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President's Message
By Frank DeRiso
Local One President
Pension Joins Wages, Health Care As Big Issues
February 27, 2008
 The most important possession a union worker has is his or her collective bargaining agreement. For 86% of Local One’s members, these union contracts expire during 2008, and will be negotiated through collective bargaining.
That includes our two largest employers, Tops Markets and P&C.
We often refer to the economic package as a pie where the biggest sections are wages, health care benefits and pension benefits. Management wants to keep the pie as small as possible. Workers want to make it bigger. In the end, most of it will be split among those three pieces.
I have been involved in negotiations for a long time. One of the major changes I’ve seen during the past six years is the size of those slices.
Before the cost of health care began to skyrocket, increasing wages was easily the first priority and made up almost the entire pie. We know how that has changed. In order to maintain health care benefits, members have been willing to accept wage increases that are less than what was expected years ago.
More recently, employer pension contributions are taking a bigger slice. Here’s why. The Local One Pension is a defined benefit plan. That means your monthly pension is fixed at a certain amount based on the number of years you are in the plan. It is meant to stay at that amount from the first day you start collecting until the day you die. Actuaries figure out how much your employer must contribute each month so that the fund will have enough money to pay that defined benefit.
That money is, of course, invested. Compared to many other funds, the Local One Pension has done very well on its rate of return. But like every other fund, ours took a hit during a 2000-2001 dip in the stock market.
As with the last round of negotiations, we continue to need annual 10% increases in pension contributions from your employer in order to maintain your level of benefits. That makes pension a bigger slice of the pie.
A new law pushed hard by the Bush Administration is also affecting pension plans. It is called the Pension Protection Act. If a fund is going to maintain benefit levels, the law requires that employers pay the needed increases.
As you would expect, a law supported by the Bush Administration has parts that do not favor workers. The law limits the government’s responsibility when a fund can’t meet its obligations. It also takes away some of the guarantees that retirees collecting benefits used to have. Hopefully, a new administration will try to remove those parts of the law that could punish hard working people who deserve a secure retirement.
So as we enter negotiations, I thought it was important that you understand the pension situation. It doesn’t change our goals. We still want employers to provide an economic package that the membership deserves. We must maintain health care and pension benefits, and still increase wages.
That means really focusing on those three pillars of the contract. So we may not be able to push as hard for some of the other improvements that members wish they could have.
Please don’t just stand on the sidelines. Talk to your co-workers about the importance of a strong contract. Let your steward and union rep know what is most important to you. Don’t be afraid to let management know that you and your co-workers will be unified in standing up for what you deserve. That message will filter up to top management and strengthen your ability to win a fair agreement.
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Mutual Expectations With New Tops Owners
November 30, 2007
In November 2006, Royal Ahold announced that Tops Markets was for sale. In October, Morgan Stanley Private equity purchased 71 of the 72 Tops stores for $310 million.
After 11 months of uncertainty, our 10,000 members at Tops Markets are relieved to know that a new owner is retaining all of the employees at those stores. Plus, the actual management will again be local.
That is what the leadership of Local One hoped for and worked at for nearly a year. Our worst fear was that Ahold would sell the company piecemeal, and that buyers of some stores might not respect a union contract.
Local One members at Tops should be pleased with themselves and their hard work. An excellent workforce was one of the reasons why a financial giant like Morgan Stanley bought a retail grocery chain in Upstate New York.
The purchase by Morgan Stanley is a sign of how much the grocery industry has changed in the last few years. Morgan Stanley and other private equity companies are not grocery operators. Morgan Stanley will not be running the day-to-day operations of Tops. It has hired a local management team to do that.
Morgan Stanley buys companies with the idea of increasing their value and eventually selling them for a profit. The big question is how long Morgan Stanley will keep Tops. Gary Matthews, managing director and operating partner with Morgan Stanley Private Equity, was quoted saying that the company had a “nice long-term horizon” with Tops.
We don’t know what “long-term” means to Morgan Stanley. My feeling is that means 10 years at the very most. But it will probably be less than that.
We do know what Local One members and Morgan Stanley should expect from each other.
Morgan Stanley bought an excellent workforce that will provide first-rate customer service and dependability. We expect that Morgan Stanley and Tops will continue providing those workers with a competitive wage and Local One’s outstanding health care and pension benefits.
In partnership with our employers, our Health Care Fund Trustees have taken steps to keep the fund in good financial condition. I will match our health care benefits against any other in the retail industry. We have modified the plan to control costs for employers. We have done this without sacrificing care, and without having our members make payroll deductions to pay insurance premiums.
That will continue under Tops’ new ownership. It will also continue with our other major retail employer, Penn Traffic.
It is basically the same situation with the Local One Pension Fund. Like most pension funds, Local One’s needs more funding. But compared to the large majority of other funds, Local One’s is in good shape. We expect that Tops and Penn Traffic will increase contributions and keep pensions secure.
We have to accept the fact that Morgan Stanley needs to increase the value of Tops for the time when it is eventually sold. To do that, Tops management team will need to invest in its stores. There is no big secret to success in the grocery business. Shoppers want lower prices and better service. If Tops commits to providing those things, its market share will grow. So will the value of the company.
