Safeway, Giant Workers Ratify New Contract

Health Care Was Main Concern

Safeway and Giant Food workers yesterday voted to approve a new labor contract that includes wage increases for the next four years but will require some employees to pay weekly insurance premiums and higher health-care deductibles.

In meetings at the D.C. Armory, about 6,000 workers showed nearly unanimous support for the contract in a stand-up vote. C. James Lowthers, president of United Food and Commercial Workers Local 400, said that health care was union members' top concern and that the deal was comparable to others recently negotiated in the industry. Along with Local 27 based in Baltimore, the union represents more than 23,000 workers in the region.

"We had certain goals we needed to achieve," Lowthers said. "This is as good an agreement as anyone has gotten."

Safeway and Giant's lead negotiator, attorney Harry W. Burton, said he thought both sides negotiated "in good faith."

"I'm sure all parties are pleased that the result was a fair one," he said.

The two grocery chains are the largest in the region and control more than half of the market. They reached a tentative agreement with union leaders late Saturday after more than a month of intense bargaining and the possibility of a strike looming in the background.

Giant employee Donna Smith said she made a point to cast her vote at yesterday's meeting even though she has been on sick leave. She said that she was happy with the agreement but also that she thought anything would be better than striking.

"We've got houses, we've got bills. We have to work," said Smith, who has worked at Giant for more than 28 years.

Employees seemed generally upbeat as they left the Armory yesterday. Some wore their work uniforms, and others wore the union logo on their chests. Giant closed its stores for several hours so workers could attend the meeting, and Safeway allowed them to request the morning off.

The new contract splits the burden of paying for health-care costs among veteran and new employees. The union scored an important win in avoiding insurance premiums for current workers. But those hired before 2004 will see their annual deductibles rise from $200 to $300 per person. Employees hired after 2004 already pay that amount.

Meanwhile, new hires will be required to pay $5 per week for individual health coverage and up to $15 a week for family plans. Their deductibles will also be $300.

Both sides said the compromise was designed to help alleviate the companies' rising health-care costs while maintaining affordable benefits for workers. The union estimated that Safeway and Giant, which are self-insured, will spend $181.1 million on health care this year, rising to $245.8 million by 2011. Traditional supermarkets have been squeezed in recent years by more nimble, nonunion competitors such as Wal-Mart that have lower labor costs.

Union leaders and management deferred debate on retiree benefits. They agreed that the companies' share of their health benefits should be reduced by 11.5 percent by 2011 but did not say how they would achieve that. Those negotiations will continue for 60 days.

The new contract also includes annual pay raises of 15 to 40 cents an hour for employees at the top of their pay scale for the next four years, roughly equivalent to the terms of the current contract. Walking out of the meeting yesterday morning, Sheri Belanger said she wished the increases were higher but that she was willing to accept it.

"Actually, I am happy," said Belanger, who has worked at Safeway for eight years and wore her uniform apron to the meeting yesterday. "I know a lot of work went into this."

New employees will also start at a higher rate, but it will take longer to reach the top of their pay scale. For example, a full-time deli clerk began at $6.60 an hour under the previous contract and would have received $14.50 an hour after less than four years on the job. Under the new terms, the clerk will start at $7.60 an hour but take a little more than five years to reach $14.50.

That scale replaces a similar arrangement negotiated in the last round of bargaining four years ago that applied to workers hired after March 30, 2004.

Anyone hired in the past four years can decide whether to stay in the current scale or switch to the new terms.

The union said it rejected several more-stringent proposals by the companies to increase health-care costs for workers and eliminate higher pay rates on Sundays and holidays. Safeway and Giant also agreed to increase their contributions to employees' pension funds.

"Some people said, 'We need more money,' " Lowthers said of workers' response to the contract. "I said, 'Yeah, you do. But you've got to look at it in its entirety.' "

Safeway employee James Morris said: "We didn't gain a lot, but we didn't lose a lot, either."

Morris has worked at Safeway since 1970. He said he makes about $20 an hour but can earn up to $60,000 a year by taking shifts on Sundays and holidays. He said he knows that he is lucky and that jobs like his are a holdover from another era.

"Those days are over," he said. "They have to understand the fact that things have changed."