Standoff in garbage contract 'important nationally'

Depending on your viewpoint, Waste Management President Larry O'Donnell's star turn in the CBS reality show "Undercover Boss" confirms everything you need to know about America's largest trash company.

O'Donnell spent a week doing entry-level jobs for his company, including riding on the back of a garbage truck, sorting recycling and cleaning portable toilets. At one job, he gets fired for not working quickly enough; at another, he marvels at the speed necessary for one garbage truck driver to cover her route.

At the end of the show, which debuted in early February, O'Donnell sheds his coveralls for a corporate suit, reveals himself to the workers who trained him and promises to change how he does business.

Skeptics in the labor movement note that nowhere in the show are unions or profits mentioned, though the company has dealt with five recent strikes around the country. Other viewers say the episode accurately portrays the difficulty of collecting and disposing of refuse, and it shows that Waste Management values its employees.

Those seemingly irreconcilable perspectives — that of labor and management — mirror the current standoff here between union garbage haulers and Waste Management. About 400 members of Teamsters Local 174 and 117 have been working without a contract since March 31. The company presented what it said was its final offer April 2. The union quickly rejected the offer, and the two parties haven't met since.

National observers say more is at stake than service for an estimated 1 million customers in King and Snohomish counties.

"What happens in Seattle is important nationally," said Ken Paff, national organizer for Teamsters for a Democratic Union, a reform arm of the union. "The West Coast typically has stronger unions and better contracts than other parts of the country. This is an aggressive company trying to take back some hard-won gains."

But other observers say that with high unemployment and stagnating wages, the union isn't realistic about what it can hope for in a new contract.

"There's a huge disconnect between union leadership and the current economic reality," said Joe Marra, a Seattle labor attorney who represents management in contract disputes.

The company says that under its final offer, top pay would rise to about $60,500 per year and that most workers would earn another $9,000 in overtime. With health-care and pension contributions, the total package is worth about $110,000, said company spokeswoman Jackie Lang.

The union Tuesday accused the company of refusing to negotiate in good faith. It said Waste Management's final offer doesn't guarantee retirees health-care costs, as do contracts with two other local firms, Allied Waste and CleanScapes. And the union said the company boosted hourly pay by reducing its contribution to the employee pension plan.

Teamster locals have struck Waste Management — or been locked out — at several cities over the past few years, and with varying results.

The company successfully imposed a less-generous medical plan on south Los Angeles garbage workers after a two-week strike in 2007. And it replaced union-pension plans in Milwaukee with 401(k) plans after a five-week strike in 2008, reducing the value of longtime worker pensions by half to two-thirds, according to news accounts.

"They're obviously trying to maintain costs and drive profits," said Al Kaschalk, a senior analyst for Wedbush Morgan Securities, a Los Angeles investment-banking firm that follows the company.

But in the Seattle area, Kaschalk said, the company's profit-margins are "skinny," in part because King and Snohomish counties, and not Waste Management, own the transfer stations and landfills and charge the collection companies "tipping fees" to dump waste.

He also noted that financially strapped municipalities that contract with Waste Management may not be willing to pass on to customers increases in labor costs.

Waste Management has brought into the Puget Sound region what's known as its "Green Team," replacement workers from other parts of the country who would provide service in the event of a strike or company lockout. It's also advertised locally for replacement workers and said it has interviewed 100.

After the south Los Angeles strike, the company permanently hired 40 replacement workers and 40 union workers lost their jobs.

A 26-day strike in Oakland protected the union's right to strike, but the company won concessions on its ability to fire unsafe workers. Waste Management also paid the city $3 million in penalties for uncollected garbage and agreed to spend nearly $5 million more to enhance recycling services.

Waste Management, which picks up about 60 percent of the residential garbage in Seattle, could face penalties here up to $300,000 per day if the garbage isn't collected under its contract with the city, said Andy Ryan, spokesman for Seattle Public Utilities.

But Marra, the Seattle labor attorney, said past strikes aren't necessarily good guides for what to expect from Waste Management or the Teamsters in the Puget Sound region. He said every local union negotiates its contracts separately, and each has issues unique to its membership.

"When I hear bargaining is at an impasse, to me that means one party has given all it's going to give, and the other still wants more," he said.

Lynn Thompson: 206-464-8305 or lthompson@seattletimes.com