Gov. Brown announces agreement to raise California minimum wage to $15 an hour

California Governor Jerry Brown, leaders of the state legislature, and union leaders on March 28 announced an agreement that when enacted and signed by Gov. Brown will raise the state’s minimum wage to $15 an hour by 2022.

The agreement is the biggest success so far for the Fight for $15 movement that started three years ago with strikes by fast food and other under paid workers.

“Make no mistake,” reads a posting of the Fight for $15 Facebook page. “Workers striking, protesting, fighting back, and taking part in the #FightFor15 are the reason that California agreed to a $15 minimum.”

The Fight for $15 movement started in 2012 in New York when after Thanksgiving, 200 fast food workers went on strike for minimum wage of $15 an hour.

Over the next three years, the movement spread to the Midwest and West Coast as thousands of under paid workers went on coordinated one-day strikes, held rallies and demonstrations, and took other street actions to make their voices heard.

In California, these street actions led to political organizing that succeeded in getting a $15 an hour minimum wage ordinance passed in several California cities including Los Angeles and San Francisco.

Labor unions played a key role in these local political organizing campaigns.

In 2015, unions set their sights on making $15 an hour the statewide minimum wage.

Two unions SEIU United Healthcare Workers West and SEIU California circulated petitions seeking to put a $15 an hour minimum wage referendum on the November ballot.

SEIU United Healthcare Workers West collected 600,000 on a referendum petition, and in March, the California Secretary of State certified the union’s initiative for a place on the November ballot.

SEIU California was still in the process of collecting signatures on its petition when Governor Brown announced the historic agreement.

Gov. Brown did not always support raising the minimum wage to $15 an hour, but the street actions and the political organizing campaigns made the Fight for $15 a popular issue.

A poll conducted in 2015 found that 68 percent of those surveyed supported making the California minimum wage $15 an hour.

The agreement announced by Gov. Brown will raise the current state minimum wage of $10 an hour to $11 an hour in 2017. In 2018, there will be a $0.50 increase. Then the minimum wage will increase by $1 a year until 2021. In 2022 it becomes $15 an hour. After 2022, minimum wage increases will be tied to increases in the cost of living.

Business with 25 or fewer employees will have an extra year to begin paying at least $15 an hour.

The agreement also makes home health care workers eligible for paid sick leave. California has a state law that requires employers to provide employees with three paid sick days a year, but home health care workers had been excluded from this benefit.

The agreement between Gov. Brown and labor is only the first step toward passing a new minimum wage law.

The language in the agreement needs to be put in a bill and passed by both houses of the California legislature.

That could be accomplished by adding the agreement’s language to a bill that has already been introduced in the legislature.

That could happen within a week.

Leaders of both houses of the legislature have both signed off on the agreement, which make its passage easier.

There is a chance that business interest could try to derail the bill, but Gov. Brown warned them that doing so would be bad for business.

SEIU California estimates that one-third of California’s workers will receive wage increases because of the new minimum wage law.

“Combined with workers who are already on a path to $15 because workers fought to achieve $15 minimum wages in Los Angeles and San Francisco, more than 6.5 million workers will have won a path out of poverty with a $15 wage,” reads a statement released by SEIU California about the agreement.

Guadalupe Salazar, a McDonald’s worker active in the National Organizing Committee of Fight for $15 said that the success in California shows what can happen when workers unite and fight together.

“When workers in New York City started this movement in 2012, nobody gave them a shot, and when we joined in California a few months later, people said we had no chance,” said Salazar. “But today, millions of Californians secured life-changing raises that will lift our families out of poverty. And more victories are on the way across the country. Our movement has unstoppable momentum. When workers join together and speak out, real change results.”

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Union launches boycott to save jobs

The union representing laid off workers at the Nabisco bakery in Chicago has launched a boycott campaign to protest the layoffs.

The Bakery, Confectionary, Tobacco, and Grain Millers Union (BCTGM) is urging consumers not to buy Oreos, Chips Ahoy, and Ritz Crackers made in Mexico.

