Grocers Agree to Overhaul Janitor Pacts, Pay
Leading supermarket chains in Southern California have agreed to reverse a decade-long trend of sub-contracting for or low-paid night janitors and will either hire back staff janitors or pay union wages.
The agreement marks a rare retreat in a nationwide movement toward the use of contractors and temporary agencies in a variety of industries.
Part of a four-year labor contract set to be ratified by members of the Service Employees International Union today, the agreement is expected to end practices that led to the filing of a class-action lawsuit and a series of criminal charges.
Investigations by state labor agencies and by the Los Angeles Times found that many subcontracted supermarket janitors were paid less than the minimum wage, cheated of overtime and worked six or seven nights a week under sometimes dangerous conditions. The majority were recent immigrants from rural Mexico.
The contract will cover about 2,100 janitors in Los Angeles, Orange, San Bernardino and Riverside counties and includes significant increases in pay and benefits. The current union rate of $9.71 an hour will hit $11 an hour by the end of the four years.
Participating stores include Ralphs, Vons and Albertsons. The union expects the agreement to boost dues-paying membership from about 700 to nearly all the covered janitors.
“Definitely in this industry the pendulum swung too far to the quasi-criminal aspects of contracting,” said David Stillwell, who helped negotiate the master contract for union Local 1877. “I think the revulsion about what was going on there really caught people by surprise.”
Ralphs was the first of the three major chains to agree to stop outsourcing and to bring contracted janitors up to union wage levels.
The union “did bring up some good points,” Ralphs spokesman Terry O’Neil said. “Pretty quickly after that, we decided it was just in the best interests of our employees to reach this agreement... We pride ourselves on our reputation of being an employer that treats its employees with utmost respect, and we didn’t want to see that reputation eroded at all.”
Last week, the Los Angeles district attorney’s office filed felony charges, including “theft of labor,” against two supermarket subcontractors, Cindy’s Cleaning and American Unique. The charges allege that 19 named janitors were “grossly underpaid” and were forced to work without breaks or days off, said Barry Gale, deputy district attorney for workers’ compensation. There were also allegations of underpayment of taxes and workers’ compensation insurance premiums. Company officials could not be reached for comment.
Gale said similar charges are expected to be filed against numerous other subcontractors in coming months. “It’s very sad,” Gale said. “These people are really being abused.”
The city attorney’s office filed misdemeanor charges last week against another supermarket contractor, Maintenance Solutions, for failing to pay five employees a total of $14,000. Company officials could not be reached.
All three subcontractors provided services through a fast-growing national building maintenance firm, Encompass Services, which is traded on the New York Stock Exchange.
Encompass and the three major supermarket chains were named in a lawsuit filed by private civil rights attorneys and the Mexican American Legal Defense and Educational Fund in December on behalf of 600 janitors. The suit, which is seeking class-action status, alleged the markets “implemented a scheme to evade responsibility for janitors’ wages and job benefits by pretending to hire janitors indirectly through a contractor.”
Encompass officials could not be reached for comment Thursday. But at the time the lawsuit was filed, spokeswoman Jeanne Buchanan said the company’s subcontractors are required to comply with federal and state laws. “Encompass takes its obligations under the law very seriously,” Buchanan said.
Outsourcing for janitorial and other business services more than doubled in the 1990s as companies looked for ways to cut costs. It became increasingly common in the supermarket business after a wave of mergers left chains with large debts. Although outsourcing is not necessarily bad for workers, legitimate contractors complained they were being squeezed out of the market by unscrupulous competitors.
Albertson’s Inc., which led the outsourcing boom in California, has moved nearly 80% of its janitorial work force to contractors. Vons Cos. outsourced more than half of its stores. Ralphs Grocery Co., which picked up the trend two years ago, had outsourced fewer than 25 of its 350 stores in Southern California.
Stillwell said Ralphs came to the bargaining table with an offer to bring most janitors back in-house and pay the remainder comparable wages. Vons later agreed to a similar deal, although more of its janitors will be outsourced to union wage contractors. Albertsons, the last to sign on to the deal, will continue to outsource most janitorial work but will pay a premium wage to those janitors.
As of last year, the three major chains said they were unaware of labor violations in their stores and said the outsourced janitors were not their employees. Mike Garcia, president of Local 1877, said this contract reestablishes that chain of responsibility. “We clearly got them to recognize that these abuses were actually happening, and that they were responsible,” Garcia said.
However, Debra Lambert, director of corporate communications for Safeway Inc., which owns the Vons chain, said Thursday, “We were not aware of any specific problems. There’s a lot of conjecture, and we felt this was the best approach to take. We just felt it was the appropriate thing to do.”
The contract also covers janitors working for the smaller, upscale chains of Gelson’s Markets, which never outsourced janitors, and Stater Bros. Markets, which bought 43 Albertsons stores in 1999 that used janitorial contractors. Soon after acquiring the stores, Stater Bros. moved janitors to staff or hired union contractors, Chairman Jack Brown said.
The union contract helps level the competitive field with the larger chains, Brown said. “We think it’s doing the right thing for the right reasons,” he said. “All employees who work in a supermarket should be able to support a family. They’ll probably get a better-quality employee as a result.”
The move to union wages will be phased in over the first two years of the four-year contract, if employees ratify the agreement as expected this morning.
