October 16, 2009 Volume 110 Number 20

IBEW 48 health trust may drop Fred Meyer as drug manager

The Harrison Electrical Workers Trust Fund, which administers health coverage for members of IBEW Local 48, may drop Kroger Prescription Plan as its pharmacy benefits manager.

A primary reason for this is a months-long dispute the union has had with Fred Meyer over its use of nonunion electrical contractors on major remodeling projects in Oregon and Southwest Washington.

Fred Meyer merged with Cincinnati-headquartered Kroger in 1999.

“This is not the Fred Meyer it used to be,” said Tim Foster, assistant business manager of IBEW Local 48 in Portland. “At one time, Fred Meyer hired almost exclusively union labor. There has been a noticeable shift.”

Foster said over the past year-and-a-half, IBEW-signatory contractors bid on 10 large Fred Meyer remodeling projects, even using union market recovery funds to lower the cost of the bids. Nine of the 10 contracts went to nonunion competitors at roughly half the wages and benefits of a union electrician.

Other union-signatory contractors have been shut out from even bidding the work, which has resulted in informational picketing at Fred Meyer stores under remodel.

“I would guess our union contractors get no more than 10 percent of Fred Meyer’s work,” said John Mohlis, executive secretary-treasurer of the Columbia Pacific Building and Construction Trades Council. “Fred Meyer has union health trust money going in their door, and they turn around and hire nonunion contractors that don’t even provide health benefits to their workers.”

On Oct. 6, Foster met with an executive from Kroger’s Northwest construction division to explain the partnership labor once had with Fred Meyer and to talk about the advantages of employing union contractors.

Foster told the Labor Press — and the executive — that last year the Harrison Trust spent nearly $800,000 at Fred Meyer pharmacies through the Kroger Prescription Plan. “And our members spent a lot more than that on groceries,” he said.

Foster said the Kroger officials couldn’t explain how the nonunion contractors were able to bid the jobs so low. “He suggested that our contractors were using outdated bid specs, but I don’t buy that,” Foster said, pointing out that one nonunion electrical contractor used Craigslist to hire electricians.

“Accepting the lowest bid is not always getting the best deal,” Foster said.

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