Kroger faces massive worker walkout, closed stores | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Labor problems tend to spread like a virus once they take hold.

Starbucks has seen that happen as one store unionizing slowly led to unions forming all over the country. You can argue that those issues at least partly caused multiple CEOs to lose their jobs (although there were other reasons) and created significant negative publicity for the company.

In addition, over the past few years pretty much every airline has dealt with labor unrest from its pilots and flight attendants. That led to threats for strikes, although no actual work stoppages, and ultimately large raises for pilots and more moderate ones for flight attendants.

Even the threat of labor unrest hurts a company. Airlines have more protection as workers need federal permission to strike.

Grocery stores have no such protection giving workers a lot of leverage.

💵💰Don’t miss the move: Subscribe to TheStreet’s free daily newsletter💰💵

Kroger (KR) now faces a labor battle on two fronts.

That’s dangerous for the company because unlike airlines, consumers have a lot of choice. People won’t go without food, so if Kroger has a strike that business will go to other grocery chains, Target, Walmart, or Costco.

A strike would shut down many Kroger locations.

Image source&colon; Jeremy Hogan/SOPA Images/LightRocket via Getty Images

Kroger drivers join Teamsters, authorize a strike

In early June, drivers at Kroger’s Forest Park fulfillment center have voted overwhelmingly to authorize a strike in response to the company’s repeated refusal to negotiate a fair agreement. The workers, represented by Teamsters Local 528, are demanding a contract with strong wages, good benefits, and enforceable workplace protections, according to a press release.

“These workers organized with the Teamsters to win better wages, real benefits, and respect on the job,” said Teamsters Warehouse Division Director Tom Erickson. “If Kroger refuses to deliver, we’ll do whatever it takes to hold them accountable. We will never allow any company to shortchange our members.”

The 30 CDL drivers voted by a 96% margin to join the Teamsters in 2024.

More retail:

Since then, the union has alleged that Kroger has “slow walked” negotiations and failed to offer a contract that meets basic standards,” according to the Teamsters.

“Kroger needs to stop dragging its feet and deliver a real offer that respects the work we do,” said Marion Jackson, a Kroger driver and Local 528 shop steward. “This company can more than afford what we’re asking for. We are ready to strike if Kroger doesn’t start taking our demands seriously.”

Kroger store workers authorize a strike

Kroger has also been negotiating a new labor contract with Indiana’s United Food and Commercial Workers (UFCW) Local 700. That union represents roughly 8,000 clerks, meat-cutters, and pharmacy techs across central Indiana.

UFCW Local 700 rejected a tentative four-year agreement by a 74% margin. By voting no, the union automatically activated strike authorization, giving leaders the legal power to call a walkout at any time.

Kroger and UFCW 700 did return to the bargaining table in June 7, but no deal has been made. The union shared some facts about a potential strike with members:

A strike for better wages and/or better working conditions (known as an “economic strike”) is considered legally protected activity under the National Labor Relations Act (NLRA).
Economic strikers retain their employee status while participating in an economic strike.
Employees are not compelled to join the strike if they do not wish to join.
Kroger has the right to permanently replace economic strikers.
Employees have the right to return to work if they offer to return to work on an unconditional basis and if their position has not been permanently filled by a replacement.
If Kroger hires permanent replacements, employees lose their right for immediate reinstatement if there are no positions available. If there are no positions available, economic strikers who have been permanently replaced are placed on a preferential hiring list.

Union officials have not shared if they plan to call for a strike and they have not set any sort of deadline publicly.

Workers have charged that Kroger’s salary offer is below the state’s cost of living index. They also have issue with provisions of the health benefits and certain seniority rights rules.