Dan Pilcher

CACI Senior Vice President

& Chief Operating Officer

Phone: 303.866.9600

E-Mail: dpilcher@cochamber.com

Thursday, May 21, 2009

CACI Thanks Governor on Veto of HB-1170

But Urges Caution on “Son of HB-1170” in 2010 Legislative Session

Late Tuesday afternoon, Governor Bill Ritter vetoed HB-1170, which would have provided Unemployment Insurance (UI) benefits to union workers who are “locked out” by an employer in a “defensive” action.  If the Governor had signed the bill, it would have taken effect this July 1st.  Here’s the Governor’s veto message:

FOR IMMEDIATE RELEASE

TUESDAY, MAY 19, 2009

CONTACT

Evan Dreyer, 720.350.8370, evan.dreyer@state.co.us

GOV. RITTER VETO MESSAGE ON HOUSE BILL 09-1170

May 19, 2009

Honorable Colorado House of Representatives

67th General Assembly

First Regular Session

State Capitol

Denver, CO  80203

Ladies and Gentlemen,

I am filing with the Secretary of State House Bill 09-1170, “Concerning unemployment insurance benefits for locked-out employees.”  I vetoed this bill as of 4:55 p.m. today, and this letter sets forth my reasons for doing so.

There are currently ongoing contract negotiations between the United Food and Commercial Workers No. 7 and several grocery stores, including King Soopers, Safeway, Albertsons, and City Market.  The parties to these negotiations have been working hard for several months to try to reach an agreement.  I believe it is ill-advised and counterproductive to enact legislation that materially impacts the relative bargaining position of parties in the midst of ongoing negotiations.  In these troubled economic times, I am deeply concerned about the effect a strike or lockout of employees would have on grocery store workers and consumers across the state, and I am concerned that signing this bill into law will make a negotiated resolution of the grocery store contract more difficult, not less.  Therefore, under these circumstances, the state should not interject itself into these contract negotiations by enacting House Bill 09-1170 into law.

The merits of this bill, however, are worthy of future discussion and perhaps future legislation.  In 1999, the statutory provision that House Bill 09-1170 would repeal and reenact was substantially amended for the first time in twenty-four years, upsetting the longstanding balance governing when locked-out and striking workers were eligible for unemployment benefits.  The issue of how best to restore this balance is a debate that we should have.  But the debate should be had and legislation crafted outside of the shadow of a major contract negotiation that has the imminent threat of a strike or lockout.

Accordingly, I have vetoed this bill.

Sincerely,

Bill Ritter, Jr.

Governor

In CACI’s view, the bill would have given the United Food and Commercial Workers’ Union Local Seven leverage in its contract negotiations with Safeway, King Soopers and Albertsons because it would enable the union to use the UI Trust Fund—which is funded only by employers—to subsidize its labor dispute with the grocers if the grocers defensively locked out the union workers and if the negotiations should drag out past July 1st.

Today, The Denver Post editorialized in favor of the veto:

http://www.denverpost.com/opinion/ci_12413919

CACI and the Colorado Retail Council, a CACI member, along with several other business organizations, fought long and hard during the legislative session against the bill, whose main advocate was the UFCW Union Local Seven.  For coverage of the veto by The Denver Post, click on:

http://www.denverpost.com/ci_12407294

http://www.denverpost.com/ci_12405602

Yesterday, CACI delivered a letter to the Governor Bill Ritter, thanking him for his veto:

May 20, 2009

The Honorable Bill Ritter, Jr.

Governor of Colorado

136 State Capitol

200 East Colfax

Denver, CO  80203

Dear Governor Ritter:

On behalf of the Board of Directors of the Colorado Association of Commerce & Industry (CACI), I am writing to thank you for vetoing HB 09-1170, regarding unemployment insurance benefits for locked-out workers.  We sincerely appreciate your consideration of the concerns CACI expressed on behalf of Colorado’s business community throughout the legislative Session and as outlined in my veto request.  The members of CACI strongly believe that this veto is a thoughtful and appropriate policy decision that protects the future of workers and their employers. 

