Kaiser applauds deal with unionized workers: some say pact has caused a split within union

While Kaiser Permanente officials say they are happy with the recent settlement they reached with their unionized employees, the Service Employees International Union claims it had no alternative but to agree to the health plan's terms.

The settlement - which apparently kindled a division among the SEIU Local 399's membership - spotlights the lack of clout organized labor has in the local health care market, union officials said.

The five-year pact was ratified on June 19 by 54 percent of SEIU's rank and file, most of whom are support staff at Kaiser's hospitals and outpatient clinics. It will freeze the wages of Kaiser's 10,000 unionized employees in Southern California until the end of next year while the starting wages of new hires could be sliced by more than 25 percent in some instances. Employees will also be required to make small co-payments on their medical benefits.

Michael McCabe, manager of Pasadena-based Kaiser Southern California Region's human relations department, said the settlement will cut costs an average of 4 percent per year.

"Our goal was primarily to lower our labor costs, and we've achieved that," McCabe said. "With the competition that is in the health care, we've been getting battered because of our prices, and we need to be able to lower them."

Health care industry observers agree that Kaiser's unionized workers - who earn an average of $14 an hour - are overpaid, in some instances as much as 40 percent compared to similar positions at non-unionized hospitals. The SEIU disputes that notion.

Salary questions

"I don't think it's unreasonable to pay an x-ray technician $35,000 a year when doctors are making $200,000, and CEOs of non-profits are making half a million dollars a year," said Tom O'Connor, spokesman for SEIU Local 399, which represents Kaiser workers in the Los Angeles area.

"Are we happy with the new contract? The answer is no, but it was the best we could do. To have done better would have required a level of action and mobilization that the rank and file was not ready to take on."

O'Connor added that Kaiser's unionized employees would have had to strike for at least 60 days to affect negotiations with the health plan, which operates the largest health maintenance organization in California. The union had planned a one-day strike at Kaiser clinics on May 31, but abruptly canceled it as negotiations advanced.

"The reality is that only 10 percent of the health care workers in the Los Angeles area are unionized, and that gives us little leverage against employers," O'Connor said.

Meanwhile, the negotiations created a splinter group within the union that calls itself the Caregiver and Healthcare Employees. Both union and Kaiser officials confirm the group attempted to file a grievance with the National Labor Relations Board to get the SEIU Local 399 decertified, but the NLRB rejected the attempt because it was filed after the contract had been ratified. The group is appealing the NLRB's ruling, O'Connor and McCabe said.

Jim Eggelston, the Oakland attorney who represents the Caregiver and Healthcare Employees, could not be immediately reached for comment.

Kaiser's McCabe said the SEIU's gripes about the contract may be linked to the dissent caused by their own members.

"It may be a symptom of the internal issues they are dealing with," he said. "I think there is some concern on their part that this group filed a petition with the NLRB, and that this group is claiming that they sold out. They don't want to appear that way.

"Nobody held a gun at (the rank and file's) head to sign the deal. In fact, the SEIU recommended to their membership that they accept the offer," McCabe added.

According to O'Connor, there is one silver lining in the pact. A committee that union and Kaiser representatives have agreed to form to create a "market-based" wage structure that will realign employees' pay over the long-term. The committee will also develop a system to pay employee bonuses based on Kaiser members' satisfaction with service and enrollment growth.

"It will give us a lot stronger position in the future," O'Connor said.