Wednesday, September 17, 2008

Store Workers at Huntington Beach Fresh & Easy Demand Union Recognition From Tesco Fresh & Easy Neighborhood Market

The United Food & Commercial (UFCW) Workers union, which represents nearly 1.5 million unionized supermarket clerks in the United States, Canada and Puerto Rico, looks to have achieved its first major break in terms of its campaign to unionize store-level workers at Tesco's Fresh & Easy Neighborhood Market USA, which operates 82 stores in Southern California, Nevada and Arizona.

Store employees at Tesco's Huntington Beach Fresh & Easy grocery market in Southern California have banded together as a group and are demanding to be recognized by the retail chain as a union store, according to Greg Conger, the president of UFCW local 324, which is based in the nearby city of Buena Park and represents about 25,000 union food and grocery clerks in Orange County, Southern California.

Additionally, Fresh & Easy Buzz spoke to two workers at the Huntington Beach store who also said the store's employees want to be recognized by Tesco Fresh & Easy Neighborhood Market as a union shop. The store employees said they've submitted a formal letter to Tesco Fresh & Easy's senior management requesting UFCW union recognition. Tesco's Fresh & Easy is headquartered in El Segundo, in Southern California.

Getting workers at one store to vote on and to agree as a majority to become unionized is the common first step the UFCW takes in unionizing an entire chain.

Southern California's major supermarket chains, Safeway-owned Vons, Kroger Co.'s Ralphs, SuperValu's Albertsons, Stater Bros. and most others, including most major independents, are union retailers.

Like Tesco's Fresh & Easy, Wal-Mart stores are not unionized. Other major non-union food and grocery retailers in Southern California include: Trader Joe's, Costco, Whole Foods Market, Inc., Henry's Marketplace and Sprouts Farmers Market.

The way the system works is that Tesco's Fresh & Easy will either recognize or refuse to recognize the Huntington Beach store employees as a union shop.

If the company does recognize the workers' request to be unionized, that likely will open the door for employees at other Fresh & Easy grocery stores to organize at their stores and request similar recognition as union shops.

If Tesco senior management does not recognize the Huntington Beach store employees formal request to join the UFCW, and to be paid and given benefits in line with the contracts the union has with other area chains, our UFCW national sources tell us that Tesco Fresh & Easy Neighborhood Market will be in for a major fight, since it is the store workers who are requesting to be unionized.

Tesco's position -- and public statements -- regarding the campaign by the UFCW to unionized its store-level employees have all along been that it is up to the store workers to decide if they want to be unionized.

Since the Huntington Beach store employees have made that decision, asking for formal recognition, it's going to be difficult for Tesco to not allow it, based on its public position. There are numerous published comments from Tesco Fresh & Easy CEO Tim Mason and spokesman Brendon Wonnacott saying the company's position on the union issue is just that -- that it is an employee decision.

Additionally, If Tesco denies the Huntington Beach store employees' formal request to be recognized as a union shop, which we think is likely, the workers and the UFCW can then hold an election among the store workers under supervision by the U.S. National Labor Relations Board. This is what is known as an open ballot union election.

According to U.S. labor laws, if a simple majority (50%) of the store-level workers vote in favor of being unionized through the UFCW, Tesco must then recognize them.

Our analysis is that Tesco is likely to reject the request from the Huntington Beach store employees for union recognition, forcing the open ballot election.

U.S. labor laws allow employers to meet with employees prior to such elections and try to convince them not to join the union, offering arguments as to why doing so would be the wrong thing to do. Those same labor laws also allow union representatives to meet with employees prior to the election, describing to them the benefits of Joining the union.

There's even an industry that's grown up around this law and policy. That industry involves experts in labor relations who are hired by companies to create campaigns designed to persuade employees not to join the union. These consultants meet with employees and give presentations approved by the employer and designed to convince the workers to remain non-union.