The union on March 23 also announced that it would be sending teams of workers laid off at the Chicago bakery to communities all over the US to publicize the boycott.

Two days before the union made its announcement, Mondelez International, the owner of the Chicago bakery, laid off 277 workers at the bakery.

Mondelez, the world’s largest maker of snack foods, is in the process of moving much of the work done at the Chicago bakery to Mexico. When the process is complete, 600 of the 1200 jobs at the bakery will be eliminated.

In July 2015, Mondelez told its Chicago workers that instead of investing to upgrade the Chicago bakery, it would be shutting down some of its production and moving the work to Mexico.

Prior to the announcement, Mondelez had made the workers an offer that the company knew the workers couldn’t accept–agree to $46 million a year in concessions in perpetuity, and the company would invest in upgrading the plant.

David Durkee, international president of BCTGM called Mondelez’s offer a sham.

“They made an offer that was so ridiculous they knew it could never be accepted,” said Durkee.

Had workers accepted the proposed concessions, their pay and benefits would have been cut by 60 percent.

“I don’t know of anybody who could support a family if 60 percent of their pay is cut today,” said Jethro Head, vice president Midwest Region BCTGM.

According to Durkee, Mondelez’s offer was made to justify a decision that had already been made.

Mondelez was ranked 91 on the 2015 Fortune 500 list of the world’s largest corporations.

It is the product of a Byzantine restructuring of the commercial food business that involved Kraft, General Mills, Nabisco, and the RJ Reynolds Tobacco Company.

After a series of mergers, restructuring, and spinoffs, Kraft in 2010 split itself in two. One company continued to make and sell food products under the Kraft and other brands.

The other became Mondelez, a global snack food corporation, that makes Oreos, Cadbury candy, and a host of other popular snack foods.

The Wall Street Journal reports that the split was forced by Trian Fund Management, a hedge fund and activist investor with major holdings in Kraft.

Five years later, according to the Journal, William Ackman another hedge fund manager and activist investor acquired a $5.5 billion stake in Mondelez. The Journal reports at the time of the acquisition that Ackman “believes that Mondelez has to grow revenue faster and cut costs significantly or sell itself to a rival.”

At about the same time that Ackman was calling for cost cuts, Mondelez announced that it would be moving much of the work done at its Chicago bakery to Mexico.

Mondelez’s Chicago Nabisco bakery has been a fixture on Chicago’s Southwest Side since the 1950s.

Most of its workers are African American or Latino, many live in neighborhoods near the bakery, and quite a few have worked at the bakery for decades.

The Chicago Tribune reports that the Chicago bakery has been “crucial to Mondelez’s North American bakery business in part due to its location and because its skilled workers know how to make a variety of cookies and crackers.”

BCTGM says that the timing of the Chicago layoffs suggests that the company is trying to gain leverage just as Mondelez and BCTGM begin a round of negotiations on a new collective bargaining agreement that covers 2,200 BCTGM members who work for Mondelez  at six locations across the US.

The union’s boycott campaign will give workers and consumers across the country an opportunity to stand in solidarity with laid off Mondelez workers and those who remain on the job but are facing the possibility of more cuts to their wages and benefits.

“(Mondelez) wants Americans to buy Oreo, Ritz Crackers, and Chips Ahoy, but (the company) isn’t interested in investing in Americans to make them,” said Head. “(Mondelez) wants to box up our decades of experience and use it to exploit the good people of Mexico.”

Supreme Court backs Tyson workers in wage theft suit

The US Supreme Court ruled in favor of workers at a Tyson Food pork processing plant who sued the company for wage theft.

A 6-2 ruling by the court upheld the workers’ right to sue as a class.

A group of Tyson workers at the company’s Snow Lake plant in Iowa including Peg Bouaphakeo in 2011 sued Tyson for not paying them the correct amount of overtime.

