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How the Supermarket Strike Was Settled

Times Staff Writer

While most of California slept, the longest supermarket strike in U.S. history was settled in Steve Stemerman’s hotel room.

It was 3 a.m. Feb. 23 when Stemerman, the United Food and Commercial Workers union’s lead negotiator, and one of his colleagues huddled at the Hyatt Newporter with representatives of the three national supermarket companies whose insistence on slashing their labor costs had persuaded the union to strike.

The five men had been bargaining in various locales at the Newporter for 13 straight days, on this day alone for more than 13 hours. They were haggard, fed up with room service coffee and casually dressed; any need for ties had long since passed.

Moments before they shook hands on a deal, Stemerman had noticed that two of the supermarket reps were sitting on the bed, and he couldn’t resist joking about “the union getting into bed with the employers.”

Many of the tens of thousands of grocery store workers returning to their jobs would probably see more than a grain of truth in that teasing remark. The contract the negotiators crafted has been widely viewed as a victory for the supermarkets, especially because it includes a two-tier system under which stores will pay new hires much less in wages and benefits than veteran workers.

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But an inside look at the long-running contract talks shows that for all of the supermarkets’ gains, the UFCW hung tough and scored a few points, too. Veterans won’t have to pay for part of their healthcare coverage for at least two years, and the supermarkets lost their bid to significantly pare workers’ overall healthcare and pension coverage.

“We achieved more than we ever expected we would,” said a union official, although he added, “I’m not saying we didn’t compromise on benefit levels.”

The 59,000 union members who went on strike or were locked out in October never knew how their officials were faring during the 4 1/2-month ordeal. Peter J. Hurtgen, the federal mediator brokering the talks, imposed a news blackout that was generally honored.

It wasn’t until three days after the five men shook hands in Stemerman’s room that the settlement deal was finalized and made public. UFCW members ratified the contract over the last weekend in February, and in recent days have begun going back to their jobs at 852 Albertsons, Ralphs, Vons and Pavilions stores in Central and Southern California.

From interviews with negotiators and others, all of whom asked not to be named, The Times pieced together what occurred as the UFCW struggled for 20 weeks to ink a settlement with the supermarket companies: Safeway Inc., parent of Vons and Pavilions; Kroger Co., which owns Ralphs; and Albertsons Inc.

Union officials had expected contract talks to be difficult, but once negotiations started they were surprised at how intransigent the supermarkets were. The companies were committed to installing the two-tier system and wanted to cap their contributions to workers’ healthcare plans at a set amount.

For their part, the companies believed that the UFCW thought a strike leading into the holidays would cripple the stores. Union officials “couldn’t wait to get the strike started, because they thought it would bring us to our knees in less than two weeks,” one person close to the supermarkets said.

The talks were at times taxing, confusing and unwieldy. Negotiators spent weeks away from home. Many had to decide whether to buy new clothes or keep paying stiff hotel fees for laundry service. During some marathon sessions, participants would slip away for 15-minute catnaps in their rooms.

With seven union locals, three supermarket chains, a mediator and support staffs involved, more than 40 people often were assembled for a bargaining session under one roof.

And the roof kept changing. Unable to make advance reservations, the teams could tie up a hotel’s conference rooms -- and book rooms for each member -- for only so long. During the final 16 days of continuous talks, the teams moved from the Sheraton in Cerritos to the Hyatt in Garden Grove and, finally, to the Hyatt in Newport Beach.

“We were like Osama bin Laden,” one team member said. “We kept moving every four days or so.”

As the strike and lockout dragged on, and negotiating sessions were held in fits and starts, the costs mounted on both sides. Grocery workers tried to live off dwindling strike-pay funds and the supermarkets together were racking up about $10 million in lost sales every day.

But at the table, negotiators kept their cool. No one stomped out of the room or swore at an opponent. Despite the financial weight on union members, “there was never pressure to get this done at any cost,” one UFCW official said.

Sometimes when bargainers were alone with the federal mediator, “it did get a little raw toward the other side,” one participant said. But at the table, another said, “there was nothing resembling hard feelings directed at any individual.”

The dispute began the evening of Oct. 11, when the UFCW struck Vons and Pavilions. The next day, Ralphs and Albertsons locked out their union members in solidarity.

The two sides had met at the Anaheim Hilton on Oct. 11, taking a last stab at heading off a strike. Stemerman was there, as was Larree Renda, a Safeway executive vice president and a top lieutenant of Safeway Chief Executive Steven Burd.

When the meeting broke up, the tone in the room was, “ ‘Everybody hang on. It’s going to be a wild ride,’ ” one person who was there said.

