Schnucks employees vote to reject proposed new contract

ST. CHARLES, MO (KPLR) - Schnucks employees have rejected a proposed contract by a wide margin.  There were 250 votes for and 1,934 against the contract. Union leaders said the membership did like 2 or 3 items in the proposed contract, but there were 15 items members did not like.  As the official said, it all came down to economic advancement.

By rejecting the contract, a strike authorization was given by the membership.  But union leaders say they will go back to the bargaining table and try to work out a better deal.

Before tonight's vote on a new contract local Schnucks employees and union members filed into the Family Arena in St. Charles to learn about, and then vote, on a contract that had been proposed.

Schnucks employees had two voting options, they could either accept the contract and return to work, or reject the contract and authorize a strike. A 2/3rds vote is required to authorize that strike.

Leaders in the union have already recommended employees reject the contract. While many had not seen the details of the contract, in a letter to employees, the main issues the union was facing were benefits and wages.

There was an extensive period for employees to learn about what's in the proposed contract and ask any questions before voting actually begins.

If the employees reject the contract and authorize a strike, it won't happen immediately. Union leaders, in their recommendation to vote for a strike, say that would show how serious they are about accepting reasonable terms.

Schnuck's Statement:

We'll be meeting with 655 leadership for what we expect to be productive and meaningful discussions, just as we have had with numerous union leaders over the years.

Our goal remains the same – to deliver a solution that works for our teammates. It is important that we do this while keeping our business positioned to compete against the more than 580+ non-union supermarkets and stores that sell food throughout our metro area.

As we’ve said before, taking care of our people and delivering the kind of shopping experience our customers want and deserve is what’s most important. Success in those two areas is what made Schnucks the choice for our customers for more than 75 years, and it is how we will succeed going forward.

Todd Schnuck

September 26, 2016

Statement from Todd Schnuck

CEO, Schnuck Markets, Inc.

The state of the grocery industry has shifted from traditional grocer to multiple formats now selling food. Currently there are four union grocers in the St. Louis area, including Schnucks, and together we have 135 locations. It was 139; four locations closed in the past three years.

In contrast, there are 16 non-union grocers - as well as stores that sell food – in the St. Louis metro and between them they have 584 locations, including 84 new stores in the last three years. This group includes some of the largest companies in the world - Walmart, Sam’s, Target, Aldi, Costco, Walgreens and CVS. It also includes Dollar General, Whole Foods, Lucky’s, Fresh Thyme and a few others. None of them have union relationships and they don’t hire union workers.

We are concerned that the UFCW Local 655 leadership team is ignoring the explosive growth in our region’s non-union competition, including companies like Walmart, a $482 billion global conglomerate with 37 locations in St. Louis alone. The end result is an uneven playing field.

Schnucks is proud to be the largest union-based supermarket, as well one of the largest union employers in St. Louis. Throughout our stores, we employ 10,000+ union members – more than the other three union supermarkets combined. Our union teammates belong to 15 unions, make up 75% of our workforce, and we pay them $200,000,000 in wages annually.

We are proud to have held our teammates’ healthcare costs below industry benchmark averages. Our teammates pay approximately 60% less for individual coverage than the average contribution of other hourly retail employees. With family coverage, our teammates are even better off – paying approximately 80% less than hourly retail employees. Our healthcare plan helps our teammates receive benefit coverage they need and keeps our business moving ahead in a hyper competitive market.

Currently, we have offered our 655 teammates a three-year contract that includes what they’ve been asking for – more money with substantial, real-dollar increases to the start rate and a shorter time period to progress through the first four pay brackets. We are also proposing a cash bonus and increasing wages at top pay rates.

We’re offering an unprecedented 40% increase in pension contributions for current teammates, which meets the request made by Local 655 in negotiations.

We are increasing contributions to our healthcare plan, which on a comparative basis could be considered a premium, with an additional $600,000 in annual health and welfare contributions in the first year of the contract and further increases in years two and three of the contract.

We’re also addressing requests for longer lead times on work hours by offering work schedules two weeks in advance.

