Safeway Inc. and the union representing 100,000 of its employes have reached agreement on providing benefits to dislocated workers, including severance pay for those who have lost their jobs, the union announced last week.
The United Food and Commercial Workers International Union said the agreement would provide severance pay for 5,000 union members in Dallas who lost their jobs when Safeway sold and closed its 131 stores there in April.
"This is a major breakthrough in our efforts to protect our members in the aftermath of Safeway's leveraged buyout," said the union's president, William H. Wynn. "It provides immediate relief for thousands of our laid-off members in Texas and greatly strengthens job security for all our Safeway members."
Safeway is restructuring to become more cost competitive following its $4.2 billion leveraged buyout last November, which took the company private.
Wynn said the agreement was to be filed late last week in Alameda County Court in California, where the union had filed a lawsuit against the supermarket chain.
That lawsuit was to be withdrawn as part of the agreement, Wynn said.
Under the agreement, Safeway would give severance pay to Safeway workers who lose their jobs if Safeway sells the divisions in which they work and the new employers do not retain the employes and negotiate a contract with the union.
Laid-off Safeway workers also would be eligible for preferential hiring if they move to an area where Safeway is keeping stores open.
The agreement provides one-half week's pay for each year the laid-off employe worked for Safeway, up to 16 years. Employes who worked for Safeway for less than a year, and part-time workers averaging less than 20 hours a week, would not be included.
The union also said Safeway agreed to work with the union in obtaining government retraining funds for dislocated workers in Dallas and other areas if stores are closed.
Safeway has announced it intends to keep its divisions in Washington and Baltimore, northern and southern California, Seattle, Portland, Ore., Phoneix, and Canada.