MELROSE PARK, Ill. -- Jewel Food Stores here has been ordered to pay a settlement to more than 15,000 union workers after the chain increased employee health insurance contributions without negotiations.
An arbitrator appointed by the National Labor Relations Board ruled that Jewel's unnegotiated increase violated the company's contract with the workers, who are represented by United Food and Commercial Workers Local 881. The union said the settlement totaled $7 million to $10 million, but a spokeswoman for Jewel said the figures are lower. However, she would not specify an amount. She also said the company is reviewing the decision for possible legal action, but has already set aside funds for the settlement.
The settlement was based on an arbitrator's order that the 93-unit chain rescind the insurance increase and repay the difference to the union workers, according to a statement by the union.
In January of this year, Jewel, which is owned by American Stores, Salt Lake City, increased employee contributions by 70% per week for employees with single-user coverage and 150% per week for employees with family coverage, said S.J. Peters, director of communications for Local 881.
The union immediately filed a grievance on behalf of its members and an unfair labor practice charge with the National Labor Relations Board, Peters said. Compensation to individual union workers will depend on the type of coverage each held and the length of time each was paying for health insurance, Peters said.
The January 1994 health insurance contribution increase followed a similar increase in May 1993. The earlier increase had been negotiated with Local 881 during talks for the 1992-1995 contract and was not disputed by the union. Peters called the first increase "reasonable and necessary."
"If Jewel was allowed to raise their employee contribution rate without additional bargaining with the union, conceivably they would be free to continue to raise their employee contributions another 250% the next month and again and again until the next contract was up for negotiations," said Ron Powell, Local 881 president.
"I am absolutely delighted with the arbitrator's ruling, especially since we knew we were right on this issue from the start," Powell said.