CUNA Mutual, Union At Impasse With Outsourcing Big Sticking Point

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CUNA Mutual Group and the Office and Professional Employees International Union Local 39 failed to renegotiate contracts for some 1,400 employees by the April 1 deadline and were still in talks as The Credit Union Journal went to press.

The primary sticking point centers on an issue much in the news: outsourcing.

"We haven't used much outsourcing in the past; we've outsourced less than 50 union positions over the last five years," said CMG spokesperson Sydney Lindner. "However, we want to retain the right to make those difficult decisions in the future."

Among the other issues at stake: going from a 37-hour work week to a 40-hour work week without a pay increase and reducing the number of health benefits package choices from five to three. Also on the table is a wage package that includes a 4% raise in 2004, 2% in 2005 and 2% in 2006, with employees who meet expectations to be eligible for an additional 2% tacked on to each of those raises.

"CUNA Mutual will characterize this as being about money, but it's not money. We could agree on the changes to the benefits and to parts of the wage proposal right now," said John Peterson, business manager of OPEIU Local 39. "But the proposal to have an unlimited right to subcontract is a problem. They could promise 20% wage increases, but that wouldn't matter if they can do away with as many positions as they want."

As part of the outsourcing proposal, the binding arbitration process that gives union members some recourse in the event they lose their jobs to subcontractors would be eliminated, Peterson said, and that's a dangerous prospect given what happened in 2002, he suggested.

"They subcontracted housekeeping, and 25 people lost their jobs," he related. Those workers filed grievances and the arbitrator found those grievances were valid and required CUNA Mutual to give them their jobs back. Arbitration is supposed to be final and binding, but [CMG] is taking us to court over it. Without binding arbitration there is no recourse for employees."

No More Handshakes

The union is also dismayed by what it perceives as a deteriorating relationship with the company. "They brought in Phillips Kimble. He was with Caterpillar in the 90s when they had that awful strike, and he is bringing that kind of attack to CUNA Mutual Group," Peterson said. "They want to take away dues deduction to cripple us financially. It used to be we could sit across the table from [management] and extend the contract on a handshake. There has been a drastic change from the relationship we had in the past."

Indeed, if the way negotiations are going is indication, there has been a change. Three years ago, the parties logged 39 hours of face-to-face negotiations and managed to close the deal by 10 a.m. on March 31, nearly 14 hours before the deadline, Lindner recalled. At press time, CMG and OPEIU Local 39 had already logged 60 hours of face-to-face negotiation, failed to meet the deadline, and were still "quite far apart" on the primary issues.

As for some of the other issues, the union suggests that increasing the workweek by three hours without also increasing pay is unfair, but CUNA Mutual said that's an oversimplification. "Our employees are paid above the market rate. In those cases where someone would be below the market rate for 40 hours, we would bring them up to market," Lindner observed. "But we won't give an across-the-board raise to all 1,400 union employees, not when some of them will still be making 172% of market, even after we bump the workweek up to 40 hours. That's just not the way to run a business."

CUNA Mutual Group has $11 billion in assets and 6,000 employees, with 1,400 employees belonging to the union.

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