As both sides dug in, it became clear the shopping habits for millions of consumers would be disrupted for months to come. Negotiations were sporadic as Halloween and then Thanksgiving came and went.

On Dec. 2, the stores made an offer -- including the two-tier system the union then refused to accept -- and a subsequent week of talks proved fruitless. On Dec. 19, the UFCW arrived at the Hyatt in Garden Grove with its own offer; there would be a two-tier system but it wouldn’t be permanent, as new hires could eventually work their way into the higher level of wages and benefits. The stores said “no” and didn’t make a counteroffer.

“So then we had the choice to stay there and bargain with ourselves, so to speak,” one union official said. “We chose not to.”

There were no formal talks for seven weeks after that. But there were unofficial discussions over the phone and via e-mail. There also were some undisclosed face-to-face meetings, one at the Argent Hotel in San Francisco on Jan. 7. The union team included Rick Icaza, president of UFCW Local 770 in Los Angeles, and Greg Conger, president of Local 324 in Orange County. The stores’ side included their negotiators and Kroger’s general counsel, Paul Heldman.

Then there was a twist: another secret meeting the following week, in Denver, between representatives of the supermarkets and officials of the UFCW’s International body -- the seven local presidents weren’t invited. Leaders of the International knew the presidents “were going to be, in some cases, outraged about the fact that the meeting occurred without them,” one participant said.

Although negotiating sessions usually included an International representative, it seemed that the International wanted to hear for itself where the supermarkets stood and whether a deal could be made. People on both sides said the Denver meeting at least set the stage for resuming formal talks.

Before that could happen, the UFCW locals called a news conference Feb. 4 to unveil “a dramatic” overture: an offer to submit the dispute to binding arbitration, in which both sides would live by the decision of a third-party arbiter.

The stores couldn’t say “no” fast enough, and few people were surprised. Given how tough a stand the supermarkets were taking, they had more to lose with arbitration than the union, analysts said.

Then the supermarkets, which had kept their public comments about the strike to a minimum, stunned the UFCW locals by making the secret Denver meeting public and saying, although giving no details, that it had “resulted in proposed solutions” that appeared to be rejected by the union.

Union officials were infuriated, complaining that the disclosure was a public relations ploy to indicate that the UFCW was the side holding up a deal. As for the arbitration pitch, many in the union believe it heightened the pressure on the stores to resume bargaining by signaling to the public that the UFCW was at least trying to make headway.

“I tell you that’s nonsense,” one supermarket official said.

It was five days later when mediator Hurtgen announced that both sides would resume formal negotiations Feb. 11.

Once they were back, “both sides made a calculated decision that we would do everything in our best efforts not to hit a wall,” one negotiator said. Another source said the “four corners” of a settlement had been reached in Denver and now “everyone sensed that this had gone on long enough, and now it’s time to wrap it up.”

Negotiations typically started at 9 a.m. and often continued well past midnight. Besides the main bargaining room, each side had rooms staffed with subcommittees, or “caucuses,” that worked on specific parts of the contract, such as healthcare, pensions and wages.

At the main rectangular bargaining table, on the union side were Icaza, Conger, Stemerman and William McDonough, a UFCW International official. On the other side were negotiators John Schroeder of Kroger, Brent Bohn of Albertsons and Jim Mahan of Safeway. Hurtgen and an associate also sat at one end.

The weather turned lousy as heavy rains pounded the Southland in mid-February. Few people inside the negotiating rooms paid much attention. Most of them weren’t going anywhere, although some would sneak quick breaks to buy fresh sandwiches at Fashion Island or other nearby shopping centers.

“People were tired, people were beginning to get on each other’s nerves, people wanted to sleep in their own beds, where they hadn’t been in two weeks,” another participant said. “There really was a feeling that neither side wanted this to break off again.”

After the deal finally came together in Stemerman’s room, there was little celebrating. Later that morning, both sides went back to work on the post-settlement details, such as agreeing to drop the litigation between them.

It wasn’t until 4 p.m. Feb. 26 that negotiators tied up the loose ends and reached across the table to shake hands on the entire matter. “There were smiles, relief, congratulations,” one participant said.

Then the exact language of the 60-page settlement had to be finalized, and the pact had to be copied multiple times. The 10 signatories on the contract -- the seven UFCW local presidents and the three grocery chain negotiators -- had to sign each copy. The tedious exercise took several hours.

Finally, at 9:45 p.m., Hurtgen issued a press release announcing that a settlement had been reached. Actually, people were still signing the documents, one participant said, but “the mediator was trying to make the 11 o’clock news.”


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