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Union members at the A&P supermarket chain took a financial beating in federal court this week, as the company’s senior managers renewed their legal assault on the labor contracts covering some 25,000 employees in six mid-Atlantic states. The worst is yet to come for the low- to moderate-income grocery workers, however, as the judge in charge of the case made only limited rulings while indicating he may move more forcefully against the union as mass firings go forward.
“There is nothing to be happy about for anybody,” says Wendell Young IV, President of Local 1776 of the United Food & Commercial Workers (UFCW) union. A&P is moving steadily forward with its plan to dismiss all the unionized employees at its 300 stores, and Judge Robert Drain eased the way September 2 by agreeing to cuts in severance pay for the first wave of discarded workers. Further, he acted to undercut job protection provisions in contracts for the union members that will remain temporarily on the payroll.
But Judge Drain declined to cancel key labor contract provisions outright, as A&P executives had requested. That step remains a possibility as the A&P bankruptcy court proceedings continue, Young says, and some union leaders are expecting that in the near future.
Most severe of Judge Drain’s actions this week was to approve cuts in the severance benefits to about 2,500 workers already fired by the company. A&P executives had asked that UFCW contract provisions covering severance benefits be cancelled, and that the company be allowed to make payments representing just 25 percent of the contractual amounts. The union objected strongly to this, and Judge Drain sought a compromise, Young says, ultimately settling on 52 percent. Such cuts will fall most heavily on the more senior unionized workers at the company, who have accrued greater severance rights as they toiled year upon year for the company.
The judge’s action affects workers at 25 stores in the several grocery chains owned by A&P, including A&P, Pathmark, Waldbaums, Food Basics, Superfresh and several others. Those 25 are the first closures among 300 A&P stores clustered in New York, New Jersey and Pennsylvania, with a scattering of additional locations in Connecticut, Delaware and Maryland. Almost all workers are represented by one of 12 separate UFCW locals (there is also a group of about 250 pharmacy workers represented by the Service Employees International Union), but there is also small contingent of non-union workers.
One of the non-union workers affected is Joseph Fabbio of Lake Grove, N.Y. In a poignant cry for help, he wrote to Judge Drain August 26:
Much has been mention about union associates during the A&P bankruptcy proceedings but what about the non union associates. I have work 10 to 12 hours a day for years. We are being told that we will only receive 4 weeks severance after 44 years of loyal service. Also after all these years of loyal service to find out that my pension is only worth $431 a month does not seem right. Where is all the pension money? Can you be the voice of the non union associates?
As detailed previously for In These Times, A&P filed a Chapter 11 bankruptcy petition July 19 with the stated intention of dismembering the company. A&P Chief Administrative Officer Christopher McGarry informed the court at that time that the company had tentative agreements in place to sell 120 supermarkets to competing grocery chains in the area, and that it intended to sell or close the other 180 stores piecemeal. All of the employees – union and non-union alike – would be terminated in a phased liquidation of the historic company.
That left the individual UFCW locals to fight for whatever could be salvaged, according to Young. In the case of Philadelphia-based Local 1776, that meant trying to insure that as many A&P members as possible could find new jobs with ACME Markets, an existing large chain that intends to buy nine of the A&P grocery stores in eastern Pennsylvania.
But the proposed sales sparked an immediate disagreement over so-called “bumping rights” — job security provisions contained in many UFCW agreements that protect the seniority rights of workers when individual stores are closed. In most cases, bumping rights allow a senior union member to transfer to a new store, even if it means displacing a more junior worker, Young explains.
But from the start, A&P’s McGarry claimed that bumping rights would be too costly for A&P and would interfere with the smooth sale of stores to ACME and other potential buyers. A&P therefore asked Judge Drain to void the bumping rights provisions of the various UFCW contracts, and lawyers for both sides battled over this issue in bankruptcy court this week.
Young, who was present in the courtroom, reports that the fight over bumping rights was a draw, but with the union locals forced into a defensive position. Local 1776 was able to convince Judge Drain that the some unique features of its bumping rights provisions meant that A&P suffered no financial disadvantage, Young says, so the 1776 provisions were allowed to stand. But that wasn’t the case for all the other UFCW locals, and Judge Drain deferred any action on those for the time being. He instructed representative of A&P and other UFCW locals to seek a negotiated settlement, and report back to him later.
Although there was little emotion displayed in the courtroom this week, feelings are running high in many of the union halls. Writing on the web page of the Clifton, N.J.-based UFCW Local 1262, President Harvey Whille described the court action as “just another example of the company’s arrogance, and is a slap in the face to our Pathmark members – and all union members employed in A&P-owned stores – many who have given their entire lives to the company. … The truth is, my brothers and sister, that you, our Pathmark members, have earned your severance through your dedication to your job and the customers, hard work and countless personal and financial sacrifices.”
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