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Kaiser Permanente, unions reach tentative contract agreement as planned strike is canceled

The agreement includes annual raises and a workforce development program to address looming staffing shortages.

Jeff Lagasse, Associate Editor

California-based Kaiser Permanente and three unions representing its workers have reached a tentative contract settlement that will likely nix a strike the unions had planned for sometime in October.

The three unions, representing workers in Washington, California, Oregon and Colorado, had planned the strike based on what they called unfair labor practices, with Patricia Johnson-Gibson, a healthcare vice president at SEIU Local 105 in Denver, saying by statement that Kaiser has shifted its practices to prioritize maximizing profits for executives rather than emphasizing patient care.

The union alleged that Kaiser had been automating and outsourcing union jobs, raising patient premiums, understaffing its facilities, and attempting to reduce wages and benefits as it underwent union contract negotiations. The health system responded by calling the threat of a strike a bargaining tactic and said the previously proposed contract offer was fair.

If ratified by workers in the coming weeks, the new four-year agreement between Kaiser and seven unions in six states and the District of Columbia would avert the nationwide strike that was scheduled to begin October 14. If the strike had been held as planned, it would have been the nation's largest since UPS workers walked off the job for more than two weeks in 1997.

The agreement includes a workforce development program to provide free educational opportunities for thousands of workers to help fill an expected shortage of hundreds of thousands of licensed healthcare jobs with a culturally appropriate workforce. Kaiser will provide $130 million in funding for the program over the four years of the contract.

It also promises annual raises of 3% in each of the four years for workers in California, Oregon and southern Washington. In Colorado, Hawaii, Virginia, Maryland, the District of Columbia and the rest of Washington state, workers will receive raises of 3% the first year and 2% plus a 1% lump sum the following three years. In those states, workers will have an opportunity to turn the lump sums into regular raises if the company hits certain financial performance benchmarks.

Retirement benefits will be protected for current and former employees, are there will be an expansion of retirement benefits in Hawaii, Virginia, Maryland and the District of Columbia.

Further provisions of the agreement include a ban on subcontracting and stronger restrictions on outsourcing; and a committee to oversee the implementation of patient-friendly technology.

WHAT'S THE IMPACT

The agreement narrowly avoids a tense showdown between unions and the health system, as the current contract is set to expire by the end of this month.

Kaiser workers had gained support from many elected officials and presidential aspirants, including Senators Kamala Harris, Bernie Sanders and Elizabeth Warren, as well as former Texas Representative Beto O'Rourke and House Speaker Nancy Pelosi.

While Kaiser Permanente is a nonprofit, it has reported profits of $11 billion since Jan. 1, 2017, including $5.2 billion just in the first half of 2019, according to the Coalition of Kaiser Permanente Unions. In addition, it has amassed more than $37 billion in reserves and pays at least 36 executives more than $1 million annually.

THE LARGER TREND

Workers already protested on September 2 in Oakland, California, the site of Kaiser Permanente's headquarters. After a 30-minute rally, the workers engaged in civil disobedience by blocking an intersection near Kaiser Permanente Medical Center.

Earlier this month, California Gov. Gavin Newsom signed into law a bill that requires Kaiser Permanente to provide more data about the revenue and profits of individual hospitals, whereas now it lumps those figures for all facilities into two broad categories: "Northern California" and "Southern California." Of the roughly 400 hospitals operating in California, all but the 35 owned by Kaiser Permanente must comply with financial reporting requirements on a per-facility basis.

ON THE RECORD

"This agreement will allow us to rebuild the worker-management partnership that has been so important to all of us in making Kaiser successful over the last 20 years," said Georgette Bradford, an ultrasound technologist at Kaiser in Sacramento. "Reaching an agreement was not easy, it had lots of twists and turns, but in the end we accomplished what we set out to do -- reach an agreement that is good for patients, workers and our communities."

Twitter: @JELagasse

Email the writer: jeff.lagasse@himssmedia.com