Skip navigation
Save Mart Reaches Short-Term Labor Agreement

Save Mart Reaches Short-Term Labor Agreement

 “The agreement with Save Mart could create an atmosphere that gives Raley’s the impetus to re-engage with the union," said Mike Henneberry, a spokesman for UFCW Local 5.

MODESTO, Calif. — The tentative agreement last week between Save Mart Supermarkets here and three locals of the United Food and Commercial Workers Union could provide an “impetus” for Raley’s Supermarkets to return to the bargaining table, a union official told SN.

The proposed settlement with Save Mart, which includes temporary labor-cost reductions, would run only through Oct. 12, 2013 — approximately two years after the previous contract expired last Oct. 29. At that point the UFCW would seek to negotiate a new agreement after seeing how the chain performs with the reduced costs, Mike Henneberry, a spokesman for UFCW Local 5, told SN

He also said the union hopes the tentative agreement with Save Mart encourages Raley’s to reopen negotiations. “The agreement with Save Mart could create an atmosphere that gives Raley’s the impetus to re-engage with the union," Hennebery said.

Three UFCW locals in Northern California — representing approximately 11,000 members of Locals 5, 8 and 648 — have been meeting with Save Mart, Raley’s and Safeway since last fall. 

Talks with Safeway are scheduled to continue this week. However, Raley’s broke off negotiations in early June, saying the two sides were at an impasse, with no progress being made.

Raley's at Impasse

Raley’s said last week it has requested a copy of the proposed contract. “We are still at an impasse with the union, but we will look at the [Save Mart] agreement,” the chain said in a prepared statement last week.

“Once we see what was proposed and agreed to, we will be able to review our offers to make sure we captured all possible savings and necessary modifications. It is important to note that our business and our needs are very different from [those of] Save Mart and Safeway, so we don’t expect our agreement with the union to be the same.”

In a section of the Raley’s website directed at employees, Michael J. Teel, president and chief executive officer, wrote earlier this month: “We have not yet given up hope that the union will come back to the bargaining table and work toward an agreement that has the cost savings we need.

“However, if we are forced, we are prepared to implement the contract modifications we need to achieve necessary cost savings without the union’s approval. Any action we take will not be with the intent of causing a strike but would be done out of necessity to preserve our company’s future.

“We have already implemented similar reductions at our corporate office, non-union stores and in our other union contracts, and we need to reduce our operating costs in our union stores as well.”

Details of the tentative agreement between the UFCW and Save Mart were not disclosed, pending informational meetings with employees to explain details of the proposed settlement, Henneberry said.

Some final details on the health and welfare plan still remained to be ironed out last week, he added, though he said he expected meetings with Save Mart employees to take place over the next few weeks and for voting by mail to be completed by early next month.

In a joint statement the presidents of the three locals said the tentative Save Mart agreement “addresses the employer’s legitimate needs for temporary financial relief while preserving the core achievements of decades of union solidarity.”

Stabilization agreement

A key element in the proposed contract is a “stabilization agreement,” which gives Save Mart temporary labor-cost reductions to assist it “in its current economic challenges,” the union said in the joint statement.

According to Henneberry, the stabilization agreement “creates an atmosphere in which Save Mart can become more competitive and have a chance to get back its place in the market.”

He said it also includes a provision not to bump up the company’s contribution to the health and welfare plan until next January.

Henneberry told SN the stabilization agreement will remain in place until Aug. 10, 2014, though the full contract will expire on Oct. 12, 2013. “That will give us the ability to look at the impact of the stabilization agreement on the market and re-negotiate new contract language,” he explained.

He said Safeway is working to negotiate a longer-term contract “because it has a stronger market position and wants to get its costs locked in for a longer period.”

However, when the union renegotiates with Save Mart in 2013, the subsequent contract would probably expire simultaneously with the Safeway contract, he noted.

Commenting on the tentative contract, Steve Junquiero, president and chief operating officer of Save Mart, said, “We believe this agreement will allow us to be more competitive in the retail food market while providing enhanced job security and additional hours to our associates. 

“We also believe that, with this agreement, we can intensify our focus on the needs of our customers while remaining vigilant in working toward managing costs and growing sales.”

The agreement with Save Mart was disclosed the day after the date the two sides had set a week earlier as the final deadline for reaching an agreement — a contract extension that followed a vote by Save Mart employees to authorize a strike. The last few days of bargaining were overseen by a federal mediator.

At the time the deadline was set, the union said Save Mart had agreed to a three-point process for reaching a settlement, which included an audit to justify the company’s claims of need of financial relief; instruction to accountants and actuaries to establish a projected cost structure for labor costs based on the audit findings; and the empowering of the union and employer bargaining committees to structure a stabilization agreement and to allow the union the discretion to design an overall health and welfare plan.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.