The $100 million UNFI distribution center in Centralia includes 606,795 square feet of dry warehouse/offices and 529,000 square feet of computer-controlled cooler/freezer space, along with a trucking maintenance and fueling facility.
NKF
Warehouse work has always been competitive among grocery distributors, and for more than 100 years workers in Tacoma played a major role in that world.
That ends December 2019 when the final operations at the former Supervalu distribution center in Tacoma are wrapped by new owner UNFI, the work transferred to a facility in Centralia amid a labor battle with the local workers’ union.
As UNFI sees it, the move to Centralia was not a clear “apples to apples” transfer of jobs like a move from one warehouse in the city to another, but a wholesale revamp and launch of a new distribution center bringing together work that in the past had been performed in Seattle, Tacoma and Portland.
The changes also closed operations in Auburn and expanded Ridgefield operations.
Centralia was chosen for its proximity to its customer base and logistics.
UNFI has appealed a labor arbitrator’s decision that ruled in favor of the workers and for UNFI to honor the Tacoma workers’ contracts at the nonunion Centralia site.
In a statement sent late Saturday to The News Tribune, Jill Sutton, general counsel, corporate secretary and chief legal officer for UNFI, said:
“UNFI has offered the same competitive wages and benefits in place at our Centralia facility to Tacoma associates interested in joining us. We extended this offer directly to associates while still offering them the ability to benefit in the event that UNFI is not successful in its appeal of the misguided arbitration decision.”
“While we hoped to have more veteran associates from Tacoma join us in Centralia to enhance the ramp-up period earlier in the process, UNFI is now approaching full operations at the facility and seeks to understand as soon as possible if any former Tacoma employees desire to seek employment.”
The union is holding firm with the arbitrator’s decision.
“We have a legally sound arbitration decision that supports our position that those layoffs are unlawful. If we prevail in the case, and we believe that we will, over 200 of our members will be entitled to a significant back-pay award,” Teamsters Local 117 told The News Tribune in response to questions earlier this month about where things stand.
2019 has become a year where laid-off Supervalu/UNFI workers face an uncertain future in their labor fight with the company while UNFI’s CEO and other top executives saw six-figure bonuses approved by the company’s board and shareholders.
It’s also been a year that saw more than 100 years of employment history leave Tacoma for a new era in food distribution.
From West Coast Grocery to UNFI
The Tacoma Supervalu warehouse was where grocery items came for distribution to Whole Foods, Metropolitan Market, Saars Marketplace, Marlene’s, Thriftway, even military commissaries worldwide, among others.
Before it became a Supervalu site after 1985, it was West Coast Grocery, which started in Tacoma in the 1890s and ultimately served more than 1,000 retail grocers in the Northwest.
In February 2005, then-regional president Larry Langsweirdt told The News Tribune in a business profile that Supervalu considered its long-term prospects in Tacoma “very good,” finding its strength in supplying independent operators in a world of Walmart supercenters.
“Through the last 20 years or so, there’s been a number of changes within the industry. We have positioned ourselves so that we feel not only do we have a good history, but we also have a good future in the region,” Langsweirdt said then.
When you search for Supervalu/West Coast Grocery articles in The News Tribune archives, the most frequent references are not found in the business section but the obituaries, a testament to the numbers those companies employed and the years some Tacoma workers put in at their jobs.
“Miland James Krumpos … spent 43 years at West Coast Grocery/SuperValu; ending his supervisory career in 2004 …”
“Roger Allen Brunk … After working at West Coast Grocery/SuperValu in Tacoma for 29 years, he happily retired …”
“Robert Thomas (Tom) Gould … embarked upon a 32 year career with West Coast Grocery Co, first in sales and eventually managing the Retail Development Division, developing supermarkets throughout the Pacific NW and AK.”
The company touted its workers’ ties to the community.
“We are very active in the food bank network system,” Langsweirdt said in 2005. “Our employees also (have) been very active with United Way, the Festival of Trees, March of Dimes walk and other causes.”
‘I was making a great living’
Four years after Langsweirdt extolled the benefits of working at Supervalu, Kenneth Trice, 41, was looking for a job where he could not only survive but thrive.
Trice joined Supervalu in Tacoma in October 2009, a welcome opportunity as the former part-time real estate agent’s world collided with the housing crisis and the Great Recession.
