Farmer Jack Labor Contract May Hamper Kroger Job Prospects

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Farmer Jack Labor Contract May Hamper Kroger Job Prospects

DETROIT -- The labor union that represents former employees of the now defunct Farmer Jack here entered an agreement with Kroger in June that local observers believe might keep workers from being hired at the 20 stores Kroger bought.

The United Food and Commercial Workers Local 876 inked a pact with Cincinnati-based Kroger, stipulating that it match employee wages and benefits of any former Farmer Jack employee for its newly acquired stores. The agreement, however, doesn't state that Kroger -- which has an existing labor agreement with the UFCW -- must hire Farmer Jack employees, according to a report in the Detroit Free Press, which said that Kroger agreed that it would "interview and give Farmer Jack employees serious consideration for employment."

Supermarket analyst David Livingston was quoted as saying that the pact could have worked against Farmer Jack workers. "There is no upside to hiring a Farmer Jack employee," Livingston said. "If Kroger had agreed to hire Farmer Jack employees, they might not have been able to make this deal," he said, referring to the store purchases. "To be able to run these, they have to keep the costs down."

The agreement, reached in June, did not require membership approval, according to Local 876 president Roger Robinson. Instead, the agreement states that employees should be hired at $1 an hour below the top new hire clerk rate -- about $12 an hour -- then move up to the unspecified top Kroger rate within six months.

"This is a situation where Kroger was buying the assets, but they didn't buy the people," UFCW's Robinson said. "They had no obligation to negotiate with us. We tried to do it to protect people as much as we can. When a company buys the assets but not the people, the people are stuck."

Citing numerous Farmer Jack employees who have been interviewed and declined to give names, the paper said most haven't been granted second interviews.

However, other Farmer Jack buyers, like Hollywood and Hiller's markets, which also have labor agreements with the UFCW, told the paper they plan to employ as many former Farmer Jack employees as possible. "These people are trained," said Bill Welch, owner of Hollywood Market, who purchased three Farmer Jacks and picked up most of the stores' 180 former employees. "They know what their jobs are." Welch called a decision to not to hire them "a slap in the face to a lot of experienced people."

Welch, who took over the three newly acquired stores on Friday, stocked them over the weekend and opened them for business Tuesday.