I am confident Local One members will continue to provide great customer service. If both management and workers hold up their ends of the bargain, we can have a successful partnership with Morgan Stanley and Tops.
Getting Rite Aid to Do the Right Thing
Local One has more than 500 members working for Rite Aid drug stores. Most are in the Rochester area. Part of Local One’s agreement with Rite Aid gave the union the right to go into non-union Rite Aid stores and sign-up workers to join Local One. If a majority of workers in a store signed up, Rite Aid agreed to begin negotiations.
Rite Aid recently bought out 1,850 Eckerd and Brooks drug stores. Rite Aid is now claiming that our agreement does not cover the stores it has purchased.
Local One has brought this issue to arbitration. UFCW International is also working together with other national unions who represent Rite Aid workers and have issues with the company’s new anti-union behavior. So there will be a lot going on in the next few months.
Happy Holidays
I am grateful to have passed another year leading the good people of Local One. Let’s hope and pray for a good year ahead for all of us, and for peace in the world. May you all enjoy the holiday season with your families and friends.
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Transitioning Our Health Plan From the Past to the Future
March 22, 2007
The year 2004 saw many labor disputes, including some major strikes in the Grocery Store Industry. Shifting health care costs to workers was the major issue. To avoid the same conflicts, Local One modified our health care plan through a different form of shifting cost.
We established a Blue Cross P.P.O. Network, along with a change in plan design benefits. That was the key to successfully achieving our bargaining goals for 2004. We made sure that the Health Care Fund continued to provide a high quality of benefits for members and their dependents. Also, we were able to stabilize the contributions per employee that employers pay to provide benefits.
During 2006, your health care plan paid more than $57 million in benefits to members and their dependents. Because of our plan design, our employers still realized a much lower cost per employee, and we had a much lower increase in 2005 and 2006 than the national average for health plans.
Our goal for the next four to five years is to continue providing the same benefit level while keeping Local One employers’ costs at the lowest level among union employers in the Food Industry.
During the 2004-2005 negotiations, we averted weekly co-pays by adopting higher deductibles and increases in maximum out of pocket expenses. The theory was that if you and your family use the benefits, you might have to pay a little more. If you don’t use the benefits, then there is no cost to you.
Now, we need to take additional steps to stay ahead of rising costs. We want to maintain a high level of benefits and keep the employers at a rate affordable with no weekly co-pays from participants. To do that, we must transform our plan from the past to the future. You will become part of the solution.
We must examine the current system that drives costs, while helping our members better manage their claims and their out-of-pocket costs. That is why we have established a committee of health care consultants and experts to develop programs and ideas.
In developing cost containment programs, the first and most important thing will be to involve all members in their own health care, and help each union member understand the true cost of health care.
Our cost committee will be looking at reducing cost through:
• Health care assessments (providing participants with an assessment of their vital health statistics and guide them to proper care)
• Wellness programs (to improve the health of our participants)
• Disease management (to help people with chronic conditions manage them better)
• Other proactive programs.
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High performance Provider Networks will still be a key to maintaining a low trend (increase) in benefit cost. Here is what we expect from those networks:
• Provide information on high quality providers (for improved health outcomes and patient safety)
• Use evidence-based health care results to select providers
• A high standard of care
• Use of our current data to profile high risk participants and work on lowering their risk by proper quality care
• Make sure we have members who are active and involved in their health care decisions.
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In order to transform our health plan from the past to the future, we must educate participants and have a high intervention with participants at risk. If, together, we do not succeed in these initiatives, then employers will be facing a much higher cost to maintain our quality of benefits. They will no doubt propose weekly co-pays and other painful changes for each member.
That is something the members and leadership of Local One want to avoid.
No News on Tops Sale
The Tops grocery stores sale is proceeding as originally planned. The Purchase Book of Sale was completed and made available to prospective buyers in early March. As of the writing of this issue of The Voice, I have been told that there has been a good deal of interest among possible investors.
We have continued to push every lever available to encourage parent company Royal Ahold of The Netherlands to sell the company to one buyer. We have reached out to elected officials, other unions, the news media and consumers.
For now, my only advice to Tops members is to continue doing the great job your have always done for the company and the customers. Prospective buyers need to see a strong commitment to the stores from employees, shoppers and the public. That will enhance our ability to protect the livelihood of all union members at Tops.
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Time for Health Care Reform Is Now
April 18, 2006
You could say we ended 2005 with a sigh of relief. Local One completed contract agreements with our major grocery chains with no health care premium co-pay for members.
Local One retail workers have never paid weekly deductions for health care insurance. That issue is number one in every round of negotiations. Unless something changes in the way health care is delivered in this nation, next time around we will again be fighting to avoid paycheck deductions. And again, we will have a very tough time both maintaining benefits and increasing wages.
If there is one thing that everyone agrees on (except maybe the drug and insurance companies), it is that the U.S. must reform our health care system. The trick is agreeing on a better plan that people will accept and Congress and the President will pass.