Bouaphakeo and her colleagues must wear sanitary and protective gear on the job. The list of required gear is extensive. Putting the gear on (donning) and taking it off (doffing) is part of the job, and Tyson is required to pay its workers for doing it.

Instead of keeping records that accurately show how much time it takes to doff and don safety and sanitation gear, Tyson estimated the amount.

The workers contended in court that the company’s estimation of their donning and doffing time deprived them of overtime pay that they earned.

After the suit was filed, a judge agreed to make the workers suit a class action suit that would affect 3300 Tyson employees at the Snow Lake plant.

A jury trial was conducted. The jury found in favor of the workers and awarded them $5.8 million in unpaid wages.

Tyson appealed the decision, arguing that the judge should not have allowed the workers to sue as a class.

An appeals court ruled that the class action in this case was valid, and the Supreme Court upheld that ruling.

“(The Supreme Court’s) decision is a strong reaffirmation of workers’ rights to join together in taking their employer to court for failing to pay wages due under state and federal laws,” said Scott Michelman, a Public Citizen attorney and member of the team of attorneys who represented the workers. “The Supreme Court rejected the corporate defense bar’s strong push to eliminate the ability of workers and consumers to litigate common claims through class actions – which are critical to holding corporations accountable for systemic wrongdoing.”

Bouaphakeo and her colleagues, many of whom like Bouaphakeo are immigrants, work in a grueling and dangerous environment where animals are slaughtered and processed into meat sold in local supermarkets.

To ensure their own safety and the safety of the consuming public, workers on the production line must wear protective gear that includes aprons, gloves, sleeves, hairnets, hard hats, ear plugs, and personal protective equipment.

One of the personal protective equipment items that they wear is a stomach shield to protect themselves from wounds caused by the super-sharp knives wielded on the production line.

In 1988, the Department of Labor found that IBP, the company that owned the Snow Lake facility before Tyson, was not keeping records to show the actual time that its workers were spending donning and doffing their protective gear or how much time it took for the workers to walk from their dressing area to the production area and back.

A court agreed with the Department of Labor and issued an injunction requiring IBP to keep records.

IBP ignored the injunction, and in 1998, the department again filed suit.

When Tyson bought IBP in 2001 and took over management of the plant, it continued IBP’s practice of not recording the time that it took workers to doff and don their protective gear and walk to and from the production area.

That practice led to the suit by Bouaphakeo and her colleagues.

Bouaphakeo’s attorneys including Robert Wiggins, a plaintiff’s attorney from Birmingham, Alabama, argued that more than the original plaintiffs were adversely affected by Tyson’s refusal to keep records of the doffing and donning time and that they should be included as a class in the suit.

Making the suit a class action suit gives the workers a better chance of getting their grievances resolved.

Pursuing the claims on an individual basis as the Tyson and other employers would prefer would be expensive and time consuming, representing an insurmountable burden for many of those wronged by their employer’s action.

Business groups supported Tyson’s appeal and were hoping that the Supreme Court would use the appeal to build on its 2011 Walmart v. Dukes decision that women Walmart employees couldn’t sue the company for discrimination as a class.

The Bouaphakeo now goes back to the district court where the case was originally tried. The court will determine whether any of the workers included in the class action should be excluded from receiving the compensation owed them.

United workers demand their fair share of record-breaking profits

Members of two unions who work for United Airlines on March 17 joined together in solidarity to picket United’s San Francisco Airport terminal. The workers were demanding industry-leading collective bargaining agreements that reward workers for their role in helping United achieve record-setting profits.

The members’ two unions, the Association of Flight Attendants-CWA (AFA-CWA) and the Teamsters, have been negotiating new collective bargaining agreements for more than three years.

United wants its workers to accept a long list of concessions even though the company reported $7.3 billion in profits in 2015, the most in the company’s history.

United’s workers made sacrifices when the company was facing tough times. United promised them that it wouldn’t forget their sacrifices when good times returned.

The picketing union members want United to make good on that promise.

