PRESIDENT’S OFFICE

UNFINISHED BUSINESS

December 15, 2015

Dear Local 5 Sisters & Brothers:

Since elected by the membership and taking office in December 2014 Local 5 has faced johnmany challenges with much success. My first order of business as President was to uphold my campaign promise to cancel a previously authorized dues increase and stabilize Local 5’s finances from a significant budget deficit. The dues increase was cancelled and through increased efficiencies and the elimination of wasteful spending Local 5 is on solid financial ground. Most importantly, Local 5 was determined to reverse the last few years of concessionary agreements which were the by-product of the Great Recession of 2008-2009. Although success was achieved, we still need to reach agreement with one last persistent hold-over, Save Mart/Lucky.

Many of our contracted union employers struggled through the global financial crisis that lasted five years and were in immediate need of financial relief. The destructive and reckless greed of Wall Street bankers left tens of thousands of bankruptcies and business failures in its aftermath, including two of our long time union employers, Andronicos and PW Markets.

Andronicos approached Local 5 in 2011 for financial relief, and requested to open bargaining for a new agreement early in an effort to remain in business. The members realized their employers challenging fiscal condition and stepped up to grant modest economic relief. They are now in solid financial condition and renovating stores while 400 good paying union jobs have been saved.

Most of the earlier concessions in the Andronicos contract have been won back and three years of wage increases were negotiated. This is a prime example of the employer and union working collaboratively in good times and bad to keep the company fiscally healthy while maintain well-paying union jobs. PW Markets did not approach Local 5 for similar relief and, unfortunately, they succumbed to the Great Recession and 800 union jobs were lost.

The financial distress of our larger employers continued during the 2012 bargaining cycle, with Save Mart/Lucky and Raley’s/Nob Hill also requesting similar financial relief granted to bankrupt Andronicos. After a review of their financial records by a union designated auditor, it was determined some financial relief in the union contract was appropriate to prevent additional store closings and layoffs.

The recession is now a footnote in history and the Bay Counties are in the midst of a full economic recovery. Local 5 has been successful in achieving raises with our many employers, maintaining current benefit plans at no cost to employees and improving contract language. Some very good agreements have been reached with Nob Hill Foods, Safeway, Rite Aid and Andronicos. Local 5 has also finalized similarly good contracts in our Wholesale Meat and Agricultural Divisions.

Save Mart/Lucky is the challenge remaining. Save Mart/Lucky came to the bargaining table in 2011 claiming financial distress. After a review of their financial records it was determined by the prior administration of Local 5 that financial relief was justified and an array of concessions were granted. The Lucky/Save Mart take-backs were to be for a temporary two year period expiring in August 2014. Nonetheless, Save Mart/ Lucky insisted on continuing the concessions without making additional claims of financial hardship. Further, with the savings from the employee concessions, now totaling $60 million, Save Mart/Lucky promised to re-invest and renovate their stores, but has made little progress in this area.

In November 2014, Save Mart/Lucky stopped negotiating with Local 5 and forcefully imposed a continuation of the take-aways. Shortly thereafter, the members voted by a 99% margin to reject the contract and strike their employer only to be overridden by the International Union. Save Mart/ Lucky members have endured five years with no wage increases, and the two years of temporary concessions have morphed into three and one half years, while management has received handsome bonuses. Employees lost Memorial Day as a paid holiday, premium pay on Sundays and Holidays and night premium for most employees. It will now take a new Multi-Purpose Clerk between 12 and 15 years to achieve the top wage scale, currently $18.50 per hour. Additionally, Courtesy Clerks are being required to temporarily step-up to higher paid positions taking hours and wages away from Senior Food Clerks and Multi- Purpose Clerks.

Save Mart/Lucky has rebounded from the financial woes of the Great Recession and is now in good financial condition due largely from the employee concessions and the remarkable recovery here in the Bay Area. Hundreds of new employees have been hired, store volume and profits are up considerably and stores are beginning to be renovated. Although we all applaud Save Mart/Lucky for their successful economic turn-around, Local 5 will not allow our members to be left behind. Local 5 will continue to fight until economic justice is achieved.

Save Mart/Lucky recently reached out to Local 5 to re-start contract talks. The parties met on December 10th with the assistance from a Federal Mediator and the UFCW International Union. Some progress was achieved through these discussions and another date will be set in January. Please refer to the ufcw5.org website for more information.

In Solidarity,

John Nunes

President