Kaiser Permanente union authorizes strike vote amid stalled contract negotiations

The side of a building that reads "Kaiser Permanente"
The union of 24,000 nurses and other healthcare professionals say that the California provider's weak pay increase proposal will lead to staffing shortages. A Kaiser representative responded by highlighting the high cost of care and union members' existing above-average compensation. (Sundry Photography/Shutterstock)

Leaders of a union representing 24,000 nurses and other healthcare professionals have authorized a member vote to strike against Kaiser Permanente after negotiations stalled on a contract set to expire at the end of the month.

The United Nurses Associations of California/Union of Health Care Professionals (UNAC/UHCP) said in a statement that Kaiser affiliate leadership unanimously decided to call the member vote Thursday night.

The group also notified (PDF) Kaiser’s leadership that it would immediately be halting its participation in partnership activities, such as workplace safety committees and labor-management partnership councils.

UNAC/UHCP is one of 21 bargaining groups in the Alliance of Health Care Unions (AHCU) negotiating national contracts with the California-based integrated care provider. The parties have participated in a labor management partnership for the last 24 years that UNAC/UHCP warned is now “on life support.”

The disagreement between the union and Kaiser centered on the latter’s proposal of a 1% raise for nurses and other healthcare workers as well as a new employee payment plan that UNAC/UHCP said will ultimately lead to lower compensation.

RELATED: Kaiser Permanente requiring all 240K employees, physicians to be fully vaccinated against COVID-19

These proposed terms come at a time when the majority of UNAC/UHCP membership say they are experiencing mental health concerns primarily driven by staffing issues. With the COVID-19 pandemic still in full swing, the terms would be “certain to make staffing shortages worse” as employees weigh their current roles against sign-on bonuses and other incentives being offered at other health systems, the union wrote.

“At their heart, Kaiser Permanente’s proposals attack the fundamental principle of fairness on the job: equal pay for equal work,” Joe Guzynski, executive director of UNAC/UHCP and a chief negotiator on the union’s bargaining team, said in a statement. “How are you going to recruit nurses if you do that? How are you going to protect patient care if you don’t invest in those who provide it?”

The last scheduled negotiations between AHCU and Kaiser concluded Sept. 10, and, as of Friday, there were no new dates scheduled before the Sept. 30 contract expiration date, Guzynski said.

UNAC/UHCP’s statement also highlighted Kaiser’s reported $2.2 billion in 2020 operating income—a positive cash flow trend that has only accelerated in 2021.

In an emailed response statement, Kaiser Permanente Senior Vice President of Human Resources Arlene Peasnall acknowledged the increased strain on front-line workers and said the organization has provided nearly $600 million in employee assistance since the start of the pandemic.

RELATED: Kaiser Permanente posts $3B in profits in Q2 as membership in health plan increases

She also noted that Kaiser paid out 100% or more of all eligible union-represented employees’ performance bonuses last year, which amounted to “thousands of dollars a person on average” and could have been reduced by pandemic disruption.

However, the system’s proposed contract is constrained by the “increasingly unaffordable” cost of healthcare, more than half of which is due to escalating wages, Peasnall said. Kaiser employees that are represented by AHCU already earn 26% above the average market wage, she said.

“On August 25, we offered a proposal that includes wage increases for all current employees and no changes to the current retirement plan,” she said. “It also guarantees no wage cuts for current employees. These increases are on top of the already market-leading pay and benefits our employees receive, as confirmed by independent wage surveys and the government’s own data compiled by [the Centers for Medicare & Medicaid Services].

“To help address future costs and ensure we continue to be affordable for our members, we are proposing a market-based compensation structure for those hired in 2023 and beyond that will allow our new employees to be paid above market wages on average, enabling us to continue attracting and retaining top talent,” she said.

The union disagreed on the proposed compensation structure’s impact, describing it as “a complex formula tied to a faulty market wage study” that would lead to “massive cuts by 2023” and "hamstring future hiring.”

“Changing wages is going to hurt Kaiser in the long run because you’re going to see it impact the standard of patient care,” Loan Nguyen, an occupational therapist at Kaiser Permanente Riverside and an UNAC/UHCP member, said in a statement from the union. “It’s going to lower professional standards and patient access.”

RELATED: As NNU blames hospital cost cutting for labor shortage, industry groups keep the focus on COVID-19

Peasnall said Kaiser is interested in continuing talks and has called on union leaders “to continue to work constructively toward an agreement, rather than call on nurses to walk away from patients who need them during this pandemic.”

The union, meanwhile, characterized the disagreement as the latest disintegration of a labor management partnership that both sides said has long served as a national model for successful collaboration between labor and management.

“Kaiser Permanente has stepped back from the principles of partnership for some time now … and they have violated the letter of our partnership agreement in the lead up to our present negotiations,” UNAC/UHCP President Denise Duncan said in a statement. “Despite that, we are here and ready to collaborate again if KP leaders find their way back to the path—where patient care is the true north in our value compass, and everything else falls in line behind that principle. Patient care is Kaiser Permanente’s core business, or at least we thought so.”

Kaiser and its unions faced a similar roadblock during 2019’s contract negotiations but were ultimately able to avoid a strike.

RELATED: COVID-19 vaccines, safety policies offer strong rallying cries for labor campaigns

Meanwhile, the more than 5,000-strong Oregon Federation of Nurses and Health Professionals is planning a rally at a Kaiser location in support of “safe staffing, a fair union contract and a voice for both patients and care workers.” It is scheduled for Sept. 28.

On Sunday the system also addressed a work stoppage among The International Union of Operating Engineers – Local 39 Stationary Engineers that began on Saturday at some of its Northern California facilities.

That group is currently in contract bargaining with the system, having met an agreement on only three specific contract provisions. Kaiser said that it is “seeking no takeaways in our contract proposal” that would provide an average increase of $3,600 per employee per year, and similarly pointed to the increased costs of healthcare and difficulties maintaining affordable care for membership.