To get by, Trice had worked for other employers at lower-paying jobs. Then he joined Supervalu.
It was a life-changing experience.
“I couldn’t have asked for more. I had good health care, good benefits. … I was making a great living,” Trice told The News Tribune.
It wasn’t a perfect place. There were good and bad managers, but the pay and benefits made it worth it, he said.
“It was the difference in grocery shopping at the Dollar Tree, and there’s nothing wrong with that,” he said. “I did that, and am not ashamed to say it. I did what it took to survive, but to go from that and be able to walk into Safeway, Fred Meyer, and all the selection they offered.”
He paused. “It made a big impact.”
Flash forward to October 2018 when a competitor in the industry, wholesaler United Natural Foods Inc., known as UNFI, finalized a $2.9 billion purchase of Supervalu, including the Tacoma distribution site at 1525 E. D St.
In February, UNFI announced the start of its Northwest consolidation plans and ultimate move to Centralia.
It would be a while before anyone from management discussed a possible move with workers, according to Trice and other workers who have spoken with The News Tribune in the months since.
After the initial talk of transferring to Centralia, workers learned their current contract would not be following them if they took jobs at the new nonunion site.
A labor arbitration victory for workers that ruled UNFI had to honor the terms of their contract with the relocation to Centralia was met not long after that with UNFI filing an appeal in federal court.
In October, workers saw the first round of layoffs.
Sutton said in a statement at the time of the initial appeal: “It completely contradicts regulatory and labor law principles to force UNFI to create a wage and benefit structure that would apply to one set of employees and not others with the same positions and responsibilities in Centralia.“
Trice’s last day was Nov. 26.
He received paperwork from UNFI, a separation agreement and general release. Instead of signing, he wrote three words across the signature space, in all caps: “HONOR MY CONTRACT.”
The current fight has to play out, he told The News Tribune on the Friday before Christmas, and it’s not just about himself or UNFI.
“In my opinion, there are going to be a lot more industries going down to Centralia, and we have to, regardless of political beliefs of people in general, we have to educate other people that they have a right to be represented, and have the power of bargaining against companies to fairly negotiate livable wages,” Trice said.
As of Dec. 17, according to Local 117 in response to questions from The News Tribune, UNFI had laid off “all of our members from the main facility, with the exception of three members who are working out of the smaller SVI warehouse.”
Paperwork dated Dec. 16 received by former employees shows the company again extending an offer for work in Centralia.
Photographic copies of the paperwork were obtained Dec. 26 by The News Tribune.
UNFI on Dec. 27 confirmed it did send out the letters.
The offer is open to members of Local 117 and Local 313 at the site’s current rates of pay, and it emphasizes taking the offer puts the worker at no risk to waiving rights in current negotiations or potential future settlement awards, according to the document.
It is the same offer that’s been on the table and referenced publicly through the negotiations and sent as an invitation for employment in Centralia in another letter in November to the Tacoma workers.
The December letter was sent to encourage response and simplify the application process as the company hopes to add experienced Tacoma workers at a facility that’s operating mostly with new hires.
All the current offer asks for is a signature by Jan. 10.
The offer also represents a pay structure in line with the nonunion pay scale set for Centralia.
That means workers such as Trice would take a sizable wage reduction from what he earned at the Tacoma site if accepted as it stands now.
UNFI makes clear the Centralia facility will be fully operational and fully staffed early next year, though had hoped to see more of the Tacoma workers join early on.
In a follow-up statement sent late Saturday to The News Tribune, Paul Green, chief supply chain officer, said:
“UNFI is pleased with the progress of operations at Centralia as we begin to improve performance that will benefit regional customers. To meet all of our stakeholders’ needs, we will continue to pursue labor agreements that include competitive employment terms as well as the flexibility we need to best serve customers in today’s ever-changing distribution environment.”
Workers on social media in November expressed misgivings about signing any offers from UNFI, potentially “signing away everything,” as one noted in a post on Facebook.
Would this new offer change anything?
Trice remains skeptical. Without union representation, what’s the point?
“If UNFI is actually working in good faith of their employees …. We don’t need to sign anything,” he told The News Tribune via email.