Specifically, if our proposal is accepted:–

  • 655 teammates will see their average full-time hourly rate at $18.16; as a comparison Walmart’s average full-time hourly rate is $13.38.
  • For our full-time 655 members, annual salaries plus their welfare and benefit packages will vary. For example, our top clerks’ package will be $43,825 a year, some of our Floral or Salad Bar Manager packages will be $44,761 a year, while most Center Store Manager packages will be $59,477 a year.
  • Top scale, part-time 655 teammates will see a package of $16.37 an hour, which includes their hourly rate as well as our welfare and pension contributions. Depending on hours, they’ll see anywhere from $17,024 a year for a 20-hour week to $29,793 for a 35-hour week.

It is my job to ensure Schnucks continues on its successful path. I believe this proposal meets the needs of our teammates while keeping our business competitive against non-union grocers and stores that sell food, which includes some of the world's largest companies.

I am very proud of the work our union teammates do every day to deliver the level of service our customers have come to expect, and for the support they give one another.

Todd Schnuck


UFCW 655 Statement:

Members of United Food & Commercial Workers Local 655, in a secret ballot vote this evening at the St. Charles Family Arena, overwhelmingly rejected a proposed contract from Schnuck Markets and authorized only the second strike in the union’s history against a food chain. The vote was 250 to accept the contract and 1,944 to reject and strike (89%), Local 655 President David Cook announced. Two-thirds was necessary to strike.

The recommendation from the union’s leadership and its rank-and-file Bargaining Committee was to reject the offer and authorize a strike. It is the first time that UFCW Local 655 has unanimously recommended rejecting a contract proposal from Schnuck Markets.

The union’s current three-year contract expired May 8 but has been extended on a day-to-day basis while negotiations continued.

The union will urge Schnucks to come back to the bargaining table and negotiate a fair and reasonable contract to avoid a strike.

While Local 655 is currently conducting negotiations with Schnucks, the other two largest employers of the Union, Shop ‘n Save and Dierbergs, have already stated that they will sign the same economic package that Schnucks and Local 655 agree to, effectively making the Schnucks contract the standard by which other contracts will be set. Straubs, whose contract ended last week (Sept. 24), is not in negotiations

“We hope this overwhelming rejection sends a clear message to Todd Schnuck that the substantial sacrifices made by his employees over the past three contracts that has allowed his company to be extremely profitable is not acceptable at this time when Schnucks has posted record sales in recent years,” said UFCW Local 655 President David Cook.

Cook pointed out that over the past 9 years (the last three contracts) Schnucks’ employees have agreed to almost cost neutral contracts in reduced wages and benefits and work rule changes to keep the company competitive. The rejected contract proposal would require significant cuts in health benefits, reduce the number of full-time jobs, and provides no meaningful increase in wages.

“The employees deserve to be recognized for their sacrifices with a fair contract,” Cook said.

“Schnucks has been incredibly competitive for years, and this contract asks for their employees to make even deeper concessions.”

In contrast, Cook noted that in 2016, Forbes Magazine lists Schnucks as the 168th largest private company with $2.7 billion in revenue, a position that has been improving over the years: in 2009 they were listed as the 191st largest private company; in 2010 as the 174th largest private company.

“We are ready to re-enter negotiations with the expectation that Schnucks will re-consider their approach and be willing to bargain a fair agreement, instead of asking more than 4,500 hard-working employees to take continued cuts to their health care benefits and reduce their standard of living,” Cook stressed.

“Schnucks has never said they couldn’t afford the contract we are proposing,” he added. “They have simply claimed doing so would make them less competitive, a position that is simply not supported by the facts.”

Members employed at Schnucks, Dierbergs, and Shop ‘n Save will report to work on their normal schedules tomorrow.

“A strike is a last resort for our members. It is not a first option, and it certainly isn’t something anyone seeks out unless all other options have been exhausted. Our members made it clear by their votes: the current offer is not only unacceptable, it’s outrageous,” Cook said. “We are ready to get back to the bargaining table to work toward attaining a fair offer and avoid a strike.”