1. PACS 3700/ COMM 3700 Labor Management Case Exercise

2. The situation  SuperQueen is a major grocery store in town that has several stores and hires about 350 employees who belong to the United Food and Commercial Workers Union.  The contract the workers have with the store is about to expire, and negotiations on a new contract have stalled.  The major issues are this:

3. Agreed facts:  SuperQueen is trying to compete with several non-unionized grocery stores including Walmart, Sams Club and Costco.  All of those non-unionized stores pay their workers considerably less per hour than does SuperQueen, plus they do not give their employees health insurance.  That keeps their operating costs much lower than SuperQueen’s, which they can pass onto their customers with lower prices.

4. Expiring Contract  The contract between SuperQueen’s employees and the store is soon to expire, and negotiations over a new contract have been difficult.

5. SuperQueen’s view of their dilemma:  SuperQueen prides itself on the quality of their food and service, both of which they see as superior to that provided by the non-unionized stores.  They also try to treat their workers with respect, pay them a fair wage, and have, at least until now, provided the almost unprecedented benefit of full health care benefits for the employee and their families. This is costing a HUGE amount of money, and is seriously cutting into profits.

6. SuperQueen’s view  However, SuperQueen says that health care costs have risen so much that they can no longer maintain a large enough profit to stay in business if they give the employees a 5% wage increase (which the union has demanded) and continue to pay health care benefits at the level they have been paying.

7. SuperQueen’s view  SuperQueen is proposing a small wage increase for full time employees, even smaller for part time employees, and they say they can only pay a small portion of their full time workers’ health benefits. They are proposing to cut part time workers’ health insurance to nothing, saying most of their part timers are students, who don’t need the health insurance anyway, as they are on their parents’ plans.

8. SuperQueen’s view  They also propose cutting some people’s hours and reducing vacation time for all but the most senior employees.

9. The Union’s view  Negotiators for the employees insist that these proposed cuts are both unnecessary, but also unfair and detrimental to the business’s success.  If workers can’t make a “living wage,” they will have to leave for more lucrative employment, and the turnover will cost the store dearly.

10. The Union’s view  The union also asserts that many of the part time workers are not students, but rather are parents who are trying to work part time, and be with their children after school.  They desperately need health care for themselves and their families.

11. The employee’s view  Plus, most of the workers do not make enough to pay for their own health care.  The ACA will possibly help, but plans through the ACA are still pretty expensive!

12. Employees’ side  This will also hurt the company in the long run, as people will end up missing more work due to sick days.  Needless to say, they don’t like the notion of having their hours or vacation cut either.

13. Impasse!  The management and the union reps have been negotiating for months, but no progress has been made and the contract expires in two weeks.  If no agreement has been reached at that time, the union is threatening a strike.

14. Strikes hurt everyone!  Everyone agrees that a strike would be harmful to everyone. The employees would go without income, The store may or may not be able to stay open, depending on whether they can get replacement workers and customers to cross the picket lines. Either way, many customers may decide to shop at other stores during the strike, and may not come back to SuperQueen after the strike is over.

15. So what to do?  Both the workers and the company are considering using ADR to try to avoid a strike—but which approach should they use…  Mediation or Arbitration??  What are the pros and cons for each?

16. Let’s try it!  People who said mediation make groups of 6…two workers, two management, two mediators. Spend 5-10 minutes planning your approach, and then try to mediate this situation to create an agreement.

17. Let’s try it!  People who said arbitration make groups of 6…two workers, two management, two mediators. Spend 5-10 minutes planning your approach, and then try to arbitrate this situation to create an agreement. Write down your agreement and sign it to get “group credit” for today!