As clearly stated in your veto message, this legislation would have impacted the current contract negotiations between UFCW Union Local Seven and King Soopers, Safeway, Albertsons, and City Market.  The implementation date in this bill was a highly debated issue in the General Assembly, and enactment of HB 09-1170 would have interfered with the progress of those negotiations and potentially incite a strike or lockout situation. 

We also respect the challenging decisions you must make in determining enactment of a bill, and future considerations of such legislation.  However, it is important to note that CACI will continue to oppose this legislation or any related legislation if reintroduced by Rep. Casso or any other legislator in future sessions.  As outlined in my veto request, CACI supports the balance in current law regarding Unemployment Insurance benefits, and we will continue to support that law which has helped avoid a lockout in multi-employer bargaining contracts during the last 10 years. 

In closing, CACI sincerely appreciates your consideration of the economic and bargaining implications imposed in HB 09-1170, and we are thankful for your commitment to the protection of jobs in Colorado. 

Sincerely,

Chuck Berry

President

Colorado Association of Commerce and Industry

CACI Letter Urges Governor to Veto HB-1170

On May 8th, CACI sent a letter to Governor Ritter, urging him to veto HB-1170.

May 8, 2009

The Honorable Bill Ritter

Governor of Colorado

136 State Capitol

200 East Colfax

Denver, CO  80203

Dear Governor Ritter:

On behalf of the Colorado Association of Commerce & Industry (CACI), I respectfully request a veto of HB-1170, which was recently adopted by the Colorado General Assembly.  This bill was amended during the legislative process, and, in final adoption by both the House and Senate, HB-1170 includes an implementation date of July 1, 2009.  The implementation date was a critical issue in the debate over this bill, and I ask for your consideration of this issue and other important concerns outlined below as you determine whether or not this legislation should become law: 

Balance in Current Law:

Under current law, there is a balanced approach that offers Unemployment Insurance (UI) benefits to union workers based on which party initiated the labor dispute and provides protections for both parties under the following conditions: 

1)  Allowing UI benefits to be awarded if an employer tries to force an agreement through a lock-out of its employees (an offensive lockout); and

2)   Not allowing UI benefits if an employer locks out employees based on a defensive action, or to protect their property or operations (a defensive lockout). 

The current law has been in effect since 1999, and there have been no labor disputes in multi-employer bargaining in the last ten years.  Prior to 1999, the law reflected the language of HB-1170.  In 1996, the United Food and Commercial Workers’ Union (UFCW) Local Seven struck King Soopers in a “whipsaw” strike intended to force King Soopers to agree to the agreement.  Safeway then locked out its union workers in a defensive action.  HB-1170 still allows an opportunity for a whipsaw strike through coordinated bargaining efforts.

Effective Date of Legislation:

The effective date of this bill significantly affects the current negotiations between the UFCW Union Local Seven, on the one hand, and King Soopers, Safeway and Albertsons, on the other, based upon the contract between these parties which expires on this Saturday, May 9, 2009.  If you sign HB-1170 into law, it will become an incentive for the UFCW Union Local Seven to initiate a labor dispute once the law becomes effective because UI benefits could be paid to union workers during that lock-out period.  Based on the payout of those benefits, there will be little incentive for those locked-out union workers to return to work and there will be little urgency to reach an agreement.  This situation could potentially prolong the negotiations for weeks or even months.

Intent of Unemployment Insurance Benefits:

In March 2009, Colorado’s unemployment rate reached a 20-year high, climbing from 5.8 percent in December to 7.5 percent, which means that 204,800 Coloradans were jobless, according to the Colorado Department of Labor & Employment (CDLE).  HB-1170, if you sign it into law, would allow monies paid by employers into the UI Trust Fund to go instead to union workers during a lockout at a time when unemployment is skyrocketing and the UI Trust Fund is headed towards potential insolvency. 

CACI strongly believes that UI benefits are intended to be used as temporary assistance for workers who have lost their jobs through no fault of their own and who are actively seeking work.  Union workers who are locked out of their jobs during a labor dispute have not lost their jobs.  These union workers are not actively looking for other work, unlike those who actually receive UI benefits.  The payout of UI benefits to locked-out union workers will put an additional strain on the UI system that is a critical resource for those truly unemployed. 

