Friday, September 26, 2008

News & Analysis: Employees At Two More Fresh & Easy Grocery Stores Could Soon Request UFCW Union Recognition From Tesco's Fresh & Easy

Employees of at least one and possibly two additional Fresh & Easy grocery stores could soon request formal recognition from the company to become union stores. Beyond that though, what might a union contract between Fresh & Easy employees, the UFCW union and Tesco's Fresh & Easy Neighborhood Market actually look like?

On September 17, we wrote and published this piece about store employees at a Tesco Fresh & Easy Neighborhood Market grocery store in Huntington Beach, (Southern) California formally requesting union representation at their store. The employees sent a letter to Fresh & Easy Neighborhood Market CEO Tim Mason requesting this formal union recognition and affiliation with the United Food & Commercial Workers (UFCW) union.

Thus far, Tesco has not replied to the employees letter. A Fresh & Easy Neighborhood Market spokesperson has said the company is evaluating the letter and request. However, there has been no public statement to date on the Huntington Beach store employees request to be recognized as a union shop from either Tesco Fresh & Easy CEO Tim Mason or Tesco PLC. CEO Terry Leahy.

Fresh & Easy Buzz has now learned employees of two more additional Fresh & Easy stores could soon be making a similar request to Tesco's Fresh & Easy Neighborhood Market to be recognized as UFCW-affiliated union stores. Both of the stores are located in Southern California.

At least in one of the two stores, the initial impetus for generating union interest among employees came from a UFCW member who has been working at that store for many months, which is similar to the tactic the UFCW used at the Huntington Beach store, as we reported in our September 17 story.

In that instance, Graham Ozenbach, a UFCW member on leave from his job at a Southern California Vons supermarket (Vons is owned by Safeway Stores, Inc. and is a unionized chain), had been working undercover at the Huntington Beach Fresh & Easy store since December, 2007.

In addition to Mr. Ozenbach, there are additional UFCW organizers working in Fresh & Easy grocery stores as part of the union's strategic plan to unionize the grocery chain's store-level employees.

Employees at one of the two additional Fresh & Easy stores could request within weeks to be a union store in the same way the Huntington Beach store workers did about two weeks ago.

The other Fresh & Easy store is not as far along in terms of there being a consensus among store employees to do so.

Should employees at a second and possibly third Fresh & Easy grocery store request formal UFCW union affiliation from Tesco's Fresh & Easy Neighborhood Market, it likely will increase the pro-unionization pressure on the retailer, since having employees at just one store (Huntington Beach) do so could allow Tesco to argue its merely an exception -- that employees at the grocery chain's other 86 stores aren't asking for it. But having employees at a second and then third store request union status begins to look more like a movement or a trend towards the unionization direction.

UFCW organizers know getting employees at a second Fresh & Easy store to request union recognition is key, which is why they are working very hard to do so.

U.S. labor laws allow Tesco to deny the request by the Huntington Beach store employees -- as well as by employees at any other Fresh & Easy market -- to be recognized as a UFCW-affiliated union store.

If Tesco does deny the request, the store employees then must, with the UFCW's assistance, submit a petition for unionization. Once that is done, the store employees can then hold an open ballot vote. If a simple majority of store-level employees vote in favor of joining the UFCW in that election, the store then will be certified as a union shop under U.S. labor regulations and laws.

Still would need a contract

However, if passed and unionization is certified, that doesn't mean the Fresh & Easy employees would automatically start getting the same pay and benefits workers at unionized Southern California supermarket chains like Vons, Ralphs, Albertsons, Stater Bros and others get.

Instead the UFCW and Tesco's Fresh & Easy Neighborhood Market would have to negotiate and agree on a labor contract between the two parties. This can be a very long and complicated -- as well as contentious -- process.

In Southern California, as in most parts of the U.S., the region's supermarket chains generally operate under the same contracts with the UFCW. When a previous contract is up, the union usually negotiates with a region's top two or three chains. Once those chain's agree on a new contract with the union, the region's other chains and unionized independents generally adopt that contract as well.

We say generally because in the last round of UFCW-supermarket chain negotiations in California, it was two regional chains -- Stater Bros. in Southern California and Save Mart in Northern California -- that were the first to sign contracts with the UFCW ahead of Safeway Stores, Inc. and Kroger Co. (which owns the Ralphs chain in California), which are the two largest unionized supermarket companies in California.

Different formats equal different job descriptions

Since there are major qualitative format and operational differences between Tesco's Fresh & Easy and all of the unionized supermarket chains in California, we expect if Tesco does ultimately allow its store-level employees to be represented by the UFCW, the Tesco-UFCW contract will have to look different than the union's current Southern California supermarket chain contracts look.

All of the unionized supermarket chains and independents in California generally have the following in common: They are standard-sized (and larger than standard) supermarkets; they offer full-service checkout and bagging for customers; carry an extensive selection of products requiring lots of hand stocking of shelves by employees; cut meat from primal cuts into case-ready cuts right in-store; and merchandise bulk produce (with some pre-packaged), which requires lots of prep work by store produce department employees.

On the other hand, Tesco's Fresh & Easy grocery markets have self-service customer checkout. Store employees are instructed to assist customers with the checkout if they ask. But cashiering isn't a major part of a Fresh & Easy store employees' job description like it is for employees who work in a unionized supermarket.

