On June 15, 2022, Bay Area Hospital began talks with representatives of United Food and Commercial Workers Local 555, a Portland area-based union representing approximately 50% of our staff members, in the hope that, together, we could forge a new contract that would be fair to all.
As the months passed, Bay Area Hospital presented several proposals designed to bring Union members’ salaries up to or above market rates and enhance our contribution to the retirement fund for these employees. The UFCW rejected our first year package encompassing retroactive raises across the board, which on average, amount to a 14% boost to UFCW represented employees’ base wages. We also offered increases in shift differentials, doubled our 401(k) contribution, enhanced our PTO offerings, and, for the first time ever, incentivized employees for working additional shifts. Our total package represents a $4.7 million dollars investment in our employees in the first year of the contract. Unfortunately, the Union was intractable and would not budge from their demand of a nearly 20% average first-year across-the-board base salary increase, plus significant increases to differentials, pension, PTO, and other benefit increases. The union’s proposal will increase the hospitals costs by $13 million in the first year alone.
Bay Area Hospital has had a challenging year as the pandemic limited our ability to provide our services in the usual way. Our overall expenses have increased, and our balance sheets reflect an average $5.4 million loss for each of the last 13 months. As we announced in May 2022, responding to the pandemic has put an enormous financial strain on the Hospital. We are not alone in this situation. However, the fact remains that an additional $13 million increase in labor costs and/or a vote by the Union to strike would place us in an untenable financial situation and we may very well be forced to close our doors.
Conversations between the two parties continued without further progress until January 20, 2023, when a State mediator came to Coos Bay to assist us in reaching an agreement. A total of 14 days of mediation ended on February 1 without an agreement and the Union declared an “impasse” or stalemate on Friday, February 17. Both parties have until February 24 to forward their last and final proposals to the mediator.
The impending threat of a strike by the Union, which could result in over half of our employees refusing to work, will disrupt patient care services, increase expenses, and put the Hospital’s future at certain risk. The Hospital is open to ongoing conversations with the Union, and if the Union agrees to accept our final offer we can move forward with the proposed wage increases, getting money into the hands of our employees without further delay, and continue caring for our patients without disruption.
As the chairman of our hospital board, Dr. Thomas McAndrew, stated in August of last year, “Passions can arise with contract negotiations, and we need to get back into the business of caring for patients. . . We have the job of improving the health of our community. . . We can’t afford to fail.”