Acme Markets told its largest union Wednesday that it was unilaterally terminating its contract, effective April 30.
The union, United Food and Commercial Workers Local 1776, has scheduled a 7 p.m. Monday meeting at Temple University's Liacouras Center for its 2,700 Acme employee members to discuss options: a strike, a lockout possibility, or working without a contract.
"A work stoppage is always the last resort," said Wendell Young 4th, who heads the union local. He said Acme clerks have been working under the terms of a contract that expired in February 2012.
"Acme is trying to avoid their responsibility [to pay into the workers' health fund] by terminating the contract," said Young.
A 10 percent increase in payments to the joint employer-employee fund is due May 1, Young said.
The company said the increases were the reason it terminated the contract.
The increases, which are mandated not by the contract but by a separate board of trustees overseeing the health and welfare fund, "need to be negotiated as part of the collective-bargaining process, rather than unilaterally implemented," said Christine Wilcox, communications vice president for New Albertsons Inc., Acme's Boise, Idaho, parent company.
Wilcox said Acme would adhere to pay schedules and work rules in the expired contract until a new contract was negotiated.
The New Albertsons grocery-store company is controlled by an investor group led by Cerberus, a New York private-equity firm, which bought Albertsons in 2013.
"Once the new company came in, they asked us to be patient," Young said. "They wanted to do a little cleanup and a little fix-up." Young said he agreed.
"They've had some good results, but they don't want to share."
Young said that, once the contract has expired, either side could withdraw from the relationship with seven days' notice.
The two sides last bargained Monday.
Local 1776 covers Acme workers in Pennsylvania.
Other UFCW locals, representing workers in South Jersey, the Shore area and Delaware, have already settled.
A management letter to employees said that Local 1776's health costs were 25 percent to 100 percent higher than the other unions'.
"Their circumstances are different," Young said.
Local 1776 represents older stores, and the workers are older, as well, while health-care costs in Southeast Pennsylvania are higher, he said.
In 2013, the health and welfare fund, run by trustees from the union and from Acme and other supermarket companies, approved a 10 percent increase in employer contributions.
Acme paid at the old rate, according to a December lawsuit that the fund filed against Acme in federal court. The suit said Acme owed the fund $1.7 million, plus interest.
Other investors in Acme's parent company include Philadelphia-based Lubert-Adler Partners, Kimco Realty Corp., Klaff Realty L.P., and Schottenstein Real Estate Group.