“We’re not going to roll over. We’re going to fight for what we deserve,” said Scott Abrahamson, a machinist at United’s maintenance base in San Francisco and a Teamsters shop steward. “We’re going to regain what was taken from us during the company’s bankruptcy.”

United declared bankruptcy in 2002 after the 9/11 terrorist attacks on New York City and Washington DC forced the airline industry into a tailspin, but that wasn’t the only rough patch for United.

A decade earlier, the company was struggling to keep afloat.

To keep the company in business, union workers in 1994 agreed to allow United to become the US’ largest employee-owned enterprise.

As a result of that agreement, union workers took pay cuts of between 12 and 15 percent. United employees also agreed to purchase 55 percent of the company’s stock.

When United filed for bankruptcy a decade later, workers had their pay cut by 14 percent and lost their pensions.

Workers also lost millions of dollars when United’s stock, which workers purchased to bail out the company, was rendered worthless by the company’s bankruptcy.

United emerged from bankruptcy in 2006, and in 2010 was doing well enough to buy out one of its competitors–Continental Airlines. The merger, for the most part, was completed in 2013.

As part of the merger process, United began negotiating new collective bargaining agreements with its union employees. The new agreements were supposed to bring both Continental and United workers together in united collective bargaining agreements that covered the new company’s various bargaining units.

The Teamsters, which represent more than 9000 United mechanics, and AFA-CWA, which represents 15,000 United flight attendants, have both been negotiating a new post-merger collective bargaining agreement.

“United Airlines is doing well,” reads a statement on AFA-CWA’s Our Contract website. “These are not concessionary negotiations.  These negotiations are about putting three work groups (United, Continental, and Continental Micronesia) together to complete this merger and move United forward.  It’s been three years, and it’s been long enough.  It’s Our Turn and It’s Past Time.”

Instead of rewarding its workers with their fair share of the company’s record-setting profits, United has been seeking more concessions.

For example, United wants to reduce the workers profit-sharing benefit by 67 percent.

At the same time United is looking to cut its workers share of the company’s profits, it is spending $3 billion to buy back its own stock. The buy back will increase the value of United’s stock, enriching its executives and major stockholders.

In addition to reduced profit-sharing, United wants its union employees to pay more for their health care, and it wants to reduce overtime pay for mechanics.

United also wants to create a two-tiered wage system for new-hire mechanics and reduce their sick leave and vacation days.

For flight attendants, the company wants changes to scheduling and work rules that will make their schedules less flexible and reduce their free time.

A federal mediator has intervened to help move the collective bargaining process along, but so far to no avail.

In October, United abruptly cut off negotiations with the Teamsters and made what amounts to a take-it-or-leave-it offer.

When Teamsters voted on the offer, 93 percent of them rejected it and authorized a strike.

“We voted down United’s proposed contract and authorized a strike because United betrayed us,” said Jay Koreny, a 29-year mechanic at Dulles Airport in Virginia. “We sacrificed so much, including our retirement security, to save United and help it come out of bankruptcy and earn record profits. . . I hope they’re ready for a strike, because we sure are.”

Negotiations between AFA-CWA are still ongoing.

Both unions have been engaged in a series of actions like the one at the San Francisco Airport aimed at winning a fair contract.

AFA-CWA’s next day of action will be April 21.

The Teamsters have taken the first step toward striking by petitioning the National Mediation Board (NMB) to release the union from its mediated negotiations. A decision by the NMB on the Teamster’s petition is pending.

Attack on workers’ comp hits snag in Oklahoma

The Oklahoma Workers’ Compensation Commission ruled that a portion of a new state workers’ compensation law is “unconstitutional.”

The Oklahoma Employee Injury Benefit Act enacted in 2013 allows employers in the state to opt out of the state’s Workers’ Compensation system and provide an alternative benefit plan for workers injured on the job.

The commission’s written decision states that “at first blush,” the new workers’ compensation law appears to require opt-out plan benefits to be as good or better than traditional workers’ compensation benefits, but “this is decidedly not so.”

