The United Food and Commercial Workers union, which represents 35,000 employees of Stop & Shop Cos. Inc., has decided against offering major contract concessions to the New England retailer in exchange for equity in the company in an effort to block a proposed takeover by Washington's Haft family.
Union sources say the UFCW leadership concluded that concessions were not a viable option at a top-level advisory committee meeting on Tuesday. Instead, sources said, the union has decided to pursue a legal strategy against a takeover to preserve employee rights no matter who owns the company.
The UFCW's executive vice president and director of collective bargaining, William J. Olwell, said yesterday that the union was "more determined than ever to protect our members and ensure the sanctity of our contracts. ...
"We are putting Stop & Shop on notice that the UFCW intends to use every available resource to achieve our aims," Olwell said, noting that job security guarantees will remain a top priority of the union -- regardless of the outcome of the takeover battle.
The Hafts have offered to buy Stop & Shop, which owns a New England supermarket chain and the Bradlees department store chain, for about $1 billion.
Stop & Shop's board turned down the Hafts last week, saying the offer was inadequate. However, Stop & Shop said it was exploring alternatives to the offer, including a possible sale of the company to another firm or a leveraged buyout by management in which the company's assets would be used as collateral to finance the acquisition of all publicly held stock.
UFCW, concerned that many of its 35,000 workers could be laid off in the event of a change in ownership or as the result of Stop & Shop's efforts to ward off a takeover, were considering offering contract concessions in exchange for equity to help Stop & Shop evade the Hafts bid. Concessions would reduce costs and allow Stop & Shop mangement to borrow more money to pay for a leveraged buyout.
Contracts for Stop & Shop employees and some Bradlees employees, including those in the Baltimore area, are currently being negotiated. The Baltimore-based Local 27 has notified Stop & Shop that its Bradlees employees will strike on Feb. 23 if the company and the union have not agreed on job protection provisions by that time.