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.

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.