A&P asks to back out of 2 worker contract clauses

WHITE PLAINS, N.Y. — A&P has asked a bankruptcy court judge to set aside two key union provisions — bumping rights and full severance pay — after reaching a negotiation impasse with labor groups, officials said in court documents.

The supermarket wants to completely eliminate bumping rights, saying the administrative burden and costs associated with allowing workers to do that are too high and undesirable to would-be buyers of its stores. Bumping rights allow employees who work the longest for the company and at a store slated to close to take the job of a less senior worker at a supermarket that will continue to operate.

The other sticking point is the amount of severance pay A&P will pay and when, the documents filed late Tuesday indicate.. The supermarket has proposed paying employees who will lose their jobs as part of the bankruptcy 25% of the severance they are entitled to on a "timely basis" with a maximum cap of $10 million for all workers. The rest of the severance would be paid later, depending on how much remains after the stores have been sold and what other A&P creditors are due as part of settling the bankruptcy case.

Besides these two sticking points, both parties appear to have reached an agreement on most of their other issues. A hearing on the matter is scheduled Monday in U.S. Bankruptcy Court here.

John Niccollai, head of the United Food and Commercial Workers Local 464A, which has an office in Tarrytown, N.Y., said union members are circulating a petition opposing A&P's request, which they will present to the bankruptcy court judge. When A&P last filed for bankruptcy in 2010, the union agreed to concessions that it valued at $625 million in exchange for reassurances that A&P would honor union provisions going forward.

"Now they're looking to knock all of that out," Niccollai said.

Union leaders have pledged to fight for all the provisions in their collective bargaining agreements, he said.

"It's a question of who's going to take the hit," Niccollai said. "Why should the working people take the hit?"

A&P filed for Chapter 11 bankruptcy July 20, seeking to close at least 25 stores as soon as possible and sell the rest of its about 300 stores — branded as A&P, Food Basics, Food Emporium, Pathmark, Superfresh and Waldbaum's — in Connecticut, Delaware, Maryland, New Jersey, New York and Pennsylvania.

Acme, Stop & Shop and Key Foods have put in bids for 118 stores though A&P said those offers don't include union provisions, such as bumping rights and assumption of pension plans.

A&P called it "a certain deathblow to the hopes of an orderly Chapter 11 liquidation" if the company were to lose those three bids with an estimated potential loss of $213 million. Other would-be buyers also would be dissuaded from putting in a bid, the company said in documents.

"The threat of such bumping would likely drive down the price of bids, as potential purchasers would not know with any certainty what they would be buying or whom they would employ," A&P said.

Severance pay also is crucial because A&P estimates costs will be as high as $54 million — and as high as $90 million if the 118 stores with bids also are affected.