Bargaining Update - CHEU Negotiations


Palomar Health met with the Caregivers and Healthcare Employees Union (CHEU) on July 14 for continued contract negotiations.  The parties discussed the following topics:
  • Article 16 – Compensation
  • Article 25 – Pension  
  • Article 35 – Safe Patient Handling / Lift Program
  • Article 32 – Health and Safety
  • Article “X” [new proposed article] – Community Health Needs
In connection with Article 25 – Pension, Palomar Health shared an overview of significant risks and liabilities associated with the Steelworkers Pension Trust. In addition to substantial employer risks, we have concerns for our employees. Among other things, the Steelworkers Pension Trust does not allow employees to choose their own investments. In addition, an employee would have to participate for 5 years, or lose (forfeit) whatever benefit he or she might have accumulated up to that time. 

On the other hand, employees are always 100% vested in their contributions to the Fidelity §401(a) plan and begin vesting in the employer contributions after participating for just 2 years.  For all these reasons, we declined to switch to the Steelworkers Pension Trust.  Palomar Health has committed to continue its financially generous and market/industry competitive 6% contributions to the Fidelity §401(a) Money Purchase Pension Plan.  This represents a significant, ongoing investment in our employees’ retirement future.

As noted in previous updates, the average step percent increase for CHEU members is currently 2.28%.  Although the parties’ contract recently expired, Palomar Health has offered to continue these step increases. In addition to the step increases, Palomar Health proposed the following Cost of Living Adjustment (COLA) increases:
  1. On the first day of the pay period beginning after January 1, 2018, all Caregivers would receive a 1.50% Cost of Living Adjustment (COLA) increase.
  1. On the first day of the pay period beginning after January 1 of any subsequent years the contract is in effect, all Caregivers would receive a 0.75% Cost of Living Adjustment (COLA) increase.   
Previously, we had offered a .75% Cost of Living Adjustment (COLA) increase effective the first day of the pay period beginning January 1, 2018.  We then increased that to 1.25%, and now 1.50%.  On the other hand, the Union made no movement in its salary demands.  CHEU instead chose to repeat its previous demand of 3.25% twice per year (6.5% annually).  The only change the Union made in any of its economic proposals was to lower its demand for lead differential pay by fifty cents from $2.50 to $2.00.  That is still an increase over the current $1.65 differential.

CHEU and CNA’s current proposals cost in the range of $40 million. The unions’ proposals are not realistic or sustainable.  On the other hand, Palomar Health has been making proposals that are both competitive and financially supportable.  We will continue to make adjustments throughout the bargaining process.  In doing so, we must consider our employees’ and patients’ needs, along with fiscal responsibility.     

Both parties ended the bargaining meeting by expressing disappointment in the other side’s economic proposals.  We are still far apart in our positions.  

The Union stated that it wants to settle this contract soon.  However, they did not show any movement at all today in their salary demands.  Palomar Health is fully committed to bargaining in good faith and would like to meet again next week.  CHEU refused to meet again until July 28, saying they had other priorities to attend to.  We invited the Union to reconsider not only its proposals, but its availability for bargaining. We would like to move these negotiations along as efficiently as possible.

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