MONEY

Why the Jim Beam strike matters nationally

Bailey Loosemore
@bloosemore

Kentucky residents who are in need of work may be baffled by a complaint coming from hourly employees at two Jim Beam plants.

Troy Frazier, a processing operator who has been with Jim Beam for 25 years, holds a picket sign in front of the company's facility in Clermont on Tuesday morning.
October 18, 2016

The salaries at the facilities are great, the employees say, but they're working too many hours – and they'd like the company to cut them back.

The issue is unusual, says a local attorney, who noted that most employees want more hours, not less. And a resulting strike by more than 250 workers is rare, says a bourbon historian, who doesn't recall hearing of a similar event in the 25 years he's studied the industry.

Yet the conflict can exemplify two struggles currently taking place nationwide: one concerning a better work-life balance and the other concerning the growing pains of a bourbon boom.

"You can see that work-life balance is a very important issue in the workplace because, generally, people want to be with their children," said Jonathan Goldberg, a managing partner of the Goldberg Simpson law firm. "At the same time, when you're making this kind of money and willing to take a strike over it, it's really interesting."

On Saturday, employees of the Jim Beam facilities in Clermont and Boston, Kentucky, entered a strike following failed contract negotiations that they say didn't place enough emphasis on hiring more full-time employees to reduce current workers' hours.

ALSO: Here's what's at issue in the Jim Beam strike

Company officials and representatives of Union Food and Commercial Workers 111D planned to meet again Tuesday morning to restart negotiations, said union president Janelle Mudd, and the group hopes to agree on a new contract soon.

In the meantime, the strike has continued to gain national attention, with people expressing confusion about both the employees' demands and the company's procedures.

Under the latest contract, full-time employees at the two facilities earned an average of $23 per hour, Mudd said, with new employees hired on at $17.22 per hour and temporary workers offered about $11 per hour.

In comparison to the state's minimum wage of $7.25 per hour, those rates could cause anyone to question a need for a strike.

But Mudd said that while the employees realize they are paid well, they also feel that the company has neglected to hire the number of full-time workers needed to keep up with production demands.

"The reason they didn't do it was because the workload fluctuated so much," Mudd said, acknowledging that bourbon production is traditionally seasonal. "They always said they didn't want to hire (full-time employees) because when the workload drops off, then they would have to lay them off. But for the past two to three years, the workload has been consistently on the high side."

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A spokesperson for Beam Suntory – the distillery's parent company – could not comment on whether overtime was mandatory or optional, but the representative did say company officials were shocked by the employees' hour complaints.

For two recent contract proposals, the spokesperson said union leadership told negotiators that the employees would likely vote in favor of the offers, which included "a nice raise for everybody."

However, Mudd said union representatives only agreed to take the proposals to a vote because they thought they could not get any further.

The Beam spokesperson said the issue may lie in communication because while plant managers may have thought a proposal addressed the employees' main concerns, a different concern would arise during the voting process.

"There's a lot going on on our end that we're trying very hard to get this to a resolution," the spokesperson said.

From the union side, members are now asking that the company do away with a two-tiered system and reduce its use of temporary workers – who can only remain at the company for 10 months at a time, Mudd said.

A report from the Kentucky Center for Economic Policy shows that temporary agencies were the fastest growing industry in Kentucky between 2009 and 2016, with nearly 33,000 jobs added in the sector.

Center director Jason Bailey pointed to the statistic as proof that industries statewide have relied on temporary employees following the Great Recession, but he added that the practice is not entirely beneficial.

"The problem for the state is they have more families that are living on the edge that don't have the security of permanent employment," Bailey said. "They're not moving into better career opportunities. It impacts families and also the rest of us in terms of their ability to generate tax revenue and spend more in their local economies."

Bailey said that despite the state's low unemployment rate – marked at 4.9 percent in August – he does not believe there is a lack of qualified workers available. Thus, he questioned why Jim Beam would not fill more full-time positions instead of funding overtime.

"If they are being paid time and a half, that's actually pretty expensive for the company to do that instead of hire more people," Bailey said. "It's sort of puzzling to me."

Michael Veach, the bourbon historian, echoed Bailey's sentiments, saying the bourbon boom is here to stay, and distilleries will need more employees to keep up with demand.

At the Brown-Forman and Four Roses distilleries – where employees are also unionized – representatives said the companies hire workers as needed, though they could not say how many full-time members they've added recently to keep up with production.

"We've had no problem finding qualified workers, and it's not been an issue for us," said Elizabeth Conway, director of external communications for Brown-Forman. "... We do have overtime, which is inherent in these kinds of operations, but it's fairly balanced."

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Brent Elliott, the master distiller at Four Roses, said the company plans to hire more full-time employees once its distillery and bottling expansions are completed, though they do not know a number at this time.

"We'll add jobs certainly where needed," Elliott said. "The plan won't be to spread the current workforce thin. We don't create job duties or positions with a lot of overtime in mind. The goal is 40-hour work weeks for everyone. Certainly there are times where there's a need for overtime, but that's not the norm."

Union representative Mudd said she and other Jim Beam employees hope to get back to work as soon as possible – but they also want people to understand their frustrations.

On Sunday, a group of employees met with company leaders to better clarify their perspectives, and a Beam representative called it a "constructive session."

"We remain committed to doing what we can to promote a timely resolution that is in the interest of our union employees and our business," said spokeswoman Emily York.

Reach reporter Bailey Loosemore at 502-582-4646 or bloosemore@courier-journal.com.

STRIKE OVERVIEW

  • Union Food and Commercial Workers 111D represents 252 hourly employees working at two Jim Beam facilities in Clermont and Boston, Kentucky.
  • A majority of the employees have twice turned down contract proposals presented by the company and entered a strike Oct. 15 -- the day after the recent contract ended.
  • Union representatives say the strike is less about wages and more about a better work-life balance. They are asking company officials to hire more full-time employees so that current workers do not have to put in as much overtime.
  • The average wage for employees in the union is about $23 an hour. The starting salary for full-time employees under a current two-tiered system is $17.22 per hour, while temporary workers make about $11 per hour, union president Janelle Mudd said.
  • Employees say before the strike, some were working 12-hour shifts for six-seven days a week.