Supermarket Bargaining Setup Threatened

Negotiations for new contracts covering about 70,000 workers in Southern California’s supermarkets could develop into another significant milestone in the steady--some say precipitous--nationwide decline of multi-employer bargaining.

For several decades, the multi-employer bargaining system has served both workers and management well in a host of industries such as food, trucking, construction and steel.

Companies formed industrywide associations, each of which negotiated its own union contracts to provide uniform wages and working conditions for employees of all companies in an industry.

This system generally removes labor costs as a variable factor that companies use to gain a competitive advantage. That way, companies don’t fight each other for the title of lowest-paying employer in the industry. And workers don’t suffer the economic distress that inevitably hits them when they are just another “cost variable” in a competitive world.

But the system is falling apart in a number of industries.

It has collapsed in steel and has been badly weakened in other industries, such as trucking, as employers break up multi-employer bargaining groups in an effort by some to either increase profits or stop corporate losses at the expense of the workers.

The system usually fails when one or two companies break away from the multi-employer group and slash their own workers’ wages and benefits. Their rivals, in turn, then cut their own labor costs to remain competitive.

While it may be unlikely, unfortunately the same thing could happen in the coming Southern California food industry negotiations.

Some strange and unpredictable events are already taking place behind the scenes, as evidenced by the fact that food industry executives are talking candidly about the serious divisions within their ranks.

Normally, of course, when managers go into bargaining with food workers’ unions, they boast of their “one for all, all for one” policy under which corporations agree to endure together the longest of strikes by hiring all the strikebreakers necessary to prevent “greedy” workers from winning new contract gains.

Another clear indication that these are most unusual times in the food industry is that union leaders are talking less of the needs of their members and more of their own pessimism about the coming negotiations. The unionists are also candidly discussing sharp divisions within their own ranks over the best bargaining strategy.

All of these factors, and others equally unusual, are involved in the positioning of forces and the posturing now taking place on the eve of negotiations between supermarkets and nine locals of the United Food and Commercial Workers. Negotiations will start in the next month or so, even though contracts don’t expire until next summer.

None of the preliminary moves, however, bodes well for the workers, who were once among the highest paid semiskilled workers in the country but whose incomes have been dropping steadily because of reduced work schedules, already made contract concessions and layoffs.

The Food Employers Council, which represents all major supermarket chains in Southern California, was formed 38 years ago and generally thrived from 1957, when Robert K. Fox took over as president, until 1982, when he retired.

Often rude, always blunt, Fox skillfully kept fractious industry executives together in dealing with their workers’ unions.

Fox never shied from a fight with unions, even though the adversarial system of collective bargaining he so admired often resulted in strikes.

But he was not a union-buster and agreed to contracts that gave workers relatively good wages and benefits throughout the food industry.

Since Fox left as the Food Employers Council president four years ago, though, it has had several different presidents and has become badly divided over strategy. At least two companies have already dropped their membership in the council. It is now being led by a highly competent attorney, Joseph McLaughlin, who wants to get out of the job as soon as possible.

McLaughlin believes that the council will not disintegrate, but he says that the truth is “we (supermarket executives) still have to decide whether there will even be a multi-employer bargaining unit this year.”

“There has been never been a greater element of instability in our industry than there is now. We don’t even know if there will be Safeway Stores in Southern California much longer” because of the losses expected to stem from Safeway’s battle against a hostile takeover.

While management struggles to unite its forces, there is confusion on the union side, too. Union leaders here and in Washington all want multi-employer bargaining to continue through the Food Employers Council and avoid any action that would cause any more council members to break away from the multi-employer bargaining unit.

But Mel Rubin, head of Bakersfield Local 137 of the United Food and Commercial Workers, and two other local UFCW officers have an idea they think will not split the multi-employer bargaining system but instead will help end the confrontational style of bargaining that prevailed for so many decades under Fox.

Ironically, to achieve this goal, Rubin and his allies went to Fox, who epitomizes the adversarial system, and John Bacon, once Fox’s second-in-command. The unionists talked with Fox and Bacon to see if they would or could negotiate contracts on behalf of companies that no longer want to be represented by the employer council.

Rubin said his group fears that supermarkets that break away from the employer council will either try to operate non-union or will battle furiously to get contracts that pay lower wages than the council is willing to accept.

The concept proposed by Rubin and others is that, in exchange for job guarantees, the unions would negotiate contracts to minimize costly battles with management by developing such programs as worker participation in management decisions, stock ownership and new incentive systems. This could avoid pay cuts and increase productivity and, therefore, profits.

Fox said that while he does not represent any supermarket chain now, he has “discussed the idea with several large companies” that showed some interest in the idea.

But prospects for the idea are dim because it is strongly opposed by national leaders and several local officials of the UFCW as well as by many corporate executives who say separate contract talks with even a few major food chains would only further weaken the multi-employer bargaining system.

The general concept of minimizing adversarial relations is excellent. But it would be a bad bargain for both workers and market owners if multi-employer bargaining in the entire food industry has to die, as it has in other industries, just for the union to achieve a cooperative system with a few supermarket chains.

Clause That Depresses

“Most favored nation” agreements in union contracts can cause serious difficulties and could even cause a strike in the Southern California supermarket industry.

In fact, there could be a strike in the next few months if the food chains and the United Food and Commercial Workers fail to resolve their fundamental disagreement on just that issue: their own most-favored-nation clause.

The current UFCW contract provides that if the union agrees to a contract lowering wage rates in one firm because it is in economic trouble, then all other companies in the industry are entitled to pay their workers the same lower wages.

William Orwell, executive vice president of the UFCW, said the most-favored-nation clause must be eliminated. Orwell says the clause is bad for workers because it means that they cannot help a financially distressed company survive by taking pay cuts without forcing their co-unionists in prosperous companies to take the same cuts.

On the other hand, Food Employer Council members don’t want the union to be in a position to help one company compete with its rivals, so the council vigorously insists that it will not give up the most-favored-nation clause.

So often, what seems to be an insoluble problem before bargaining begins becomes just another chip on the bargaining table. But this issue emphasizes the difficulties that lie ahead for the Southern California food industry negotiations.

In other words, they seem deadlocked before they even begin.