Inside Kaiser Permanente’s labor relations breakdown
Kaiser Permanente’s historic labor management partnership is on shaky ground this week as the window of opportunity narrows to negotiate a new contract for over 75,000 healthcare workers represented by the Coalition of Kaiser Permanente Unions and avert an October strike, according to union leaders and labor experts.
Over a dozen union leaders, labor relations professionals and former Kaiser consultants told Healthcare Dive that the bargaining process has become increasingly dysfunctional and protracted this summer, in contrast to most negotiations in the past.
The coalition has not carried out a strike in over 25 years. Labor experts attribute the period of stability to Kaiser’s unique national labor management partnership, formed in 1997, which brought the workforce into company decision-making processes from the ground up.
Until recently, the partnership negotiated effectively, driven by a shared vision for the company, said John August, former head of the union coalition when it was a broader group of 34 unions and current director of healthcare and partner programs at Cornell University’s Scheinman Institute on Conflict Resolution.
Management had shared financial information to inform bargaining, and union members — who were often covered by Kaiser plans — were invested in the health system’s mission of providing affordable, high quality care, said Adrienne Eaton, dean of the Rutgers School of Management and Labor Relations and co-author of the 2009 book Healing Together: The Kaiser Permanente Labor-Management Partnership.
“People felt like they had achieved a good, amicable relationship,” August said. “The performance agenda really meant a lot to everyone, and, as a result, Kaiser became a leader in the industry in terms of quality and affordability.”
The working relationship typically allowed for smooth bargaining and, in the past, contracts had often been negotiated “significantly before [their] expiration” dates, according to Hal Ruddick, executive director for the Alliance of Healthcare Unions, a venture of 53,000 Kaiser employees not affiliated with the current negotiating coalition.
However, this year negotiations are coming down to the wire.
Leaders for the Coalition of Kaiser Permanente Unions – the group currently negotiating its contract — and Kaiser executives have met eight times since talks kicked off in April to bargain about staffing, wages and benefits, according to both parties. They haven’t made a deal — and tensions have been escalating.
On Sept. 22, the Coalition released a statement that Kaiser was negotiating in “bad faith,” and issued a 10-day strike notice, alerting Kaiser that members in California, Oregon, Colorado, Virginia, Washington and Washington, D.C. would hold an unfair labor practice strike, and some sympathy strikes, beginning Oct. 4 if an agreement is not reached. The Coalition added that it is prepared to hold an additional, potentially longer strike, which could include workers from Washington state, in November.
Kaiser Permanente leadership has continued to express confidence that parties can still achieve a contract and urge employees to reject a strike as negotiations continue.
“Given the progress being made in national bargaining over the weekend and Monday, there is no reason to strike,” said Hilary Costa, communications manager for Kaiser, told Healthcare Dive on Wednesday. “The best place to reach an agreement is at the bargaining table. We will ask our employees to reject any call to walk away from their jobs.”
This is not the first time in recent years that the labor partnership and Kaiser have bargained into the eleventh hour. In 2021, the Alliance of Healthcare Unions and Kaiser narrowly averted a strike of 28,400 workers in southern California, after parties agreed to a contract days before a strike was set to begin.
At the time, labor experts and union members said the labor-management partnership was deteriorating. Now, Eaton characterized the state of the partnership as even worse: It is barely “limping along.”
The current contract stalemate, according to multiple experts, is the result of a communications breakdown between the two parties — and infighting among the unions themselves — that has been in the making since 2018.
"[Negotiations have] taken a kind of very militant stance," Eaton said, "Politics and personalities within the union [have] made it more difficult to reach an agreement."
A “culture shift” at work
The bedrock of Kaiser’s labor management partnership, according to Eaton and August, was commitment to collaboration that began at the top.
Following years of acrimony in the 1990s, including layoffs and strikes, then-CEO David Lawrence realized the standard tough-on-labor approach would be a “dead end” for the system that would lead to “continued labor strife in every corner of our organization,” he said at the time, according to a research report Eaton co-authored.
