Giant workers reject contract Local union decries two-tiered wage plan, low pay increase

Food retailing

March 23, 1996|By Mark Guidera | Mark Guidera,SUN STAFF

Union employees representing 5,600 workers at Giant Food stores in the Baltimore region shot down a contract offer Thursday from Giant Food Inc., the region's largest grocery chain, raising the specter of a labor fight when the current agreement expires in September.

While Giant workers in the Baltimore area and on the Eastern Shore rejected a new contract offer, unionized Giant store workers in the Washington region approved a similar contract offer, 1,782 to 1,489.

Meanwhile, unionized store workers at Safeway Stores Inc. in the Baltimore and Washington areas, also voted in favor of a similar contract they were offered by the chain.

The approved union contract provides wage increases of between 50 cents per hour and $1 per hour, leaves intact the current health care package, and will pay some current employees several bonus payments of between $250 and $500 during the course of the four-year contract.

Buddy Mays, president of Local 27 of the United Food and Commercial Workers Union, which represents 27,000 members

in the Baltimore area and on the Eastern Shore, said Giant workers in his local rejected the contract offer because it sought to establish a two-tiered wage system and included wage increases that were lower than expected.

"We're not looking for a dispute, but we'll prepare for a tough fight with Giant in September if that's what the members want," said Mr. Mays.

The contract was rejected on a vote of 1,131 to 1,077.

Barry Scher, a vice president for Giant Food Inc., said the rejection of the contract offer by employees in the Baltimore area would not affect store operations.

"It's business as usual," he said.

Mr. Mays said the two-tiered wage element of the contract was a particular sticking point for Giant members.

The wage gap between Giant employees hired under a two-tiered wage system created in 1982 and employees hired before that system was put in place has "significantly narrowed" during the past 14 years, said Mr. Mays. But that system has been a source of tension between workers, he said.

"The [Giant members] sure didn't want to create another monster like that," said Mr. Mays.

Tom McNutt, president of Local 400 of the UFCW, which represents unionized grocery store workers in the Washington area, was not available for comment yesterday.

But Mr. Mays said it appears that contract was approved because some Giant workers thought it best to have a new contract in place in case the chain is taken over.

Some retail food analysts believe the chain may be taken over by London-based J. Sainsbury PLC, the No. 1 grocer in Britain, now that Giant's chairman has passed away. Israel Cohen died Nov. 23 after working for Giant for for 59 years.

Sainsbury bought a 16 percent stake in Giant for $325 million in October 1994. Sainsbury controls three of the publicly held company's seven seats on the board of directors.

As for Safeway workers in the Baltimore and Washington region, they favored the contract because they are aware of Safeway's need to become more competitive, said Mr. Mays.

The company has 124 stores in the Baltimore-Washington area, and is adding several more this year.

Safeway workers in the Baltimore region voted 402 to 47 in favor of the offer, while those in the Washington area voted by a margin of 9 to 1.

"It's a win for the company and the workers," said Brian Dowling, spokesman for Safeway.

"Store employees get wage increases, and the company gets some flexibility to get workers in some job classifications to take on broader responsibilities," he said. "That will help us compete in some of the outlying regions where we face competition from the nonunionized operators," such as wholesale discount clubs.

Pub Date: 3/23/96

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