A&P tells over 5,000 workers they may face Thanksgiving layoffs
GEORGE MCNISH/SPECIAL TO THE RECORD
The A&P store on Mayhill Avenue in Saddle Brook.
Montvale-based A&P has notified its more than 5,000 New Jersey employees that they may face layoffs as the company seeks bankruptcy court approval to sell some stores and close others.
Most of the notifications, which are required by law, went out this week to 5,336 workers in 62 stores the chain hopes to sell, warning them that they may face layoffs on Thanksgiving Day. In July the company sent notices to more than 850 employees at the 10 stores A&P plans to close in New Jersey, including two Pathmarks in Clifton, saying layoffs would be effective Sept. 19.
The notices do not necessarily mean the layoffs will occur; often they don’t. John Niccollai, the head of United Food and Commercial Workers Local 464a, said he is hopeful they will not.
A&P says it has three potential buyers - Stop & Shop, Acme and Key Food - lined up for 118 of its 301 stores, including 13 in Bergen and Passaic counties. In each case, the union believes the buyer would have to retain the union and hire all the existing workers, Niccollai said.
“We could be talking 4,000 jobs right there,” he said, referring to union jobs in New Jersey. “We also know that there are other people expressing interested in other stores.”
Layoffs at the stores A&P wants to close would appear more certain, but the company and the union are arguing in bankruptcy court over whether laid off workers at a store being closed would have “bumping rights” over junior co-workers at stores remaining open.
The requirement that a buyer hire existing employees was put into the union contract in the resolution of a previous bankruptcy filing by the company, in return for large concessions by the union, Niccollai said.
The layoffs were outlined in submissions to the New Jersey Department of Labor and Workforce Development in line with the federal Warn Act, and a similar New Jersey law. They require employers to give workers 60 days notice, and alert authorities to the layoffs, in certain circumstances.
The company officially known as Great Atlantic & Pacific Tea Co. which operates A&P, Pathmark and Food Basics
stores in New Jersey, filed for bankruptcy July 19 after struggling in the face of competition from discount chains, including Walmart, and niche retailers like Whole Foods and Trader Joe's.
The requirement to hire existing employees was put into the union contract in the resolution of a previous bankruptcy filing by the company, in return for large concessions by the union, Niccollai said.
However, the company is fighting the union in bankruptcy court over whether it has to follow the seniority requirements in the contract, which would stipulate which employees get hired. The two are also facing off over how much severance the company has to pay.
Niccollai said he wasn’t surprised by the layoff notices, but some members are taking it badly, even though they knew they were coming.
“When it finally comes it has a very traumatic effect on people,” he said. “We are getting phone calls from people, and we are assuring them that we are doing everything we can do to get the stores sold.”
A spokesman for A&P said the company would not comment.
Meanwhile, a group of Rite Aid Corp. subsidiaries has submitted bids totaling more than $8 million to acquire pharmacy customers and inventories at 12 of the total 25 stores that will be closed.
A&P, which intends to liquidate, has asked bankruptcy court Judge Robert Drain in White Plains, N.Y. to speed the sale to limit the number of pharmaceutical customers switching to other pharmacies during the change in ownership. On Friday, A&P filed a request with the court, asking that an expedited hearing on the matter be held Monday.
The company said that under the sale agreement, which must be approved by the court, customer attrition could trigger a lower purchase price.
A&P has said that 23 of the stores that are closing have pharmacies, and it has received bids on 22 of them. Other bidders include Wakefern, the owner of the ShopRite supermarket chain, which has agreed to pay nearly $1 million for pharmacy assets at three stores.
The Rite Aid subsidiaries that participated in the $8 million bid are Eckerd Corp. Rite Aid of New Jersey Inc. Thrift Drug Inc. and Rite Aid of Pennsylvania Inc.
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