Payouts and property sales
On Dec. 5, John Scearcy, secretary-treasurer of Teamsters 117, took to Facebook to note UNFI’s Christmas celebration for its workers in Centralia.
“I have 268 Teamsters in Tacoma that were illegally and inappropriately laid off right before the holidays,” he wrote. “I hear that they are all free with no plans and could use a free meal! We are all available to be your guests at this event …”
In mid-December, the Centralia site developed for and leased by UNFI changed hands from its original developers to a property management group for $195 million, touted as the largest single asset sale in the Northwest for the year.
UNFI will continue to lease the site.
In UNFI, Exeter Property Group sees “a tenant firmly committed to the region for the long term,” NKF executive managing director Bret Hardy said in the release.
The sale of a Supervalu property in Auburn was announced that same week, to be redeveloped as Bridge Point Auburn 200. No word yet as to when sale of the Tacoma site will close.
That same week, UNFI’s CEO Steve Spinner and other top executives saw approval by shareholders of the executive compensation plan at the company’s annual shareholder’s meeting. The International Brotherhood of Teamsters had called for a rejection of the payouts, noting how the company’s stock had dropped following the Supervalu acquisition.
Spinner has consistently defended the acquisition.
“There’s no perfect acquisition, but acquiring Supervalu puts us in a position to win,” said Spinner, according to a Jan. 17 article posted by industry monitoring site Grocery Dive.
In the end, shareholders in a nonbinding vote supported the company’s earlier decision to award Spinner a $759,556 bonus.
The complete listing of UNFI executive compensation packages is found on Page 32 of the company’s Nov. 5 proxy statement. The amount represents 65 percent of his base salary and 43 percent of the bonus target, the same bonus target percentage (though not same amount) awarded to other company executives.
The report states how the amount was determined:
“For internal equity purposes, the Committee determined to base Mr. Spinner’s payout on the achievement and level for adjusted EBITDA, which was 43.49%. Payments of the bonus amount were made in a lump sum to each Named Executive Officer as described in the table below following the filing of our Annual Report on Form 10-K for the year ended August 3, 2019. The amount in the table below reflects Mr. Spinner’s actual payout.”
It notes that its then-chief financial officer, Mike Zechmeister, “resigned prior to the bonus payout date and therefore forfeited any potential bonus payout.”
Zechmeister left UNFI in August to work as CFO for a transportation and logistics company.
The holidays and the future
Back in Tacoma, Trice is taking care of his elderly parents who live with him.
An auto accident they were in earlier this year means he’s taking them to doctor and physical therapy appointments.
“My dad is diabetic and has COPD, high blood pressure. I’m taking him to doctors, back and forth. He still has problems walking,” Trice said. “I have a couple of dental surgeries in January, that’s the last month of our health insurance.”
Teamsters Local 117 has established a hardship fund for its workers facing similar situations.
According to the union, in the first two weeks, the fund paid out more than $35,000 in assistance to 21 members to help avoid evictions, utility shutoffs, car repossessions and loss of medical insurance.
That money benefited not just the union members but also their families, including a total of 58 children, according to the union.
Trice’s nephew, Christopher Canche Lopez, wrote The News Tribune about the family’s Christmas in an email:
“There was no Grinch that was able to steal Christmas in our home and no Scrooge to stop by. … My father and uncle, Cosme and Kenneth, stay strong to show us what they believe in even in the hardest of times.”
“It’s amazing that when a family comes together for each other, we can still make great food to celebrate an amazing day with, and for each other.”
Trice says he’s ready to get on with life and go to Centralia with his union contract intact.
A few years ago, before he even knew of UNFI, he bought some acreage in Packwood as a place for himself in retirement. He’s paid for utilities to the site but has had to put septic development on pause for now.
He’s already timed the commute to Centralia from Packwood, where he has yet to build.
“It’s about an hour,” he said. “It’s a lower speed on Highway 12.
“We want our jobs down there. And we will go down there, we will learn and we will go down there, whatever it takes.
“They haven’t won. They have a contract and they have to respect it. And the longer this goes, the more they are going to have to pay.”
Assistance fund
Those who wish to contribute to UNFI Tacoma workers’ assistance fund can send donations to Teamsters Local 117, c/o UNFI Hardship Fund, 14675 Interurban Ave. S., Suite 307, Tukwila, WA 98168.