“A closer look. . . reveals that the benefit plans permitted to be used to opt-out establish a dual system under which injured workers are not treated equally,” states the commission’s order. “The appearance of equal treatment under the dual system is like a water mirage on the highway that disappears upon closer inspection.”

For more than a century, workers’ compensation has provided workers with a safety net to protect them from the loss of income due to job related injuries.

But in the most recent decades, employers have been looking to fray the workers’ compensation safety net and shift its remaining costs onto workers and the taxpaying public.

State legislators in most states have been willing to help them.

“Since 2003, legislators in 33 states have enacted changes to workers’ compensation laws that either reduce benefits or make it more difficult for workers to qualify for it,” states a letter from ten US lawmakers to the US Department of Labor urging the department to start paying attention to this trend.

The lawmakers write that these states have been engaged in “a race to the bottom.”

The latest leg in this race to the bottom came in 2013 when Oklahoma passed its opt-out law.

Efforts organized by the Association for Responsible Alternatives to Workers’ Compensation (ARAWC) to pass similar opt-out laws are underway in Tennessee, Mississippi, Alabama, Georgia, Florida, and South Carolina.

Mother Jones reports that Walmart, Lowe’s, Safeway, and other large corporations are funding ARAWC.

The idea for creating an opt-out alternative to workers’ compensation originated in Texas.

Texas in 2001 overhauled its workers’ compensation laws.

Texas never required employers to purchase workers’ compensation insurance, but those that did purchased their coverage through a traditional workers’ compensation system.

In 2001, the state allowed employers to opt out of the traditional workers’ compensation system and set up alternative benefits plans for those hurt on the job.

Since then, 119,000 Texas employers, about one-third of the state’s employers, have opted out of traditional workers’ compensation and established their own company-controlled benefit plan.

A recent analysis of Texas’ opt out plans conducted by NPR and ProPublica shows that opt-out benefits are substantially lower than those paid by traditional workers compensation plans.

For instance, the average benefit paid by opt-out plans for the loss of a hand is $98,000; the national average is $145,000.

In addition, opt out plans give more control to employers. Employers can choose which doctors can examine a patient, which treatments will be approved, and which disabilities can be denied compensation. Employers also can terminate benefits at their discretion.

While the opt-out alternative is the latest attempt to weaken the workers’ compensation safety net, it has been preceded by others.

A report from NPR and ProPublica entitled the Demolition of Workers’ Compensation describes the impact of these efforts.

“Over the past decade, state after state has been dismantling America’s workers’ comp system with disastrous consequences. . .  The cutbacks have been so drastic in some places that they virtually guarantee injured workers will plummet into poverty,” write the report’s authors,  Michael Grabell and Howard Berkes.

Workers haven’t been the only ones to feel the sting of these so-called reform efforts. Taxpayers are paying more too. Workers without adequate workers’ compensation protection often end up relying on Social Security Disability Insurance, Medicaid, Medicare, food stamps, and other public assistance.

In their letter to the Department of Labor, the ten concerned lawmakers note that as a result of the dismantling of the workers’ compensation safety net, “employers now cover only 20 percent of the overall cost of a workplace injury” while workers, private health insurance plans, and taxpayers cover the rest.

“The magnitude of the cost shift to taxpayers from employers coupled with a race to the bottom in substandard benefits should not be ignored any longer,” write the lawmakers.

 

Appeals court rules against FedEx in its attempt to avoid collective bargaining

A three-judge panel on the US Court of Appeals for the Eighth Circuit has told FedEx that it must engage in collective bargaining with company drivers in Charlotte, North Carolina and Croydon, Pennsylvania who voted to join Teamster locals.

The Croydon and Charlotte drivers voted in 2014 to join Teamsters Local 107 and Local 71 respectively.

Since the two votes, FedEx has refused to recognize and bargain with the workers’ unions.

FedEx contended that the NLRB erred when it recognized the drivers as a group of workers with a shared community interests and called for a union representation election among the drivers.