Role of CDLE  in HB 09-1170:

HB-1170 would place on the CDLE the primary responsibility for deciding whether or not UI benefits should be granted to locked-out union workers based on the Department’s determination of whether a lockout was “offensive” or “defensive.”  This potential change in law would force the State to be a decision-maker in labor disputes that now is appropriately not provided in current law.  The result of the State’s involvement in these decisions will very likely be expensive litigation involving the CDLE, businesses and unions. 

In closing, CACI strongly encourages you to veto this legislation because changing current law is not only unnecessary, but it also changes the dynamic of labor negotiations by allowing the State to pick winners and losers in labor disputes.  Maintaining current law will allow the continuing balance in labor disputes that has been effective for ten years.  I appreciate your consideration of my request, and please do not hesitate to contact us with any questions or concerns.

Sincerely,

Chuck Berry

President

Colorado Association of Commerce and Industry

CACI Issues Press Release on Governor’s Veto

Here’s the press release that was sent out yesterday by Pete Webb Public Relations, a CACI member that provides communications and public relations assistance to CACI.

NEWS RELEASE

FOR IMMEDIATE RELEASE                                           

May 20, 2009

Contact:

Dan Pilcher, CACI, 303-866-9600

Pete Webb, Pete Webb PR, 303-796-8888

CACI Congratulates Governor Ritter on Veto of HB-1170,

The Unemployment Insurance Benefits Bill

for Locked-Out Union Workers

Denver—The Colorado Association of Commerce and Industry (CACI) today congratulated Governor Bill Ritter for his veto yesterday of HB-1170, the bill that would have provided Unemployment Insurance (UI) benefits to union workers during a labor dispute if they are ”locked out” by an employer as a defensive measure.

CACI and the Colorado Retail Council, which is a CACI member, and several other business organizations had urged the Governor to veto of the lock-out benefits bill because of the potential negative effect on the state unemployment insurance fund and because it would inject an unneeded element into conventional labor negotiations.

“We’re pleased the Governor has listened to the business community on this issue,” said Chuck Berry, CACI President.  In a letter hand-delivered this afternoon to the Governor’s Office, Berry wrote the following:

“We sincerely appreciate your consideration of the concerns CACI expressed on behalf of Colorado’s business community throughout the legislative Session and as outlined in my veto request.  The members of CACI strongly believe that this veto is a thoughtful and appropriate policy decision that protects the future of workers and their employers.”

Berry, a former Speaker of the Colorado House of Representatives, also noted that the bill, if signed into law, “ . . . would have impacted the current contract negotiations between UFCW Union Local Seven and King Soopers, Safeway, Albertsons, and City Market.  The implementation date in this bill was a highly debated issue in the General Assembly, and enactment of HB 09-1170 would have interfered with the progress of those negotiations and potentially incite a strike or lockout situation.”

Berry, however, also cautioned the Governor that CACI will oppose future attempts to pass bills similar to HB-1170.  “As outlined in my veto request, CACI supports the balance in current law regarding Unemployment Insurance benefits, and we will continue to support that law which has helped avoid a lockout in multi-employer bargaining contracts during the last 10 years,” Berry wrote.

About CACI:

Established in 1965, the Colorado Association of Commerce and Industry is the statewide chamber of commerce.  With almost 500 members statewide, employing nearly 200,000 workers, CACI’s mission is to champion a healthy business environment.  To achieve this mission, CACI has key four objectives: (1) maintain & improve the cost of doing business; (2) advocate a pro-business state government; (3) increase the quantity of educated, skilled workers; and (4) strengthen Colorado’s critical infrastructure (roads, water, telecommunications and energy).

CACI’s members include individual businesses, about 30 trade associations, about 40 local chambers of commerce and several local economic development organizations.  CACI’s lobbying team works with state lawmakers to promote business-friendly laws, and has a successful track record of securing legislation that benefits all Colorado businesses.  CACI is a non-profit organization funded solely by its members. For more information, visit the CACI Web site at www.cochamber.com or call 303-831-7411.

For More Information . . .

CACI members with questions about HB-1170 and CACI’s position should contact Chuck Berry, CACI President, at 303.866.9652 or e-mail him at cberry@COchamber.com