Workers for Giant Food and Safeway stores in the Baltimore-Washington region voted overwhelmingly Tuesday to ratify a three-year labor contract that preserves health benefits and raises wages over three years.
Leaders with the United Food and Commercial Workers characterized the contract as one of the best in the grocery business at a time when companies are scaling back benefits and offering one-time bonuses instead of wage increases.
Giant and Safeway, the Baltimore area's biggest supermarket chains, said the agreement will enable them to stay competitive in the changing retail landscape. The contract covering 28,000 UFCW workers in Local 27 and Local 400 takes effect immediately, replacing one that expired Oct. 31 and had been extended twice.
"This is one of the best retail food contracts in the country," said Mark P. Federici, president of UFCW Local 400, which represents grocery workers in Washington and its Maryland and Virginia suburbs.
The contract allows current employees and some future employees to keep their current health benefits rather than being shifted onto health care exchanges — an outcome that union leaders said resulted from member activism during bargaining that was complicated by additional costs imposed by the Affordable Care Act.
Some Giant workers in the Baltimore area said they had been prepared to go on strike a week before Christmas to protest what they feared would be a loss of company-sponsored health care for part-timers and retirees. Part-time workers make up about three-quarters of the workforce at Baltimore-area Giant stores.
The contract will require employees for the first time to make contributions to existing plans, ranging from $5 to $15 per week starting Jan. 1, 2015. Otherwise, the benefits remain largely intact for current full-time and part-time workers.
New part-time employees working less than 28 hours a week won't be eligible for company-sponsored plans, unless their hours increase, but could get coverage from a health exchange.
Giant and Safeway initially proposed shifting all part-time workers to a public health exchange under the Affordable Care Act, said George R. Murphy Jr., president of UFCW Local 27.
"We think it was decent, all things considered, and are happy about health benefits remaining intact," said James Golden, a 28-year Giant worker in customer service at the Edmondson Village store in Baltimore.
The contract includes a wage rate increase of 15 cents per hour to 35 cents per hour, retroactive to Nov. 3, another at the same rate next November and a third, slightly smaller raise in November 2015.
Union leaders had reached a tentative agreement with both supermarket chains Dec. 11.
"Throughout negotiations, our goal was to reach fair and reasonable contracts that respect our legacy and honor our associates' contributions, while also recognizing our competitive realities," said Jamie Miller, a Giant spokesman.
Safeway spokesman Gregory A. Ten Eyck praised the union's hard work "to arrive at a fair settlement that continues to provide our employees with excellent wages and benefits while also allowing Safeway to remain competitive in the local retail food market."
Under the contract, retirees 65 and older will see no change to their health plans. Those under 65 will have no changes during the contract's first two years. Starting Nov. 1, 2015, those retirees will be given a $350 monthly stipend to obtain health coverage.
"No deal is perfect, but I think we accomplished all [our] goals, in the face of an employer that is going up and down the East Coast taking away things that people have earned, taking away all part-time benefits," Murphy told about 1,300 workers gathered to vote Tuesday in an exhibition hall at the Maryland State Fairgrounds in Timonium.
Giant workers at the Timonium meeting ratified the contract by a 1,223-89 vote without discussion. On Tuesday afternoon, Baltimore-area Safeway workers approved the agreement 588-55.
"Everyone was scared," said Sherrie Ebelein, a florist at the Giant in Owings Mills who has worked for the grocer for 19 years. "We thought we were going to lose our health benefits. I was ready to strike. This is a plus for the unions."