San Jose approves labor deal, avoiding worker strike

SAN JOSE, Calif. - The San Jose City Council on Tuesday approved the conceptual terms of an agreement to head off a strike by thousands of city workers.

After a months-long impasse and a week spent in daily mediations, the city and its two largest unions – IFPTE Local 21 and AFSCME Local 101 – on Monday agreed to suspend the strike until the San Jose City Council ratified the new contract Tuesday.

The council held a closed session meeting Tuesday where they voted on the new contract. The deal, which still must be ratified by the rank and file, and passed by the council, could see pay raises of as much as 15% over the next three years. 

Full details of the agreement have not yet been made public, but San Jose Mayor Matt Mahan has made some pointed objections to some of the fine print. "What San Jose needs is a profile of courage. And what they're seeing is politics as usual," said Mahan. 

Councilmembers will have to reopen the balanced budget to find dollars, but it's not clear how much will be needed to be cut to accommodate union demands.

"We got great workers. The unions did their job. The cost of living in San Jose is very high. I don't begrudge our workers at all for advocating for higher wages, but as I look at the numbers, to me this is a math problem that fundamentally has real world consequences," Mahan said at a news conference on Tuesday.

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A three-day strike authorization was approved after 99% of union workers voted last week because of stalled salary negotiations with the city. The following day on Aug. 8, councilmembers asked union leaders to come back to the table for continued mediation.

Leaders met, but city workers continued preparing for a strike -- assembling picket signs and organizing membership to picket in case they couldn't reach a compromise.

Mahan found himself at the helm of a years long problem -- and tried to find a compromise that would be fair to both residents and employees, he said on multiple occasions.

For nearly a decade, city workers have shared concerns that their raises have not matched the increasing costs of inflation and housing. It's led to high vacancy rates and frustration among workers that is now boiling over. City workers say they have been asked to do more work with less pay -- and some have found themselves homeless or driving from Tracy or Stockton because they cannot afford to live in the city they serve.

David Nerhood, a union rep and city employee for 22 years, said San Jose wages fall behind other local government jobs by as much as 8-15%, so employees leave to work in other cities. This new agreement helps make San Jose more competitive, though it's just the first step, he said.

"We need an agreement that ensures that when we bring people on, we offer the competitive pay and benefits that will keep them around for a long tenured career so that they can service San Jose residents the way they deserve to be serviced," Nerhood told San Jose Spotlight. "The results today are very promising that that's hopefully going to be the direction we head in."

After the agreement was reached, Nerhood beamed, "It's hot off the presses. We're all excited about that." 

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City officials, like Mahan, have said San Jose doesn't have enough money to pay what the union originally asked for. Before calling the strike, the unions asked for an 18% raise over the next three years, with the city offering 12%. 

The new agreement calls for a 6% raise in year one, 5% in the second year and in the third year, between 3.5% to 4%. There's also a provision for eight-weeks of paid family leave, up from just one week.

"I am very optimistic that our group will vote to ratify the contract agreement. I think it is a huge win for both our unions, said union negotiator Nick Rovetto. 

Mahan said this tentative agreement will return his city to the fiscal crisis of the last decade. He agrees with the family leave provision, but said the pay raise amount stretches his city to the limit. 

"While I support substantial raises for our workers, I will be paying close attention to the budget office's projected fiscal impact before voting on the proposal," Mahan told San Jose Spotlight. "Signing up for tens of millions of dollars in projected deficits and, therefore, likely future service cuts and layoffs wouldn't be fair to city workers or residents. I won't vote for something today that's going to hurt us tomorrow."

According to Mahan, San Jose has over $4 billion in unfunded pension liabilities, and billions in deferred city maintenance.

"We will be cutting millions, likely tens of millions of dollars in services from our budget in the years ahead. And I haven’t heard anyone who supports this deal identify whose taxes they’re willing to raise? And whose services they’re willing to cut? We have seen this movie before," Mahan said. 

If a deal was not reached, this would've been the largest city worker strike in recent San Jose history. The last strike was in 1981, when thousands of workers picketed for 10 days to protest unequal pay between men and women. That strike was also led by AFSCME Local 101 and San Jose was the first city to hold such a strike.

After the deal goes through union ratification next week, it comes back to the full council for a vote, likely in September. 

KTVU reporter Jesse Gary and staff contributed to this report.