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ARTICLES:

Post-strike thoughts about the 2003
St. Louis Grocery Strike and Lockout
involving Schnucks, Dierbergs and Shop n Save

[Full disclosure: A close family member of mine is a non-union employee of one of the grocers, and I do not take cases against that grocer for that reason.]

Summary of this article

After giving a short history of the 2003 grocery strike and lockout, I present some analysis and predictions for 2007.

If things remain along the present path, the union should look for a worse contract proposal in 2007. The union grocers’ market share will have continued to slide, and health care costs will have continued to inflate. Something’s got to give.

The public will not be as supportive of a strike in 2007.

Over the next three years, the union and its members should help organize the local non-union grocers, particularly the Walmart-related companies, as their major strategic goal for long-term self-preservation. This would greatly increase the union’s bargaining power for the next round of contract negotiations.

* * * * * * * * * * * * * * * * * *

Preparing for 2007

The St. Louis grocery strike and lockout lasted from about October 7, 2003 until October 31, 2003. A new contract was agreed to, that will last only 4 years. We’ll do it all over again in 2007.

Since the strike is over, I would like to talk a little bit about what the union members have been facing, what they are in store for over the next few years, and make some predictions. Please keep in mind that this contract is only for 4 years. In about 3 years or so, the union and the grocers are going to have to begin talking about the next contract. Unless something interesting begins to occur in the community or economy, the union members are in store for a very rough time at the next round of negotiations. The signs are ominous and red flags are waving.

First let’s recap what happened

For those not in the St. Louis area, there was a major strike and lockout in play in St. Louis involving the three largest area grocers. The union, The United Food and Commercial Workers Union (UFCW), local 655, rejected the grocers’ latest contract proposal and voted to strike in October 2003. Pickets were set up at Shop n Saves, and then Schnucks and Dierbergs locked out their UFCW union members.

About 10,000 union workers were off the job most of October 2003, and pickets occurred at all St. Louis Schnucks, Dierbergs and Shop n Save stores.

The strike ended 10-31-03 after the Federal Mediation and Conciliation Service (FMCS) announced that it would be helping the union and the grocers resume talks. The FMCS is a government agency that tries to resolve labor disputes. When the FMCS is not too busy, they sometimes even conduct EEOC mediations, such as I describe in my article Mediation of employment cases.

Back in September 2003, the union negotiators and the grocers reached tentative agreement on a new contract after 6 months of hard negotiations.

On 9-15-03, the union president, Bob Kelley, sent a letter to the union members asking them to vote for the proposal, and claiming that the contract was going to be more costly for the grocers than the old contract. Here’s a link to the Bob Kelley letter – [I hope this link stays alive for a long time – – – update, PDF FILE No longer online, links to news articles now] Link 1 Link 2 Here’s the letter from union president Bob Kelley dated September 15, 2003 praising the contract proposal. The grocers published the Bob Kelley letter in the Post-Dispatch on Sunday October 12, 2003 (during the strike), in a full page ad.

October 7 (or so) – The union members rejected the proposed contract and voted to strike Shop n Save, despite Bob Kelley’s recommendation contained in the 9-15-03 letter. Schnucks and Dierbergs locked out their union workers. Pickets occurred at all three grocers.

During October 2003, it appears that the vast majority of regular customers stayed away, refusing to cross the picket lines. I’ve heard reported that maybe 70% to 80% of customers refused to cross the picket lines, and you know that must have hurt the grocers deeply. The grocers must have lost many millions in revenue, and a lot of customer goodwill. But strikes have limited lives, and the public gets tired, and it appeared that more people were starting to cross the lines as the strike drug on. However, the grocers didn’t like it that shoppers were going to non-union stores rather than cross the picket lines.

Union members were suffering from the lost pay as the strike dragged on.

The union and the public speculated whether the grocers were trying to break the union.

In the end, both sides needed to have the strike end. The grocers were losing too much money and customer goodwill, because the St. Louis community was refusing to cross the picket lines, and the union members were getting desperate for a paycheck. The question then became (this is the art of conflict resolution) – how to end the strike and let everyone save face?

In stepped the the Federal Mediation and Conciliation Service (FMCS). The parties agreed to meet with the FMCS, and the result was almost a foregone conclusion.

Anyone could have predicted what eventually occurred: Through the FMCS, a new proposal emerged that gave the union something to crow about, but also left the grocers with an argument that they did not cave in, so both sides could claim victory.

On October 31, 2003, the union voted to to approve of the new contract proposal and the strike was over. The ratification vote was lopsided, by a margin of 4 to 1, with about 4,000+ for the contract and 900+ against.

Here’s how both sides can claim victory. Link 1 Link 2 (original link gone) The grocers claim that the new contract merely moves money around, and doesn’t cost more (press release on the Schnucks website). I don’t have a link to anything official from the union listing the benefits of the new agreement, but the union has bragged in the press about some things: how the new contract eliminated workers’ annual health care deductibles (but maybe the trade off was that the workers have to pay more out of pocket for brand name drugs); a higher bonus for ratification and some modest additional pay increases (but maybe the trade off was that workers now will have to wait 21 weeks longer for some pay increases provided for by the original proposal).