The judges, however, disagreed with FedEx.

In ruling in favor of the NLRB, the court upheld the NLRB’s Specialty Healthcare framework for determining an appropriate bargaining unit for a union representation election.

The Specialty Healthcare framework allows a group of workers who share a community of interests to form a union even if the group does not include all other workers on the job.

In 2011, the NLRB ruled that a group of certified nursing assistants working at a nursing home operated by Specialty Healthcare in Mobile, Alabama could form a union that did not include nurses and other nursing home workers.

That decision ignited an outcry from anti-union businesses, which contended that the Specialty Healthcare framework would allow the formation of “micro unions” that would create an unfair burden for businesses.

In 2013, the Sixth Circuit Court of Appeals rejected an appeal by one of these anti-union businesses seeking to overturn the Specialty Healthcare framework.

Like their cohorts on the Sixth Circuit Appeals Court, The three-judge panel of the Eighth Circuit Court also refused to overturn the Specialty Healthcare framework and noted that the NLRB acted within its authority.

FedEx argued that the appropriate bargaining unit at Croydon and Charlotte should have included dockworkers, most of whom were part-time temporary workers, who would have then been eligible to vote in the union representation election.

But the NLRB found that the work of drivers and dockworkers did not overlap enough to create an overwhelming community of interests; therefore, if the drivers wanted a union to represent them alone they had a right to vote for such a union.

The Eighth Circuit Court judges concurred.

Before the Eighth Circuit Court panel issued its ruling, the NLRB ruled that FedEx had to bargain with another group of who voted to join the Teamsters.

The NLRB in February ordered FedEx to cease and desist from refusing to bargain with its drivers at its terminal in Stockton, California. The drivers voted a year ago to join Teamsters Local 439.

“This is a huge victory for the drivers who voted to form their union with Local 439, and we will continue to fight on behalf of these workers until they ratify their first contract,” said Ken Guertin, Local 439 secretary-treasurer after the NLRB issued its ruling.

The FedEx workers at Stockton, Charlotte, and Croydon joined drivers in South Brunswick, New Jersey in voting to join the Teamsters, which has been trying to organize non-union FexEx in a terminal-by-terminal campaign.

The terminal-by-terminal approach has been tough going for the Teamsters. They’ve lost six out of ten terminal elections.

In trying to keep its workers from joining a union, FedEx has used a carrot and stick approach.

In Croydon when drivers filed a petition for a union representation election, FedEx gave them an $0.80 an hour raise and stopped using an overly punitive report card to grade workers’ performance.

In Stockton when the organizing effort got underway, FedEx used the stick. In one instance it took away work hours from Edgar Aguilar, an active union supporter. The company recently agreed to pay Aguilar $4,900 in back pay for hours it took away from him at the time of the election.

Despite a mixed record of union representation elections at FedEx, the Teamsters said that they are still committed to organizing FedEx.

“The International Union, working side-by-side with all the freight local unions, is committed to this campaign over the long-term,” said Tyson Johnson, director of the Teamsters National Freight Division. “We hope that the company will get serious and negotiate a fair contract for the workers.”

The recent victories at the Eighth Circuit Court and at the NLRB should help boost the organizing campaign.

 

ATI’s illegal lockout ends after union members ratify new contract

Members of the United Steelworkers (USW) at 12 Allegheny Technologies Incorporated (ATI) plants in six states ratified by a five to one margin a new collective bargaining agreement.

The ratification vote ends a six-month lockout that the National Labor Relations Board (NLRB) said was illegal.

The workers will return to work on March 13.

The NLRB on February 12 issued a complaint charging ATI with illegally locking out its 2200 union workers.

Ten days after the NLRB ruling, the company and USW reached a tentative agreement that members ratified on March 1.

“(The agreement) doesn’t solve all our problems, but it’s definitely a victory for the union considering what the company wanted to do to us,” said Walt Hill, a USW Local 1196 member and the union’s contract coordinator to the Pittsburgh Tribune.

