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IBT, California Liquor Wholesalers Agree On
Pacts Covering Sales, Non-Sales Workers

Daily Labor Report
October 6, 1999

San Francisco - Newly ratified contracts covering some 2,200 sales and non-sales employees of California liquor, wine, and spirits wholesalers contain wage and benefits improvements, including a Section 401(k) retirement plan option, according to the International Brotherhood of Teamsters and employer representatives.

Southern Wine and Spirits of America and Young’s Market - two employers that bargain as a multiemployer group - and 15 Teamsters locals ratified three-year agreements covering non-sales employees. The contracts provide these workers with a 3 percent pay raise of 60 cents an hour on May 31, 1999, and May 31, 2000, and 65 cents on May 31, 2001, according to employer attorney Stuart Korshak. Korshak, a partner with Korshak, Kracoff, Kong & Sugano, said Oct. 1 that the settlement was reached Sept. 23 and approved by 82 percent of members voting Sept. 25 and 27.

Salespeople at Young’s Market will receive a 12 percent increase in the commission schedule in a separately negotiated three-year agreement, according to Rome Aloise, secretary-treasurer of Teamsters Local 853 and chairman of the negotiating committee. Young’s recently changed its commission schedule mid-contract, while Southern Wine and Spirits did not.

The three, three-year contracts will expire may 31, 2002, Korshak said.

The method, which still allows salespersons’ wages to increase as prices increase, "makes the commission schedule more lucrative," Aloise said Oct. 4. "I think what the employer felt was a pressure to keep good sales people" who were taking sales jobs elsewhere, he said.

Salespeople at Southern Wine & Spirits have ratified a new one-year agreement that gives them an immediate 12 percent pay increase. The contract contains a wage reopener on May 31, 2000, at which time the parties will either agree to negotiate over the recommendation of the compensation specialist brought in to analyze the schedule or to keep the current commission schedule.

"This is the first significant change in the commission in the industry since I’ve been around and it’s been about 25 years," Aloise said. The sales contract was approved Sept. 11 by 73 percent of members voting.

Benefits Improvements. The contract adds 15 cents per hour to the pension plan contribution, Korshak said. The agreement also provides a health and welfare option so locals can choose either maintenance of benefits or an additional 25 cents per hour per year contribution to cover additional costs of benefits - about $500 per month per covered worker - with any unused portion going into an individual 401(k) plan for workers. Any increase that exceeds the employer contribution will come from workers. Insurance costs have been rising about 10 percent a year, he said.

Locals in Southern California, Northern California, and the Central Valley have different health insurance plans. Two locals chose the full maintenance of benefits while the remaining 13 chose the 25 cent contribution plan.

"It’s an incentive for the unions to keep health insurance costs lower and the reward is the workers can put the unused portion into a 401(k)," Korshak said. "In a sense it has some elements of a cafeteria (benefits) plan. But the creation of a 401(k) in a unionized environment . . . is a fairly new phenomena."

The total settlement with wages and health and welfare equals about a 4 percent increase, Korshak said.

Other changes include a new procedure to track denials of requests for personal time off, calling for joint meetings to analyze and understand why the leave is being denied and whether companies are following proper procedures.

Another provision, Korshak said, involves using interest-based bargaining to develop a commission schedule for salespeople. The contract also includes an agreement to allow management flexibility in assigning workers to specific jobs but not imposing such requirements on existing employees.

The contract covers sales and office employees and drivers in Teamsters Locals 683 in San Diego; 952 in Orange County; 848 in Los Angeles; 630 in Los Angeles; 853 in the east San Francisco Bay Area; 296 in San Jose; 856 in San Francisco; 150 in Sacramento; 70 in the East Bay; 624 in Napa; 431 in Fresno; 166 in San Bernardino; 186 in Santa Barbara; 381 in Santa Maria; and 87 in Bakersfield.

California law prohibits liquor manufacturers, wholesalers, and retailers from owning one another. Southern and Young’s are the only remaining liquor middlemen in the state after years of consolidation, Korshak said.

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