So both sides can claim victory, and everyone goes back to work, and the grocers have to rebuild customer goodwill and loyalty, and the union members will have about 3 years before they have to begin this gut-wrenching negotiation process all over again.

Grocers will be even tougher in 2007

The next contract will be voted on in 2007, assuming the union and the grocers actually complete full negotiations.

The big question in my mind is: Will the grocers drive a harder bargain in 2007 than they did in 2003? Unless something changes favorably, the answer is YES, the grocers will drive a harder bargain than in 2003.

If the economic trends stay the same as they are in 2003, though, Walmart/Sam’s Club, Costco, and the other non-union grocers will continue to erode the union grocers’ market share.

Ask yourself: How likely is it that the union grocers will offer a better-paying contract in 2007, when their market share has further eroded from 2003 levels?

Right, it’s not likely the union grocers will offer a better-paying contract in 2007, if their market share has further eroded. It’s possible, but unlikely. It’s possible if costs can get cut somehow, or if the non-union grocers’ costs increase substantially.

So let’s be realistic: The union can expect a worse contract in 2007. Get ready for it. If nothing changes for the better, the union will be asked to accept lower raises, and an increased share of the costs of health care, and here we go again.

The union should make a four year plan
to work on getting the non-union grocers organized

The chief enemy of UFCW members is the non-union grocers and non-union stores like Walmart. Everyone knows Walmart hates unions and fights hard to prevent unions from getting started. Other non-union grocers are in St. Louis, and they might be more vulnerable.

The union grocers are, inevitably, going to lose more market share to the non-union grocers. The bleeding is not going to slow down until more grocers are organized, especially the Walmart family of stores. I suppose it’s possible that the union grocers could cut their costs so they could lower their prices substantially and still make a reasonable profit, but I don’t see how. If the union knows of some ways for their employers to substantially cut costs, then they should pass that info along to their employers.

I know the pain of unemployment, and 10,000 union workers in St. Louis were out of work during the strike, and will be out of work in 2007 if there is another strike. But such massive suffering is unnecessary in my opinion. I suggest the union devote their energies over the next 4 years to organizing the St. Louis area non-union grocers, especially the Walmart-related stores. Nothing will do more to improve the union grocers’ ability to compete than to organize the non-union grocers, negotiate generous contracts, and make those grocers raise their prices. The full-service retail grocers like Schnucks, Dierbergs and Shop n Save provide (in my opinion) a better grocery shopping experience than the non-union supermarkets, so the big union grocers can compete if the price differential can be reduced.

The grocery workers can drive a much harder bargain with the union grocers at the next contract talks, if they have had some success in
using their enormous human manpower resources to get the non-union grocers organized locally.

Pickets work if they are well staffed. If the union tried hard, it could put a lot of people to work picketing the local non-union grocers who were being targeted. A lot of people won’t cross picket lines. Half-assed organizing measures fail when the non-union companies fight hard, but intense commitment might work – the kind of commitment we saw during the grocery strike.

Will a strike be effective in 2007?

For a strike to be effective in the long term, the public has to understand and agree with the reasons for the strike. In the short term, as with the October 2003 St. Louis Grocery Strike, the public will not cross picket lines as a matter of courtesy and respect to unions. But as the strike drags out, people will lose interest.

In 2007, people will still have memories of the strike of 2003. When I spoke to people informally, people did not understand why the union was striking. People knew that the union was angry over having to pay a share of health care costs, but nearly everyone has to pay a share, and so people were not particularly sympathetic. People still wouldn’t cross picket lines, but deep down they questioned the basis of the strike. The union should expect less support from the public in 2007, if a strike occurs over similar issues.

Union activity and interest ebbs and flows

We are probably still in the ebb phase of the natural cycle of ebb and flow of union activity. Unions did great work for many years, setting the standard for pay and benefits. And as a result most big employers today provide decent benefits and somewhat reasonable pay to try to prevent a union from coming in.

A lot of union organizing activity fails today, because the public perceive unions as no longer necessary. As unionization continues to ebb, non-union businesses will cut back benefits and pay because the threat of unionization will be reduced.

At some point in the cycle, pay and benefits will get so bad that unions will resurge, and we will be in the upswing again, and a lot of new organizing activity will follow.

Maybe the unionization of Walmarts nationwide will be the sign that the upswing has begun. Maybe the grocery strike is a hint that workers have reached their limits, that things are bottoming out at least in this area, and a new wave of organizing activity will follow. If I had to predict, though, I would predict that things have not bottomed out yet.


***** END OF ARTICLE *****

Timslaw.com Missouri Employment Law

Maintained by Attorney Phil Willoughby
Founded by Tim Willoughby, Esq. (1959-2013)

Phil is a Missouri employment lawyer who is licensed to practice in Kansas and Missouri, and primarily takes cases in Saint Louis and Kansas City. He is a member of the Missouri Bar Association and Kansas Bar Association. Additionally, he has practiced in the United States Federal Courts of Missouri in St. Louis and Kansas City. He has also practiced in the Kansas Federal District Court in Kansas City, Kansas.

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