In an interesting twist to the Huntington Beach employees wanting to be recognized as a union shop, The UFCW has been using "undercover employees" at Fresh & Easy stores as a part of its organizing campaign for some time. It was one of these union operatives, Graham Ozenbach, who has worked at a Vons store in Southern California for about 20 years, who was instrumental in helping to organize the Huntington Beach Fresh & Easy store workers, according to the UFCW's Conger.

Mr. Ozenbach, who is on leave from the unionized Vons supermarket where he earns about $21 an hour, started working at the Huntington Beach Fresh & Easy store in December, 2007, earning $10 hour as a clerk. That's the starting hourly wage Tesco pays all of its store-level employees, who are part time except for the manager. His goal: organize the store's employees.
Fresh & Easy Buzz can report Graham Ozenbach isn't the only UFCW undercover Fresh & Easy store employee among the workers in the chain's 82 stores. There are others.

In fact, we also can report the employees at more than one other of those Fresh & Easy stores, besides Huntington Beach, are close to formally requesting union status from Tesco like that store's employees have.

We also can report that a group of UFCW union members and an allied coalition in the San Francisco Bay Area are preparing a major organizing drive which will include targeting potential Fresh & Easy store employee applicants before they're even hired, and before the first of what we've thus far identified as an initial 22 Fresh and Easy grocery stores even open in the Bay Area.

Tesco has confirmed 18 of those 22 stores. We've reported on four additional store locations; two in the city of Vallejo, one in Pacifica, and one in Seaside near Monterey. Tesco also has confirmed 19 stores for the Sacramento/Vacaville region in Northern California. We've identified an additional two -- one in Farfield and another in nearby Suisun City.

The San Francisco Bay Area is arguably the strongest union region in the United States, particularly in the supermarket industry. All of the region's chains are unionized, as are nearly all of the multi-store independents. Even nearly all of the larger-sized single store independent grocers in the Bay Area are union shops, affiliated with the UFCW.

Wal-Mart, which has very few combination food and general merchandise Supercenters or other stores in the Bay Area, in part because it isn't unionized, Whole Foods Market, Inc., Trader Joe's and Costco are about the only major retailers in the region that aren't unionized.

Tesco's Fresh & Easy Neighborhood Market pays its store level workers, except for the manager and the assistant manager (who starts at $13 an hour) a starting wage of $10 an hour. We asked a Fresh & Easy spokesman in the past if the company has an automatic wage increase step, like unionized supermarkets do, but have been told the retailer doesn't release that information.

All store-level Fresh & Easy employees work part time, accept for the manager and in some cases the assistant manager, who is called the team leader. Employees working 20 hour or more a week receive health insurance. Tesco's Fresh & Easy says it pays 75% of the cost of the plan, with employees picking up the remaining 25%.

The retailer also offers a 401-K retirement plan, with an employer match.

Unionized supermarket clerks start out at an hourly wage a bit higher than $10 an hour. However they get hourly wage increases about every three months, topping out after one year's of service (based on hours worked) at about $20 an hour for a "Journey-level retail clerk.

UFCW members also have among the best health plans of any worker in the United States. The employee contributions are minimal, and the co-pays and prescription drug costs are among the lowest of any employee sponsored plan.

UFWC unionized supermarket clerks also have a defined benefit pension plan, which the union operates along with the individual supermarket chains. A union grocer clerk in California retiring after 30 years service can make as much as $40,000 a year in pension payments. This is on top of Social Security.

It's also in addition to any other retirement plans an employer might offer, such as the employee discount stock purchase plans offered by Safeway Stores, Inc, SuperValu and Kroger Co., or the profit-sharing plans offered by a number of privately-held supermarket chains in California and elsewhere in the U.S.

Don't be surprised if another group of Fresh & Easy store-level employees soon requests union recognition like the Huntington Beach workers have done. Stay tuned.


Tom said...

I don't know how I feel about the unionization. In my experience as being a Teamster [mandatory] there was very little benefit for a very high cost. I felt that the union did little to protect part-time employees and instead was usually only used as a crutch for people who didn't do their job.

Am I the only one who doesn't see a part time job at a general clerk at grocery store as a long term career? I do believe that some professional union organizations are beneficial for providing better services, however, I don't really see how a union at the grocery store helps to provide a better customer experience.