Nothing good will come out of our current Republican Congress and the Bush Administration. Bush is pushing Health Savings Accounts (HSAs). These plans seem to be based on the idea that people have too much insurance, so they overuse it and drive up costs. So Bush wants private plans with high deductibles. Money goes in your HSA, and you get tax breaks. It's a nice plan for healthy people with lots of money.
UFCW International is part of a project that wants to come up with a better way. The Citizens' Health Care Working Group is made up of labor, business and non-profit groups. You can give your ideas for reform by going to www.ufcw.org.
A lot of ideas have been proposed through the years. Some would keep our system of employer-based coverage. For that to work, there must be requirements that employers provide coverage. That certainly goes for huge employers like Wal-Mart. One route is to force large employers to pay a base level for coverage.
This magazine has postcards inserted that we want you to send to your state legislators. Pages 4-5 explain Fair Share for Health Care legislation. Maryland has passed this law, so we see no reason why New York and Pennsylvania shouldn't also. Nothing will happen if legislators don't hear from us. Here is your chance to make some noise for less than 50 cents in postage.
To get national legislation that strengthens employer-based coverage, there would have to be subsidies for smaller employers. Another part of the picture must be negotiated prices with providers. Large plans like Blue Cross/Blue Shield plans get providers to agree to set rates in order to be part of the plan's network. Any national plan (or large pool of employers) would do the same thing, but with even more buying power. (One of the most disgusting parts of the awful Bush Medicare drug plan is that it specifically prohibits negotiating prices with drug companies.)
The last time we had a serious national debate about health care was the Clinton plan. It included some of the ideas just discussed. You may remember that insurance companies spent millions to distort the plan and frighten people. The plan was also too complicated for most people to understand.
There is another way that is simple: national health care funded through taxes. The U.S. is the only advanced nation that does not provide health care for all its citizens. Almost 46 million Americans have no health insurance. Yet we still spend twice as much on health care as some other industrialized nations.
Many opinion polls show that a majority of people would accept national health care. But opponents call it socialized medicine and say people will have long waits for some kinds of care. Insurance and drug companies will fight a national plan tooth and nail.
No matter which way we go as a nation, we can't afford to wait any longer to find solutions.
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Sale of Tops Stores Shows No Jobs Guaranteed
July 28, 2005
The news out of Tops Markets is bad. The company has announced that six stores are being sold to non-union Price Chopper. Another 25 stores are for sale.
Price Chopper is buying stores in Fulton, Oswego, Oneida, Owego, Sidney and Tupper Lake. Local One represents 115 full-time and 341 part-time workers in those stores. Tops say the closing on the sales is expected early in the fourth quarter of this year.
Sale of the remaining 25 stores will affect 170 full-time and 673 part-time workers. Tops says the stores will continue to operate until buyers can be found.
Tops will retain only four stores in the Midstate Division: Cortland, Auburn and two in Ithaca. All of the stores in the Adirondack region will be sold.
The unions responsibility now is to begin effects bargaining with Tops for members in the stores being sold. We cant control what stores Tops decides to sell. We do have control over members seniority rights and their opportunity to maintain their jobs. In bargaining with Tops, we may be able to reach agreement on other ways to ease the blow of job loss.
Workers at affected stores in the Midstate Division can transfer to other Midstate stores based on seniority. However, with so few stores staying open in the division, opportunities will be limited.
Tops has said it will put displaced workers on a preferential hiring list for stores outside of the Midstate Division. We will take up the terms of rehiring in effects bargaining with Tops.
Local One will not abandon our members who will lose their jobs with Tops. We have an established displaced workers program that provides information about resources. The goal is to help people cope with the hardships of unemployment and find new work.
We know that the first six stores are being sold to Price Chopper. It would be the smart and decent thing for Price Chopper to rehire the Tops workforce. Of course, we have absolutely no control over that.
Tops is not saying whether it has buyers for the other 25 stores. The best case is that some may be purchased by companies that would negotiate a union contract.
Except for the stores in Cortland, Auburn and Ithaca, all of Tops corporate stores will be in Western New York (Rochester, Buffalo, etc.) and the Erie, PA area.
This is what Tops said in a press release: Tops has recently redefined its core market area as its stores in Western New York stretching into the Midstate region. Tops will reinvest the capital raised, particularly in its stores in Western New York, where updates to its new prototype are planned for several of its locations.
The bottom line is that Tops was unable to make a profit in the markets it is abandoning. We know that wasnt for lack of effort from Local One members. We also know that non-union competition, especially from Wal-Mart, can destroy better compensated union jobs. The loss of these union jobs is a reminder that no one has guaranteed job security.
That should be enough reason for all Local One members to fight back against Wal-Mart. Dont shop at Wal-Mart. Educate your friends and relatives about how Wal-Mart brings down a communitys standard of living. Get involved in any Wal-Mart site fights in your area.
Union grocery workers are in a fight for survival. Members who work for the Penn Traffic Co. at P&C and Quality stores have just survived the companys second bankruptcy. They have a new contract that maintains their benefits. Like Tops, Penn Traffic closed stores that were not profitable.
We can only hope that both Tops and Penn Traffic will increase market share in their remaining stores, and no more will be closed or sold.
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