Local 234 Holds Line on Health Costs in Fairbanks Scales Contract

December 18, 2008

Members of UE Local 234 ratified a new three-year agreement on October 31, covering workers in both the factory and office bargaining units at Fairbanks Scales. The company had agreed to release members from work early, with pay, to attend the ratification meeting. In a somewhat unusual development, the company delivered its final offer after the members had gathered for the meeting and were waiting to vote. After a short discussion with the membership and the contract due to expire at midnight they voted by secret ballot to accept the company’s offer.

The new agreement includes wage increases totally 8 percent, with raises on November 1 of each year in the amounts of 3, 3 and 2 percent. Pay for lead people was increased fro m 15 cents to 40 cents above the rate of the highest-paid worker in the group.

For the first time, factory workers will have one paid sick day a year. Any employee who does not use the sick day by the end of the year will be compensated one-half day’s pay. Life insurance and accidental death and disability increase by $1,000 each year, with life insurance reaching $28,000 in the third year and AD&D reaching $23,000. The weekly sickness and accident benefit will increase by $20 each year, to $360 in year three.

The company had sought much higher deductibles, out-of-pocket maximums, and prescription co-pays, but union members pushed back. In the resulting agreement, weekly employee contributions to the PPO increase by only $2.50, from $25/single, $50/employee and one dependent, $74/employee and two dependents; to $27.50, $52.50, and $76.50. In-network deductibles are unchanged, and out-of-network deductible increase somewhat. Annual out-of-pocket maximums (in-network) increase by $250 single, $500 family, though for out-of-network the increases are more severe. The health plan is modified to cover some previous exclusions when they are medically necessary, and a wellness fair will be held once a year.

Prescription co-pays go from two tiers to three (generic, preferred and brand name.) The generic co-pay will remain $20 ($40 for mail order 90-day supply.) The brand name co-pay increases by $5, to $45, but the co-pay for preferred drugs will be only $30. The co-pay for brand name mail order 90-day prescriptions also goes up $5, to $85.

The company will also offer a health reimbursement arrangement (HRA) which is similar to a health savings account (HSA) – a high-deductible health plan, at premium contribution rates that are only slightly lower than the PPO.

Physical examination allowance increased from $300 to $400. Dental coverage for basic and major services increased from $750 to $800, and orthodontic services increase from $750 to $800. The safety shoe allowance was increased from $60 to $75, and $10 was added onto each category of safety glasses.

The pension plan was frozen in negotiations three years ago; new hires since then have been covered by a 401(k), with the company matching worker contributions on up to 1 percent of pay. In the new contract that match was increased to 1.5 percent, and employees covered by the defined benefit pension will also receive a match on their 401(k) contributions of up to 1 percent. For workers covered by the pension, early retirement at age 64 was improved; such retirees will receive 95 percent of their full pension – previously they would have gotten 91.84 percent. The pension multiplier remains $17.25, but workers who turn 60 over the next two years will get a $22 multiplier for their years of service from ages 60 to 65.

“The hard work of the membership is the biggest reason we got the contract we did,” said Local 234 President Bob South. “All of the membership stood behind the committee. The company could see this at the end, and that was when they stopped fighting us.”

The union negotiating committee consisted of Bob South; Shirley Nutting, vice president; Polly Scott, chief steward – office; Tonya Brown, chief steward – factory; Lisa Cady, steward – electronics; and George Moore, Jr., steward – mechanical. They were assisted by UE Field Organizer Rachel Clough.


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