Any thoughts?

John said...

I agree with Tom. In times like these where most of us are having a hard time dealing with expensive gas and food prices, these union actions are counterproductive. If it's a $10 job, that's what it should cost to service the customer. By artificially inflating labor costs these unions are really hurting those of us who need the most relief. This isn't the industrial revolution era in London. These unions lack consideration for their neighbors and with actions like these resemble al quaeda more than anything else.

Anonymous said...

"There's even an industry that's grown up around this law and policy."

Yes, and it's called "Union busting" - viewed back in Tesco's homeland (the UK) as one of the USA's more reviled exports.

"I don't really see how a union at the grocery store helps to provide a better customer experience"

Well it certainly does in my shopping experience on the East Coast - I get a much better experience in "union" store than from the morons in Shoppers

Anonymous said...

John, union grocery clerks make about $20 hour after one year's experience. That's one year full- time and could be two or slightly more years for part timers.

What chart are you using to determine that $20 an hour after this experience is an inflated wage for a grocery clerk? Or that it is "a $10 hour job.?

Their job responsiblilities include a combination of phyical labor like unloading trucks, hauling freight around and stocking shelves. Spend an 8 hour night shift stocking shelves (the chains require each employee to stock a certain amount of cases per shift) then tell us you aren't worth $20 hour

Their job responsibilities also include checking out customers, which requires lots of repetitive motion, along with 8 hours of polite and friendly customer relations.

The have other tasks and responsibilities as well.

Since when is $20 an hour an inflated wage. That's $800 a week gross or about $3,200 month...less than 40-k year gross. After's actually below the median wage of U.S. workers.

And..making an analogy between that terrorist group and what it did to the people in the Twin Towers, in the Pentagon (where my cousin was killed) and in the field in Pennsylvania is the most moronic thing I've heard in a long time. Shame on you for that.

It's cool to disagree on the issue but using that analogy really kills any credibility you have.

Anonymous said...

Canada has similar labor laws as the U.S. Some years ago store employees at a Wal-Mart in the country voted to unionize. Wal-Mart closed the store to prevent it, saying they closed it because it was doing poorly. I think you wrote about it in the blog sometime back. The Canadian Supreme Court ruled about a month ago that the issue and court case about the closing and union must be heard again by the lower court here. Will be interesting to see if Tesco takes a similar tack with that store in California.

Michael in Canada

John said...

"Anonymous", first of all, do you even know how F&E even operates? The customers scan and bag their groceries themselves thereby eliminating unnecessary costs. There are plenty of people who are physically able to stock shelves although it is in nobody's interest for this to become a lifelong career. It's a $10 an hour job to help a teen or student pay for gas and an ipod. I know because it's what I used to do and this was never going to be a career for me or any of my coworkers.

If you are rich and want to waste your money, go to a grocer that stands behind a counter and slices your meat and a baker that rolls your bread. I need an affordable option and as a customer I am willing to go the self-serve route if that is going to save me a few cents.

And unions often use unethical (as in this case) and illegal tactics to bully honest business owners and managers. I know firsthand that they have often threatened the families of reputable managers by phone, mail and in person and for the most part have long outlived their purpose. Unions are corrupt, have historical ties with organized crime and do more harm than good. While you, "Anonymous" may have not been a target of union terrorization, too many of us have and their actions speak louder than the words of theur defenders.

Anonymous said...

The law says the store employees are entitled to an open ballot vote. Fresh & Easy has said it's up to the store employees if they want to join a union. So, let Demoncracy go forward and let them vote on it in the secret ballot election.

Anonymous said...

John, Costco and Wal-Mart (both not union) scan and bag my stuff for just as cheap prices as F&E, who I shop at too.

Trader Joe's (non-union) does the same...just as cheap.

Vons and Ralphs Foodsco (both union) in Southern Cal also is often as cheap or cheaper than F&E and even Wal-Mart, especially shopping the weekly ads. They scan my groceries, bag them and would even take them out to the care if asked. I don't ask but sometimes my wife does with a big load and with the kids.

