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KapStone Imposes Latest Contract Offer

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According to a report this past week by The Daily News, Longview, Wash., USA, when KapStone (Northbrook, Ill., USA) employees arrived to work Monday, they were working under a new contract that their union refused to ratify. The company announced this past Thursday it will implement several key components of its last contract offer starting this week, acting after it declared a bargaining impasse the week before. Effective Monday, union members get a 4% general wage increase (for 2014 and 2015). Raises of 2% will be given on June 1 of 2017, 2018, 2020 and 2021. Raises of 2.5% will be given on June 1 of 2016 and 2019.

The announcement came after 15 months of failed negotiations, which included federal mediation and the union membership’s rejection of three different contract offers. For months the union has appeared on the brink of striking, but so far the leadership has not called for a walkout. No new contract talks are planned, either.

"The company’s last offer represents significant economic improvements from the prior contract," a four-year pact that expired in May last year, KapStone announced.

The contract offer that will be implemented was still rejected in July by about 68% of voting union members, according to the Association of Western Pulp and Paper Workers. Under federal law, the company can declare an impasse and implement its latest contract after good faith bargaining efforts have failed. AWPPW leaders, who represent 800 workers at the Longview plant, said they met this past Friday to discuss next steps, but they had no additional comment.

Union leaders said they would challenge the company’s declaration of an impasse to the National Labor Relations Board, but settling such appeal likely would take months. Local 153 will be continuing direct actions over the weekend by leafleting local breweries.

A handful of union members interviewed by The Daily News expressed frustration as the contract was implemented. Many members were irked that they won’t be getting a $2,200 signing bonus the company would have paid had the union membership ratified the deal.

The most controversial aspect of the new contract has to do with health insurance plans. The company says that changes to health care plans are needed to cut costs and to avoid a federal excise charge that would cost $2.7 million over the next two-and-a-half years, then millions more beyond that.

One union employee said he voted for the contract out of frustration and a desire to settle the issue. But he and other workers are still surprised that union leaders haven’t already called a strike.

"We are tired of being pushed around and are ready to walk. We deserve more from the company than to be bullied," said a KapStone operator who did not support ratifying the contract. He and others pointed out that working under a non-ratified contract will make employees "exceptionally vulnerable to unfair discipline" because there is "no fair grievance procedure" in place.

Analysts interviewed said investors, who theoretically could pressure the company, are more worried about the impact of the drought on wood chip supplies and the stability of containerboard prices than they are about KapStone’s labor relations.

"A strike of course is never good. You do want an agreement and you want good labor relations," said Paul Latta, portfolio manager at Glacier Peak Capital.

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