Bruno's Filing Aims to Facilitate Sales Process, Save Jobs
Bruno's Supermarkets, LLC said yesterday that it has filed a motion to reject collective bargaining agreements between it and the United Food & Commercial Workers, a move that that the grocer believes could simplify the sales process and save jobs at Bruno's and Food World stores. The filing asks the court to allow Bruno's to change the labor agreements with its employees that will make a sale of some or all of the company's store locations easier, with the aim of preserving jobs. The company filed for Chapter 11 bankruptcy last month.
The motion comes in the wake of extensive discussions of several months' duration between Bruno's and the union about the company's current collective bargaining agreements (CBAs). Looming court deadlines for completing a sale necessitated the motion filing yesterday. The UFCW represents almost two-thirds of Bruno's associates.
Bruno's and the UFCW have been unable to agree on modified CBAs. Under the terms of the proposed modified CBAs, unionized employees would still receive financial and other benefits that non-union workers don't get.
The current CBAs also contain a "successorship clause" requiring any purchaser of Bruno's stores to assume the CBAs and all of their obligations, a clause Bruno's said is a barrier to serious talks with many potential buyers. The company added that changing the CBAs boosts the likelihood for other would-be acquirers to come surface. If a sale isn't made, the company could face liquidation.
"What we're proposing would help in our restructuring efforts and makes it more likely that both union and non-union Teammates will retain their jobs through a sale to a strategic buyer," said Bruno's chief restructuring officer Jim Grady. "We intend to continue working with the UFCW and remain committed to reaching a resolution that facilitates a sale while recognizing the union's role as authorized representative for many of our Teammates."
The filing was made under Section 1113 of the U.S. Bankruptcy Code. The court will likely schedule a hearing to be held about two weeks from now, and is expected to issue a ruling within 30 days of that hearing. Bruno's said it would continue to work toward an agreement with the union before the hearing.
According to Bruno's, if the court approves the filing, the grocer has no immediate plans to alter wages and benefits other than to potentially make adjustments that were previously agreed to by the UFCW.
Birmingham, Ala.-based Bruno's is the parent company of Bruno's and Food World grocery stores, which consist of 23 Bruno's locations and 43 Food Worlds in Alabama and the Florida Panhandle.