Therefore, the self checkout argument as equaling cheaper is wrong.

It is merely one of the variables Tesco is using as part of its low-cost structure. And yes, I am very familiar with F& I am a vendor to them and numerous others.

From that "anonymous" who's first name is James.

John said...

James, American groceries are inefficient and expensive. Why do you think the cheapest of them all, Wal-Mart, suffered billions and billions of financial losses when they tried to take on Aldi on their home turf in Germany. Go to the restaurant in Ikea and you will see a kind sign informing the customer that prices are kept low because customers help out.

Retailers in the US have inefficient models that impede their competitiveness, like the ridiculous wasteful practice of double-bagging and having employees collect shopping carts instead of using the token deposits common in the rest of the developed world. I say put the focus on the customer because in the end he is the reason everyone in the store and supply chain make a living.

I'm sure Aldi loves this situations because in the next decade they will redefine value in this country.

I pump my own gas and recycle my CRV bottles in Replanet machines because I can, it's good for my wallet, the environment, and my conscience. I was hoping Fresh and Easy could be an alternative to the old fashioned retailers but it looks like in the meantime the US customer still has no say. Sad.

Anonymous said...

John: There are all sorts of alternatives to traditional and even non-traditional retailers in the U.S. For example, we buy most all of our produce from the two farmers markets in town. Bring our own reusable bags. We save about 20% off supermarket prices at these FM's.

We also buy lots of our meat through a butcher who offers economy packs. The upfront cost is higher than shopping for meat once a week but we save 25-30% overall on meat doing this.

We also buy most of our household supplies at dollar stores, both chain and independent. We get every item for a dollar. Who cares if window cleaner is Windex or brand X. It all works the same. We save about 50-60% doing this. These stores, especially the independent ones, also have lots of grocery items for a buck. We load the pantry when they have what we want. For example, yesterday they had Dececco Italian pasta for 75-cents a box. It costs $1.99 or more a box at the supermarket. Bought a dozen. They had Campbell's chix broth for 50-cents a can, a 75% savings...and on and on

We also shop at Grocery Market, which is a slavage grocer. All products are in 100% condition, just close-outs and items with label mistakes. Save a minumum of 40% there.

After shopping this way we have very little left to buy at the supermarket.

These are all alternatives to the traditional American supermarket, right in America. And there are even more options than these.

Anonymous said...

As a consumer I really don't care if a store is union or not. That's between the owners, the union and employees. What I do care about are good prices, decent service, courtesy, variety of products, fresh product, and a few other things. Regarding prices, Whole Foods is non-union and its prices are high. Costco is non-union and has good prices. Savmax and Food4Less, discount supermarkets where I live, are union and have great prices. So, don't think union/non-union and prices are linked.


Anonymous said...

How to keep the union out? Raise the starting wage from $10 hour to $12 hour in California and $11 in Nevada and Arizona. That's about what Wal-Mart pays. Add a plan in which employees can buy Tesco stock for a substantial discount. Up the employer contribution to the 401-k plan a bit. Offer dental and vision coverage as part of the employee health plan. Offer some creative incentives like Whole Foods does; incentives that can't be offered in a union supermarket. Tie all this to the employees not going union. Has to be real and sincere. None of the regular F&E spin.

Anonymous said...

Close the store.

Thank the analyzers for pointing out that their stores are doing poorly (based on no official figures.)

What's one store if it sends out a strong message to the rest of them?

Unions for grocery stores? $20 for packing begs? Don't make me laugh!

Anonymous said...

I just took a job at a new Wal-Mart Supercenter. The starting pay is $11.64 hour. THey pay more in other parts of the country than that. The benefits are the same as what Fresh & Easy offers. I know because have a freind who works at one of those stores. I would say since Fresh & Easy is paying $1.64 less an hour than Wal-Mart, which gets a bad rap for what it pays, they certainly should think about raising the hourly pay. Paying $1.64 an hour less than Wal-Mart isn't something to be proud of.