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Reports early this morning from Southern California said that the more than four-month-old strike/lockout affecting the region's three major supermarket chains and as many as 70,000 employees is coming to a close as the two sides reached a negotiated settlement.

Details of the agreement were not available as of this posting. After infrequent and fractious attempts at negotiation, the two sides met for 16 straight days.

Whatever the agreement is, it will have to be submitted by the United Food and Commercial Workers (UFCW) union to the rank-and-file for approval. That voting is likely to take place this weekend, and published reports say that the striking and locked-out workers will have to approve the deal before they return to work. But that is considered likely to happen by the beginning of next week.

The Los Angeles Times is reporting this morning that the three chains - Safeway's Vons, Kroger's Ralphs, and Albertsons - "accomplished such goals as installing a two-tier system of employee compensation, under which new hires would earn considerably less in wages and benefits than current employees, the sources said.

"There also would be a cap on how much the supermarkets contribute to their employees' healthcare coverage, a change the stores aggressively sought in order to combat rising healthcare costs, they said. Until now, all of the workers' healthcare costs have been borne by the stores.

"The union, meanwhile, persuaded the grocery stores to contribute more money into the workers' heathcare reserve fund, the sources said. The upshot of that move, they said, is that veteran grocery employees should not have to contribute to their healthcare coverage in the first two years of the contract, although they might have to pay some amount during the third year."

Estimates are that the chains lost a total of more than $1.5 billion during the strike. No estimates have been given for how much was lost by the supermarket employees affected by the strike/lockout.

The labor dispute started when the UFCW went on strike against Safeway's Vons and Pavilions Stores on Oct. 11. Kroger's Ralphs and Albertsons, which bargained jointly with Safeway, locked out their union workers the next day.
KC's View:

We think it was our visit to Southern California that finally did it…just our presence in the empty aisles provided the impetus for the two sides to finally get serious.

Still, we look forward to seeing the details of the agreement, and to see if management and labor made real strides or just applied a band-aid.

Because if it is a band-aid, bleeding from other parts of the body will begin soon. The current contract covering some 30,000 Northern California supermarket employees who work for the same three retail chains expires on September 11, 2004.

And Safeway's Dominick's has finally returned to the table with its unionized employees to negotiate a settlement with unionized employees and bring an end to labor unrest that has lasted more than a year.

But one has the sense that this could all fall apart very easily.

Beyond that, big questions remain in Southern California.

How much of the business lost by the major chains during the past 138 days will remain lost to them, now that many consumers have discovered other options, ranging from Trader Joe's to Bristol Farms, Wild Oats to Stater Bros.? And how much of the region's grocery business, suddenly "in play," will migrate to the Nation of Wal-Mart when the Arkansas retailer starts opening up supercenters in Southern California?