Additionally, all of the fresh & easy store brand grocery products, which represent about 60-65% of all the grocery category products merchandised in the stores, arrive at the Fresh & Easy stores from its distribution center in cases that are "shelf-ready."

Rather than having to cut open each case and stock it on the shelf as is the case at unionized supermarkets, the Fresh & Easy store employees zip open the case and stock the full case onto the store's warehouse-style shelving. There's no taking an item out of the case one at a time and stocking it on the shelf as is commonly the case at unionized supermarkets, with the exception of those unionized warehouse format stores (which are a small percentage) that use tray packing.

The Fresh & Easy store employees do have to traditionally cut open the non fresh & easy brand grocery product (about 35% of the products) cases. But they too are tray-packed on the shelves, which requires far less work and time than hand stocking does.

All fresh meat items, and about 95% of all of the fresh produce items, arrive at the Fresh & Easy grocery markets pre-packaged. All the store clerks do is open the cases and stock the meat and produce cases with the already packaged products.

As such, Fresh & Easy stores have no departmental structure like the unionized supermarkets do. These stores -- Safeway, Vons, Ralphs, Stater Bros. Albertsons and the others -- operate the meat and produce departments departmentally. Meat department workers just work in that department, same with produce, bakery, general merchandise and deli. The largest department being grocery, which includes checkout and essentially everything else except the departments mentioned above.

The meat department workers in the union supermarkets cut meat from boxed primal cuts (very few if any break down entire sides of beef anymore, although some still do) into roasts, steaks and other case-ready items, grind meat like hamburger, and do other cutting tasks, along with wrapping most of the cuts in the meat department. [There is a separate classification at lower pay for "meat wrappers." many of the meat cutters wrap as well as cut though.]

Additionally, many of the union supermarkets have full-service meat cases along with self-service, which mean customer service can be another part of the job.

Unionized produce department workers also do much prep work, unloading cases and bins of produce, trimming and preparing bulk produce before stocking it in the department, and building fresh bulk produce product displays in the stores.

The work of the majority of union meat cutters and produce clerks therefore is far different and considerably more extensive than what workers at Fresh & Easy stores do regarding the two fresh categories. This is by Tesco's design of the Fresh & Easy format, which has at its core centralizing much of the replenishment functions at its distribution center, thereby minimizing store labor.

What a potential conract might look like

As a result of these differences in format between Fresh & Easy stores and the vast majority of unionized supermarkets in the U.S. -- which results in Fresh & Easy store workers having qualitative and quantitative differences in their job descriptions and duties compared to the majority of unionized supermarket chain workers -- it's our analysis that if Tesco does eventually go union with Fresh & Easy -- as it is union-affiliated in nearly every other country in the world where it has stores -- it's probable Fresh & Easy store workers will operate under a different contract than the UFCW has with the region's unionized supermarket chains.

It's also probable such a contract would include lower wages than the Vons, Ralphs, Stater Bros. and other supermarket chain employees receive, along with less of a health benefit package than these union supermarket workers get under the contracts with these chains.

There already is precedent for this. The UFCW has different classifications (we mentioned a couple earlier) with the unionized supermarket chains mentioned above.

The main union classification is for a grocery clerk, the primary job description of which is to check out customer purchases at the front end (grocery checkers) of the store and to stock shelves (grocery stockers) and do related merchandising duties. These are the grocery clerks, along with most of the produce clerks and meat cutters, that in California make about $20 an hour after a full year or so of work experience in the union.

However, there are other store classifications, including courtesy clerks, who's job description is limited to bagging groceries, doing store cleanups, putting "go-backs" back on the store shelves and a few other limited duties. These workers make considerably less an hour (although more than the $10 an hour ($9 in NV and AZ) Fresh & Easy pays all its Southern California store employees accept for the store manager and assistant manager) than grocery clerks do under the union contract, although they get the same benefits package.

There also are "general merchandise" clerks. These store workers work strictly stocking items that fall under the general merchandise and health and beauty aid categories. They aren't permitted under the union contract do work in any other areas of the store or to stock items onto the shelves in any other categories.

Our analysis is the ultimate make-up of a UFCW-Tesco Fresh & Easy contract would be a hybrid of the existing contracts the union has with the supermarket chains and something new, which would likely include a different categorization of Fresh & Easy workers.

This categorization/job description would in our analysis probably look something like a combination of the union grocery clerk, courtesy clerk and general merchandise examples above.

We also believe it would be a combination of the three hourly wage scales for each of those union supermarket job categories. In other words, Fresh & Easy store employees would likely make less hourly than workers in the grocery clerk classification who work at Vons, Ralphs and the other union chains currently do.

As far as we can discover, Fresh & Easy Buzz is the first publication to mention and discuss this aspect of the UFCW-Tesco Fresh & Easy ongoing union issue. We do so because we think its not only news -- but is an important element of this ongoing story.

There's a perception -- and in many cases we've noticed an assumption -- among many people that if Tesco's Fresh & Easy does go union, it will be the same contract as what currently exists among the UFCW and the various supermarket companies in the region.

Our analysis is that such an assumption is incorrect, along with such a perception. Rather, it's likely if Tesco's Fresh & Easy eventually does become unionized -- which we suggest one shouldn't assume will happen anytime soon or at all -- it will end up having a different contract -- with a lower wage scale -- with the UFCW than is currently the case with the contracts the union (and union supermarket workers) has with Southern California's unionized grocery chains and independents.

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