Safeway and Giant workers in the D.C. area say they could announce a strike vote on Wednesday if contract negotiations with their employers do not change course. Such a move would include about 25,000 workers at more than 280 grocery stores in the region.
According to UFCW Local 400, which represents many of the region’s Safeway and Giant workers, the companies are at odds with the union over wages, health care benefits and worker pensions. There are also market pressures bearing down on the negotiations, as Safeway and Giant contend with the large and growing presence of non-union grocery stores in the region.
Jonathan Williams, a spokesperson for UFCW Local 400, told WAMU that Safeway and Giant are proposing a three-year freeze on wages for new hires in D.C. and Maryland at the minimum wage. Williams said the proposal is unacceptable to the union because “if you … pay union dues and you make minimum wage, you actually earn less than at any other job.”
The other major sticking points at the bargaining table have to do with benefits. According to the union, the companies have proposed a limit on the number of hours part-time employees can work. The proposed cap — 24 hours per week — would render those workers ineligible for certain benefits.
Giant’s proposal for health benefits would increase the company’s contribution rate, the company told WAMU in a statement. But Williams told WAMU the new health insurance plans put forward by the company would increase out-of-pocket expenses for workers.
The final disagreement, Williams told WAMU, is over pensions. The multi-employer pension fund for Safeway and Giant workers is headed towards insolvency. According to the union, Giant is maintaining a commitment to guarantee employee pensions, but contends that Safeway is “attempting to renege” on its part of the deal.
Giant wrote in a statement that it has “offered to more than double our annual pension costs in order to secure our associates’ retirement — not just now but for decades to come, representing the single largest labor expense in our history.”
Safeway did not go into detail about its proposals but wrote in a statement to WAMU that it is “committed to remain at the bargaining table to work through our challenges.”
“In the event of the pension plan’s insolvency, the company would continue our contributions at our current contribution rate,” a spokesperson for Albertsons, which owns Safeway, told The New York Post last month. “That said, this is vastly different from a suggestion that we would be required to pay the unfunded amount of the pension plan in addition to our ongoing contributions. That is neither required by law nor by any agreement we have with the union.”
Retail labor expert Burt Flickinger III, managing director of Strategic Resource Group, said Safeway and Giant workers earn as much or more than many of the region’s grocery store workers, but the companies really distinguish themselves from their competition in terms of benefits.
“It is rare for non-union retailers to have pension plans, Flickinger said. “And … Giant and Safeway have the best medical benefits by far of anyone in the marketplace.”
The problem with those pension plans, however, is that they come out of a fund that is headed towards insolvency, and the union says its current labor contracts mandate Safeway and Giant to pitch in towards employee pensions in the event of a funding gap.
“It’s not the union’s fault or responsibility that the stock market got badly crushed twice in the last two decades,” Flickinger said.
But in the absence of broader pension reform, which Flickinger said should come from the federal government, underfunded pensions represent a large financial burden for Safeway and Giant in a market where they’re seeing more and more non-union competition.
The German grocery chains Aldi and Lidl, whose workforces are not unionized, have been expanding their presence in the region (Lidl opened a headquarters in Arlington and announced seven new regional stores last year). Plus, Flickinger added, Wal-Mart and Target are also major non-union players in the regional grocery market.
The Washington Post reported in 2013 that Harris Teeter’s arrival represented an opportunity to recruit more union members, but the grocer has remained non-union.
Last year, Shoppers, whose workers are unionized, announced it would close or sell 17 of its D.C.-area stores, causing 1,100 workers to lose their jobs.
Meanwhile, unionized grocery workers elsewhere across the country have been at odds with management over recent contract proposals. In July, grocery store workers across southern California threatened to strike after months of negotiations. One of the companies at the bargaining table was Albertsons, Safeway’s parent company.
Last April, workers at Stop & Shop stores in New England went on strike for 11 days before reaching an agreement with the Dutch conglomerate Ahold Delhaize. Giant Foods is also a subsidiary of Ahold Delhaize.
“The grocery business is hard,” said Jeffrey Reid, a shop steward for UFCW Local 400 who works at a Giant location in Silver Spring. “You’re working on weekends, working on holidays, you work six days a week for the most part … and a lot of people are feeling disrespected by these companies.”
Reid said he’s hearing a full range of emotions from his coworkers: Some are scared, some are fed up, some are optimistic and some are uncertain about what a strike would mean and how to financially plan for the potential for one.
But Reid said when his fellow union members tell him they can’t afford to strike, he questions whether they can afford not to. Because for him, he says, having a guaranteed pension represents the chance to build generational wealth.
“Everybody wants their piece of the American dream,” Reid said. “I’m no different, and my coworkers are no different either.”