Once union members give up their pension, they rarely ever get it back. But at Northwest Natural, in union contract negotiations that were backed by the credible threat of a strike, that’s what just happened.
In a multi-day vote that ended May 19, members ratified a new collective bargaining agreement between Northwest Natural and OPEIU Local 11 at about a nine-to-one margin. The agreement raises wages 24% over four years (with compounding) — a 6% raise June 1 and four 4% raises each Dec. 1. Some workers who were deemed under-market for their job class will raises of up to 32%. (The contract lists about 70 different jobs that fall into one of about dozen pay scales, and as of June 1, wages range from $20.82 to $57 an hour.)
Northwest Natural is a publicly traded corporation and regulated monopoly providing natural gas in Oregon and Southwest Washington. Its agreement with Local 11 covers about 610 workers, both trades workers who install and maintain gas lines and call center workers who help customers with billing.
Howard Bell, elected Local 11 business manager in April 2023, has spent many years poring union contracts — his own and others — and says this is the best contract members have had in decades.
Besides the wage increases, the agreement also:
- Reduces the employee share of the health care premium from 20% to 15%, saving members about $100 per month;
- Guarantees no layoff of bargaining unit employees who were hired before May 2023, and commits to eliminating outside contractors before laying off any company employees doing the same work; and
- Gives workers the option to donate up to 40 hours of paid time off to a coworker who might be in hardship.
After Local 11 made a case to the company that the feeling of being recorded all the time was causing anxiety in workers, Northwest Natural also committed in the contract to turn off cab-facing cameras in work vehicles unless a worker is involved in a driving-related disciplinary case.
The contract is a big leap forward, and Bell says credit is due to University of Oregon’s Labor Education and Research Center (LERC) for a successful change in tactics.
“They mapped it out, and away we went,” Bell said.
Based on guidance provided by LERC when it trained several dozen bargaining team members and stewards, Local 11 insisted on transparency with members during bargaining, refusing to agree to a “gag rule” that would have kept the union from communicating to members and the media about bargaining. Because of that, as negotiations progressed, members developed intense interest, and attendance at update meetings swelled.
The other key strategy shift was the launch of a contract campaign — a network of stewards and active members who keep coworkers updated, lead workplace mobilizations, and prepare to strike if needed. Local 11 distributed hundreds of “Union Strong” buttons, and organized workers to wear the same color on certain days in a display of unity. Members prepared for the possibility of a strike, buoyed by assurances that several other unions would honor their picket lines.
Of all the contract improvements, restoring the pension is likely to have the most lasting impact. Northwest Natural has its own defined benefit pension plan, but in 2009, workers ratified a contract that closed the pension to workers hired after that year. Workers hired since then have a 401(k) to which the company automatically contributes 4% of payroll, plus up to another 4% as a 50% match for employees who contribute 8% of their wages.
But in terms of retirement security, there’s just no comparison between a traditional pension and a 401(k). Whereas a pension provides a guaranteed monthly payment for life, a 401(k) is basically an employer-sponsored tax-deferred retirement investment account. If investments in a 401(k) do poorly, there’s no way to make up the loss, and retirees can also find it challenging to figure out how quickly to spend down savings without running out.
Bell is a trustee on the Western States Office and Professional Employees Pension Fund, a union-sponsored multi-employer pension, and he’s been leading an effort for the fund to develop a new hybrid pension offering that Northwest Natural and others employers could join. Known as a variable annuity pension plan, it would adjust benefit promises up or down depending on actual investment returns, but unlike a 401(k) it would still pay a guaranteed monthly benefit once workers retire.
Under the terms of the new contract, once that pension is launched, Northwest Natural would expect to begin making contributions for the employees hired since 2009, using the 4% of payroll that it’s now putting into their 401(k).
The new agreement runs through May 31, 2028.
