … people have been forced to make other concessions."

Union leaders are working to sell their members on the deal. Jacques Loveall, president of UFCW Local 8 in Roseville, said in an online memo that the new contract is worthy of "your enthusiastic ratification."

Ron Lind, president of Local 5 in San Jose, said in a conference call with members this week that despite the givebacks, the contract is better than "what is provided to 90 percent of the retail workers in the country, union and nonunion."

The contract doesn't touch basic wage rates, but paychecks will shrink for many workers. Employees will temporarily surrender bonus pay for Sunday and holiday shifts. New workers will forfeit bonus pay for night shifts.

Top pay at Raley's is $21 an hour plus benefits, although most workers don't earn that much.

The changes in pay appear to be tied to Raley's struggles to return to profitability. Until the company achieves a 2.5 percent profit margin, the pay cuts "will be extended from year to year," according to the contract. A copy was posted on the website of UFCW Local 5 in San Jose.

But the language is murky. It doesn't make completely clear whether the pay cuts would continue beyond the two-year life of the contract if Raley's is still unprofitable.

Lind and Loveall wouldn't discuss the contract's details for this story.

Raley's officials also wouldn't comment on the contract until after it's ratified. Workers are voting by mail, with ballots due Dec. 17.

Lind, in his conference call, called the strike "very successful" because it forced Raley's to back off from some of its most stringent demands.

Notably, Raley's dropped its proposal to make the pay cuts permanent, he said. It also gave up on trying to eliminate health coverage for Medicare-eligible retirees.

But he added: "We know that there are some things in here that are distasteful."

It took the UFCW two tries to secure approval from workers for concessions in September at Save Mart Supermarkets of Modesto, another struggling chain. Lind, in his conference call, said Raley's employees are making fewer concessions.

He also said he's angry at Raley's for implementing some of the terms of the new contract even though it hasn't yet been ratified.

"It's a clear violation … a sign of bad faith," he told his members. He said the union has filed a complaint with the National Labor Relations Board.

Raley's spokesman John Segale said implementing those terms was permissible under the settlement, which was announced Nov. 13.

The deal does give the union something it's long desired. Raley's will let the UFCW organize the company's 22 nonunion stores without management opposition. If a majority of workers at a store sign union cards, Raley's will recognize the UFCW without forcing a vote.

"That is a big concession," Jacobs said, adding that it will significantly improve the chances of organizing those stores.

Besides continuing care for retirees, Raley's agreed to put another 60 cents an hour into the trust fund that oversees the health plan. That will bring the total contribution up to $6.80 an hour, one of the top rates in the U.S. supermarket industry.

Even with the extra cash from Raley's, workers will have to pay more because of rising health care expenses.

For the first time, employees have to pay for a portion of their family members' premiums — as much as $35 a week for spouses and $20 per child depending on the coverage. Retirees' premiums will rise.

Co-pays and deductibles will increase, too. But the increases will be small for those who join a "health care partnership" program that includes "health and lifestyle coaching."

Original Article


Center for Labor Research and Education
2521 Channing Way # 5555
Berkeley, CA 94720-5555
TEL (510) 642-0323    FAX (510) 642-6432

A public service and outreach program of the Institute for Research on Labor and Employment