When bargaining began last spring, ATI, one of the world’s leading producers of specialty steel and other metal products, proposed a list of 145 concessions that USW said would “cost workers thousands of dollars a year and erode decades of collective bargaining gains.”

After months of bargaining, the union pared down the list of concessions, but on August 6, ATI presented its last, best, and final offer to USW negotiators and issued an ultimatum: Present the offer to your members by August 10 and recommend ratification.

The company’s offer still contained a long list of concessions including a two-tiered wage system that would lower wages for new workers, new, much higher health care costs, the removal of restrictions on outsourcing work, changes to the grievance procedure, and the elimination of retiree health care.

As a result, the union refused the company’s ultimatum.

On August 15, the company locked out its workers. The lockout affected ATI plants in Western Pennsylvania; Albany, Oregon; Lockport, New York; Louisville, Ohio; New Bedford, Massachusetts; and Waterbury, Connecticut.

Evidence suggests that ATI had been planning the lockout for some time. Before the lockout began, the company began hiring replacement workers and extra security guards.

After being locked out, ATI’s workers took up their positions on picket lines outside of the company’s factories and stayed there even as winter set in and temperatures fell below freezing.

Meanwhile, USW filed unfair labor practices charges against ATI.

In December, the NLRB informed the union that it would file an unfair labor practices complaint against ATI for initiating an illegal lockout and for bad faith bargaining before and during the lockout.

“In all my years as a negotiator, I have never seen a company engage in such obvious bad-faith bargaining,” said USW’s lead negotiator International Vice President Tom Conway after the NLRB informed the union of its intentions.

Nearly two months later, the board filed its complaint and scheduled a May hearing with an administrative judge.

Had the complaint been heard and had the judge concurred that ATI’s lockout was illegal, the company would have had to compensate workers for their lost wages, benefits, and other losses resulting from the lockout.

After workers ratified the agreement, the NLRB dropped its complaint against ATI.

When bargaining on the new agreement began, the union was facing some difficult circumstances.

The decline in oil prices and the subsequent cutbacks in oil exploration had weakened the demand for products that ATI sold to the oil and gas industry, its second biggest customer.

Sales to the industry had declined by 34 percent.

Furthermore, worldwide overproduction and a resulting glut, reduced demand for its flat-rolled metal products by 60 percent.

As a result, the company’s net income for the past two years has been negative.

Entering negotiations, ATI was looking to reduce labor costs and used the temporary lack of demand for it products as an excuse.

While the company was telling workers that business was bad and they needed to accept concessions, it was telling a different story to investors.

According to the company’s 2014 annual report, the company’s future was bright, a quick turnaround was on the horizon, and the company would be profitable again soon, perhaps as  early as 2016.

The collective bargaining agreement that the two sides finally negotiated does provide ATI with some opportunities for lowering its labor costs.

ATI will be able to reduce its pension liabilities because new hires will no longer be eligible for the union workers’ defined benefit pension, and the workers’ health insurance plan will  no longer pay 100 percent of health care expenses after deductibles are paid.

The new health insurance plan covers 90 percent of the costs and workers will pay the rest until reaching the maximum for out-of-pocket expenses–$15oo for individuals and $3000 for families.

But workers will now be eligible for quarterly profit-sharing bonuses, a feature that the union was able to restore after the company succeeded in eliminating them in a previous collective bargaining agreement.

Workers will also receive a $1 an hour increase in their base pay, and the company will pay another $0.50 an hour to the Voluntary Employee Benefits Account that funds the retiree health care benefit.

The company will pay a modest signing bonus and agreed to contract language saying that it will not eliminate jobs by outsourcing them.

Western Pennsylvania ATI workers interviewed by the Pittsburgh Tribune said that the final agreement was better than they expected.

“Overall, it’s not a bad contract,” said Kirby DeCroo to the Tribune. “It’s (better) than what they were trying to jam down our throats.”