Lawrence hired consultants to teach employees and managers a new way to cooperatively interact. Employees and managers took courses on problem solving, conflict resolution, consensus decision making and unit-based teams — versions of which are still offered today. The emphasis on partnership created transparent bargaining that was “unprecedented,” Eaton said.
When Lawrence departed, new management continued the labor partnership, August said, because it proved beneficial to all. Both Kaiser and the unions were growing.
However, Kaiser union members said there has been a shift in Kaiser’s approach to labor relations in recent years.
“There used to be this real collaborative problem solving approach. My manager would approach me and say, ‘Hey, look, we've got this problem. How do we fix it? Here's my ideas.’ And they would ask for my ideas, too,” said Maria Jostes, a workplace safety consultant and union member who has worked at Kaiser for more than 30 years. In the last five or six years, she told Healthcare Dive that there’s been, “a culture shift from folks at the very top.”
Jostes attributed the change to the unexpected passing of former CEO Bernard Tyson in 2019. Eaton echoed Jostes’s comments, noting that Tyson had been “beloved” by much of the workforce.
Since Tyson’s passing, Alliance and Coalition representatives told Healthcare Dive that the company has made a series of decisions that made them question Kaiser executives’ investment in the labor management partnership.
One example included the narrowly-averted 2021 strike bargaining sessions, which Ruddick said began contentiously.
Another includes Kaiser’s announcement in April that it planned to acquire Geisinger, a non-unionized health system, to form a new nonprofit called Risant Health. The announcement raised “huge concerns” for union members, according to Caroline Lucas, executive director for the Coalition of Kaiser Permanente Workers.
“If Kaiser's future growth strategy is in a non-union non-partnership environment, it definitely calls to question their commitment to us,” Lucas said. Kaiser’s Costa said, “we disagree with the Coalition’s position on Risant Health.”
In current negotiations, coalition members allege management snubbed collective bargaining representatives by not sitting in person with bargaining teams, according to Jostes, Lucas, and Jeffrey Sanders, a contract specialist for SEIU Local-49.
In a statement to Healthcare Dive, Kaiser expressed commitment to the labor-management partnership, stating that it had hired more than 9,800 people this year into jobs at Kaiser represented by the Coalition.
Splits in the partnership
Eaton said that the unions are also not “without fault” for the current breakdown in the partnership. Prior to 2018, the Coalition and Alliance were a joint unit, representing 34 unions. They negotiated a single national contract.
However, the unions parted ways in 2018, in part because the Alliance unions had a “fundamental disagreement” with Coalition leaders about how negotiations ought to occur, Bloomberg Law reported at the time. Twenty-two unions left to form the Alliance and thirteen unions remained in the Coalition (those numbers have since shifted as union allegiances changed).
Since 2018, August said that, “bargaining… has been made more complicated” for Kaiser. Kaiser now negotiates separate contracts with the Coalition and the Alliance. August said the two groups have been tacitly competing to “show that they’re doing better” than the other, creating headaches for the healthcare conglomerate.
In labor relations, the term is “whipsawing,” Eaton said. Unions leverage a previous contract within their employer’s network to negotiate an equal or better deal.
“It puts extraordinary pressure on the next deal that comes,” Eaton said, because the employer likely understands that whatever they agree to in this round of negotiations will become baseline terms for the next negotiation cycle with their other unions. The split of the broader union coalition of prior eras has been difficult for Kaiser because of this, she said.
During negotiations since the Kaiser split, both the Coalition’s 2019 contract negotiations and the Alliance’s 2021 contract negotiations reached the point of strike authorizations, however, ultimately neither strike happened.
There are signs of continued infighting. One labor union in the current Kaiser negotiations has already voted to leave the Coalition and return to local bargaining. On Sept. 18, UFCW Local 555 members voted to leave the Coalition and issued their own strike notice to Kaiser.
Miles Eshaia, press contact for UFCW Local 555, told Healthcare Dive that members voted overwhelmingly to leave a process that wasn’t working for them, adding that their member issues were not “getting the attention they deserved” at the bargaining table.
“We've been working on this thing for months, and we didn't think we were gonna get a deal through the Coalition,” Eshaia said. “It was in our members best interest to return this to local-employer-to-employee bargaining.”