Bloomingdale’s and 2,000 workers at its 59th Street flagship in Manhattan on Monday reached an 11th hour agreement on a new contract that acknowledges employment and issues surrounding the intersection of retail and e-commerce. The contract for the first time takes into account the changing consumer shopping habits that have roiled the industry and added tasks to sales associates’ job descriptions such as handling order fulfillment for online purchases.
Leaders of Local 3 of the Retail, Wholesale and Department Store Union and Bloomingdale’s settled the contract 13 hours after its expiration on Monday afternoon.
“We appreciate our sales associates extraordinary dedication and service to our customers during negotiations,” Bloomingdale’s said. “We’re very happy we’ve secured a contract that recognizes the commitment and loyalty to our customers demonstrated by our sales force.”
According to the RWDSU, Bloomingdale’s workers have been struggling with diminished wages due to the impact of online sales for the last five years.
The RWDSU said under the new contract, the retailer can no longer require sales associates to handle order fulfillments or other tasks or require employees to leave their departments when a sales opportunity is present.
However, Bloomingdale’s in a statement said that while it wants associates to prioritize customers who are in the store or on the phone, when not engaged with customers, associates “are still expected to complete sales-related duties such as fulfillment, which is basic and helps support the in-store experience.”
The agreement will start to remedy a portion of the 20 to 30 percent earnings on average that workers claimed they lost in recent years.
Bloomingdale’s said it made the decision to reduce employees’ commission deficits by up to $2,500, as a good faith measure when associates don’t make their draw. “As a gesture of appreciation for being agile and flexible with floor moves and for managing through the disruption of the current renovation of 59th Street, Bloomingdale’s will recognize our employees with a flagship transformation bonus,” the retailer said, adding that it will create an additional incentive for achieving its customer service goal.
“Salespeople whose compensation may be based solely on commission were told they have to take themselves away from opportunities,” said Stuart Appelbaum, president of RWDSU-UFCW, referring to non-sales tasks. “Bloomingale’s said it will convert the pay system in several departments from draw versus commission to hourly wages.”
The retailer agreed to improved health-care coverage, with Bloomingdale’s assuming a greater share of the cost and more flexibility for days off, Applebaum said, adding that the new contract expires in four years.
“The flagship store is an iconic store for Bloomingdale’s,” Applebaum said. “When the company sells online or at its other stores, the value of the brand comes from the 59th Street store experience. Even if there’s a reconfiguration of the retail industry, the physical presence of the 59th Street store will remain important.”
Appelbaum said the new contract touches on issues the retail industry is grappling with. “Does the shift between in-store purchases and online sales mean that Bloomingdale’s flagship is becoming more of a showroom?” he asked. “Workers will be doing what they’ve always done. They’ll service a customer, who may end up purchasing the item online. The sale associate is still making the store profitable. We took a historic first step yesterday by acknowledging the impact online sales is having on commission-based associates’ income.”