Thursday, October 30, 2003
Striking Grocery Unions File Federal Suits Over Benefits
From Staff and Wire Service Reports
The unions representing striking Southern California grocery workers filed suit in U.S. District Court yesterday to compel Ralphs, Vons and Albertson’s to continue making payments into the fund which pays for worker health care benefits.
A second suit was also filed, asking the court to order the chains to make payments into the fund to cover continuation of benefits, or COBRA, coverage.
Union representatives at a press conference outside City Hall said they believe the chains plan to renege on an agreement reached eight years ago to support the jointly administered benefits fund. At that time, according to allegations in one of the complaints, the unions agreed to a reduction of the $250 million reserve in the benefits fund in return for the employers’ agreement to “maintain employees’ existing benefits and to pay increased contributions to the extent necessary to fund such benefits.”
Greg Conger, president of United Food and Commercial Workers Local 324, said the chains are obligated to pay $40 million each month into the fund, but have indicated they may not make the Nov. 20 payment.
The first suit, in which six UFCW locals are plaintiffs, claims that employees who worked a specified number of hours in June and July are entitled under their 1999 contract to benefits coverage through the end of the year. Those who worked enough hours in September and October before the strike started are entitled to coverage through March, the suit alleges.
The first category includes most of the chains’ 70,000 unionized workers, attorney Michael D. Four of Schwartz, Steinsapir, Dohrmann & Sommers said. He accused the grocers of “using the dispute to bankrupt the health plan.”
UFCW Local 770 President Rick Icaza said the action also poses a threat to union employees who are not on strike but whose benefits come from the same fund, such as those at Gelson’s stores. Gelson’s has agreed in advance to accept the terms of the contract negotiated by the union and the three major chains.
The 1999 contract expired Oct. 5. Workers went on strike against Vons on Oct. 11, and Albertson’s and Ralphs locked out their UFCW-represented employees the next day.
The lawsuit asks the court to order arbitration of the dispute and to enjoin the three companies from “refusing to pay the contributions necessary to provide for continuing coverage.”
The COBRA suit names 11 individual striking or locked out employees as plaintiffs. It claims labor dispute is a “qualifying event” under the Employment Retirement Income Security Act of 1974, triggering the obligation of the benefits fund to support continued benefits. The employee health plan provides for two months of automatic COBRA coverage “without the need to make a formal election—or—pay and COBRA premium,” the complaint alleges.
A key issue in the labor dispute is the demand of the supermarket chains that workers to shoulder more of their healthcare costs.
The fund now has reserves of $31 million but pays about $45 million per month in claims and is in danger of becoming insolvent, according to the allegations of the COBRA complaint.
Copyright 2003, Metropolitan News Company