An estimated 32,000 workers at Kaiser Permanente were set to strike Nov. 15 across five states. Instead, they and about 20,000 others will vote in the coming weeks on a new set of four-year union contracts. The deal was reached Nov. 13 after the massive health non-profit dropped its most outrageous demand: a “two-tier” arrangement in which new hires would be paid a third less than current employees doing the same work.
Kaiser also agreed to modest across-the-board raises: 3% in the first and second years, followed by 2% in the third and fourth years. The third and fourth year raises will also be accompanied by a 2% bonus that doesn’t raise the pay rate. The 3% raise in year one is retroactive to Oct. 1, and matches the raise another set of Kaiser unions got for this year, but it also leaves workers falling behind inflation, which is currently above 5% for the first time in years.
The unions that were gearing up to strike negotiate together as a coalition called the Alliance of Health Care Unions (AHCU), made up of 21 locals and about 50,000 members in eight states plus Washington, D.C. AHCU was created in 2018 when a number of unions split from an older coalition called Coalition of Kaiser Permanente Unions (CKPU) after disagreements over how to make decisions as a group. In Oregon and Southwest Washington, it includes 3,400 members of Oregon Federation of Nurses and Health Professionals (OFNHP), while Service Employees International Union (SEIU) Local 49 remains in CKPU.
The new contract makes several other important improvements:
- It modifies Kaiser’s annual performance sharing bonus to take greater account of whether mutually agreed cost-cutting objectives are achieved; the bonus is up to 3% of pay.
- It commits Kaiser to contribute an additional $15 million to a popular and well-used fund that pays for tuition when workers take classes to skill up and get new certifications. That’s on top of its existing practice of contributing 1.5% of payroll to the fund.
- It improves retiree medical benefits for some members of UFCW Local 21 in Washington: Upon retirement, Kaiser has been making a one-time contribution of $350 per year of service into a health savings account, and will now increase that to $1,000 per year of service.
- It promises bigger raises to some of Kaiser’s least paid workers in the region known as Inland Empire in Southern California. Exact details of the extra raises will be worked out by a labor-management committee.
AHCU remains in a longstanding and unusual labor-management partnership with Kaiser Permanente, but it’s hard to see how that partnership hasn’t frayed considerably in recent months. The basis of the formal partnership agreement is in part a commitment by Kaiser to offer industry-leading compensation. Kaiser had net income of $6.4 billion last year and is paying over $1 million a year to more than 30 executives, and yet for months it pushed the proposal to slash pay by roughly a third for newly hired nurses and others.
Leading up to the strike, Kaiser also tried to recruit strikebreakers, and reportedly offered $12,500 a week to nurses who would cross the picket line to undermine the strike.
Three union locals were planning to strike Nov. 15, and several other locals totaling over 4,000 workers were set to join them on Nov. 22.
Each local has its own collective bargaining agreement with Kaiser, and some have more than one. Expiration dates vary, but the largest number will next expire Oct. 1, 2025.
“I believe that we’re going to have to take a look at what went wrong, and what makes sense for us going forward,” said AHCU chief of staff Maureen Anderson. “Our bottom line is improving people’s living standards, and partnership was a great way to do that for the past 24 years. This round of bargaining called that into question. We ended up doing things that we have not done in the past, like giving strike notice and preparing to go on strike.”
“It was a skill set that people hadn’t really practiced in quite some time,” Anderson said. “We have a lot of picket signs right now that we’re trying to figure out what to do with.”
Local 701 reaches a deal too
On Oct. 28, Kaiser Permanente reached agreement with Operating Engineers Local 701 on a new three-year contract covering 103 stationary engineers who maintain equipment and keep hospitals running. As with the Alliance of Health Care Unions, agreement had been held up for months because of Kaiser’s posture in bargaining: The highly profitable giant was offering 1% annual raises and 0.5% lump sum bonuses while “slow walking” negotiations, Local 701 business manager Jimbo Anderson told the Labor Press.
In the end, Kaiser dropped that and agreed to 2% annual raises, plus 2% annual lump sum bonuses, and an additional 10 cents an hour each year toward the pension plan.
Members ratified the agreement Nov. 2 by a vote of 45 to 25. The first-year raises are retroactive to Aug. 1, and the new agreement will run through July 31, 2024.
Bay Area dispute escalates with sympathy strike
The tentative agreement covering 50,000 workers doesn’t mean labor peace for Kaiser Permanente yet. About 700 members of Operating Engineers Local 39 have been on strike since Sept. 18 at Kaiser facilities in the San Francisco Bay Area.
Local 39 business agent Shane Mortensen says Kaiser refused to negotiate over economics until the very last day of bargaining, and then offered what he described as a substandard proposal that would leave members well behind their counterparts at other local hospitals.
“It’s frustrating that they’re taking this stance,” Mortensen told the Labor Press. “They want to be the cheapest healthcare around. We want them to be the best healthcare.”
Mortensen—who worked as a stationary engineer at Kaiser for over a decade—said bargaining was never so contentious before under Kaiser’s old leadership.
“There’s definitely a cultural shift; they’re moving away from labor,” Mortensen said. “They’re acting like the 800 pound gorilla in the room — ‘You’ll take what I give you and shut up about it.’”
Three other unions totaling 40,000 Kaiser workers were set to hold one-day sympathy strikes to support them and put pressure on Kaiser to settle: SEIU-United Healthcare Workers West, Office and Professional Employees Local 29, and International Federation of Professional and Technical Engineers Local 20. The strikes were scheduled for Nov. 18 and 19, after this issue went to press. All three unions have also picketed alongside the striking Local 39 members in recent weeks.
“Enough is enough,” said SEIU-UHW president Dave Regan in a video to members. “Kaiser’s behavior toward the operating engineers is simply unacceptable.”
At press time, no further negotiations were scheduled between Kaiser and Local 39.
“We have reached out to Kaiser and they haven’t returned our phone calls,” Mortensen said.
