Bruno’s Supermarkets has filed a motion with a US bankruptcy court asking for clearance from parts of its union contract, as the company pursues a restructuring that could include the sale of some stores.
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The retailer said it has filed the motion asking for clearance to reject collective bargaining agreements with the United Food & Commercial Workers (UFCW) union.
Bruno’s warned that provisions that force a buyer to keep the contracts in place could torpedo sales efforts and ultimately force the chain to liquidate.
The retailer is hoping the procedural step may preserve jobs at Bruno’s and Food World locations and make the sale of stores easier.
The motion was made following extensive discussions over several months between Bruno’s and the UFCW regarding the company’s current collective bargaining agreements (CBAs). The UFCW represents nearly two-thirds of Bruno’s staff.
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By GlobalDataBruno’s non-unionised staff and other grocery store employees have already made “significant sacrifices” in their terms and conditions of employment, the company said, but Bruno’s and the UFCW have been unable to reach agreement on modified CBAs.
Under the terms of the proposed modified CBAs, union staff would still receive financial and other benefits that non-union staff do not receive.
“We want to preserve jobs. Our motion is intended facilitate a process that we believe will do just that at our Bruno’s and Food World locations,” said Jim Grady, chief restructuring officer for Bruno’s. “What we’re proposing would help in our restructuring efforts and makes it more likely that both union and non-union teammates will retain their jobs through a sale to a strategic buyer.
“We intend to continue working with the UFCW and remain committed to reaching a resolution that facilitates a sale while recognising the union’s role as authorised representative for many of our teammates.”
Bruno’s made the filing under Section 1113 of the US Bankruptcy Code. Under the code, the court will likely schedule a hearing to be held in around 14 days and would be expected to rule within 30 days following the commencement of the hearing.
The company said it will continue to try to reach an agreement with the union before such a court hearing.
