Haggen should have warned workers of bankruptcy, unions say

updated: At 8:40, Sept. 11, to include Haggen’s statement.

Haggen should have told its employees about its plans to file for bankruptcy before those workers learned about it from news reports, a union president said in a letter to his members in Washington state.

Todd Crosby, president of United Food and Commercial Workers Local 21, faulted the grocer for failing to communicate news of the bankruptcy.

The Bellingham-based grocer filed for Chapter 11 bankruptcy on Tuesday in a federal court in Delaware. The company says it wants to reorganize around its most profitable stores.

“It is simply wrong for all of our hard-working Haggen employees to have learned about this bankruptcy filing on the local news,” Crosby said in a letter sent late Wednesday night. “For decades Haggen and our local union communicated openly about the status and the future of the company, but that clearly changed with new ownership.”

Haggen’s ownership changed in 2011 when the Comvest Group, a private investment firm, bought a majority interest from brothers Don and Rick Haggen.

UFCW 21 lawyers are analyzing the bankruptcy filing to see how it will affect union members. The union’s contracts with Haggen are still intact, Crosby said in the letter.

“As we have made clear to Haggen, they have a responsibility to do what is right, and we will stand and fight for your hard-earned wages and benefits,” he said.

In a statement Friday morning, Haggen said: “We are extremely grateful to our employees who have worked so tirelessly on behalf of Haggen, especially over the last several months, and thank them for their dedication, loyalty and commitment. Based on the process and timeline to file,  the company was unfortunately unable to directly inform all employees of the Chapter 11 filing before it became public. Haggen is committed to communicating with our employees throughout this restructuring period and will continue to do so.”

The company secured $215 million from its creditors to continue operating and keep products on the shelves while it sells stores.

About 80 percent, or nearly 8,700 of Haggen’s 10,880 employees are union members, according to court documents.

Haggen’s bankruptcy filing comes just seven months after it acquired 146 stores as part of the merger earlier this between Albertsons and Safeway. The Federal Trade Commission ordered Albertsons to shed the stores over anti-competition concerns.

With the acquisition, Haggen grew from 18 stores with 2,000 employees to 164 stores with nearly 11,000 employees across the West Coast.

Troubles started early with customers in communities with new Haggens complaining about prices. Last month, the Bellingham grocer announced plans to close or sell 27 stores in California, Arizona, Nevada, Oregon and Washington.

About a week ago, the company filed a $1 billion lawsuit against Albertsons. Haggen said it didn’t get the support from Albertsons that the purchase agreement or the FTC required.

The UFCW International Union also released a statement on Haggen’s bankruptcy filing, pledging to protect the livelihoods of its members.

“As difficult as this bankruptcy process is, our message to Haggen is simple – we expect Haggen to do what is right by their hard-working employees and their families,” the statement said.

This isn’t the first time unions have taken issue with how Haggen handled its expansion.

UFCW Local 770, representing Los Angeles area Haggen workers, filed grievances with both Haggen and Albertsons last month, alleging that layoffs and reduced hours for employees at Haggen stores violated a collective bargaining agreement.

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