UFW and Egg City Still at War : A Year After Workers Walked Out, Strike Is No Closer to Settlement

An egg-shaped pinata covered with white tissue paper hangs from a curtain rod in the United Farm Workers office in Moorpark. Written across it are the words “Boycott Egg City� in large black letters.

“When we win the strike,� vowed Celia Madrigal, a 44-year-old mother of two, “we are going to break the pinata.�

Madrigal, a $6.17-an-hour egg inspector, was one of 240 workers who walked off the job June 24, 1986, in a labor dispute with Egg City, a 300-acre privately held Ventura County egg producer near Moorpark that is home to about 3 million hens. The Guinness Book of World Records has listed Egg City as the world’s largest chichen ranch. The 1986 edition said it produced 2.2 million eggs daily.

Workers at the ranch, founded in 1961, have been represented by the UFW since 1978, but their last contract expired in September, 1985.

The pinata, however, is in no danger of being broken soon. The strike is no closer to being settled than it was when workers walked off the job. Negotiations broke off last September, and picketing outside the ranch is sporadic. The first anniversary of the strike passed virtually unnoticed last Wednesday.

Cut Wages by $2 an Hour

The strike came after the ranch, citing severe financial problems, filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code in May, 1986. A month later it cut wages by $2 an hour. For some workers that meant a 30% pay cut.

Since then, as many as one-third of the striking workers, the UFW acknowledges, have found new jobs at other Ventura County farms. Other workers have taken higher-paying jobs in seasonal work such as construction. Meanwhile, the ranch has replaced striking workers in the lower wage scales.

Union officials acknowledge that the strike has been a bigger headache than expected, in part because Egg City was the first ranch the UFW had struck that was in bankruptcy proceedings.

Before the strike last year, for example, U.S. Bankruptcy Judge Calvin K. Ashland approved a request for the wage cut. And, for 10 days last fall, he ordered the UFW to stop its boycott against supermarkets and restaurants that sold eggs from the ranch.

“The bankruptcy court’s sole motive is to keep the company in business and it does anything it can to keep it that way. At the same time, the union is trying to bring the company to its knees. Those two mandates run contrary to each other,� said Wayne Smith, former deputy general counsel for the Agricultural Labor Relations Board, who has followed developments at Egg City.

UFW officials and workers said they are continuing to pressure egg distributors not to do business with Egg City. They maintain that workers still want their jobs back and that they were prepared for a long strike.

“I would do it again because I’m defending our rights,� Madrigal said.

Neither Egg City owner Richard Carrott nor his attorneys would discuss the strike. Carrott, a former actor who had bit parts in “The Love Boat� and “Three’s Company,� bought the egg business for an undisclosed amount in May, 1985, from Kroger Co., the Cincinnati supermarket chain. Last year Carrott said the ranch had annual revenue of about $40 million and was losing $500,000 a month when he bought it.

Earlier this month, UFW President Cesar Chavez filed a libel suit against Carrott. In the lawsuit, filed in Los Angeles Superior Court, Chavez alleges that Carrott, in an interview, called the union a “neo-Nazi terrorist organization� and Chavez a “maniac.�

Charges Coercion

Last January, in a farm trade magazine, Carrott was quoted as saying the strike had cost the ranch $3.1 million in sales. In court documents, the ranch has accused the union of trying to coerce Egg City customers into not buying eggs and attempting to intimidate truck drivers who haul the eggs.

To growers, the strike is another sign that the UFW and Chavez are losing clout. The UFW is suffering from declining membership, and the state’s ALRB, which governs farm labor matters, has tended to favor growers under Gov. George Deukmejian, instead of tilting toward the union as it did under the administration of former Gov. Edmund G. Brown Jr.

“The UFW is not effective at much of anything anymore,� said Marion Quesenbery, general counsel for the Western Growers Assn., an organization of vegetable growers in California and Arizona that is a bitter foe of the UFW.

The Egg City strike is being followed closely by the state’s agriculture industry, in part because the dispute is what UFW officials call their first “Reagan-era strike.�

Farm labor experts believe the strike could provide the first legal parameters on how far the union may go in using so-called secondary boycotts, which are among the UFW’s most effective strike tactics.

Secondary Boycotts

Unlike federal labor laws, California’s 12-year-old farm labor law allows workers, for example, to urge consumers to boycott supermarkets and restaurants that carry products from a company the union is striking against. Egg City and the ALRB want to limit ways the UFW may use a boycott.

For example, if the union is picketing a restaurant that uses products from a ranch where the UFW is striking, the agency wants the UFW to tell customers that it has no direct labor dispute with the restaurant. It also wants to limit the pressure the UFW has been putting on other union employees, such as dock workers, to avoid handling products from ranches where the UFW has a dispute.

Court papers show the ranch, which listed $24.1 million in liabilities and $21.5 million in assets when it filed for Chapter 11 on May 9, 1986, has been at odds with its creditors, most of whom are egg producers and distributors.

Trustee Requested

Last January a 14-member committee of unsecured creditors alleged mismanagement and incompetence by Carrott and asked Judge Ashland to name a trustee to run the ranch. In court papers, creditors said the ranch lost more than $400,000 a month after filing for Chapter 11 last year, while sales averaged about $2 million a month.

The committee also said Carrott’s salary was $130,000 a year and that his cash investment was only about $100,000. The committee said Carrott’s salary “is excessive in light of his lack of any prior experience in this industry and any prior experience in a business of this magnitude.�

Carrott, in response, asked the court to dismiss eight members because they are his competitors. Sources close to the creditors committee, however, said that the two sides have negotiated a truce. The sources said the ranch was profitable briefly this year and probably has lost about $2 million in the 13 months since it filed for Chapter 11.

When Egg City filed, it also owed Kroger Co. about $8 million, and Coast Fed, a Los Angeles commercial finance company, about the same. They are secured creditors.

Market Targeted

At first, the UFW sought to pressure the ranch by targeting one of its major customers, Lucky Stores, in a boycott. Like other UFW boycotts, the Lucky boycott targeted areas where support for Chavez and the UFW are strongest, such as heavily Latino districts like Boyle Heights in Los Angeles.

Soon after the boycott started, Egg City lost as customers the Ralphs supermarket chain and McDonald’s. Both companies denied the strike affected their decisions, although in court papers the ranch alleges that it did.

Now the union has shifted tactics and is picketing egg distributors in an attempt to get them to stop carrying Egg City’s products.

“It’s a lot more efficient to hit a half-dozen distributors than it is to hit a half-million consumers,� said Philip Martin, a professor of agricultural economics at the University of California, Davis.

Neither the union nor other experts are willing to predict how long the strike will last, or whether Egg City can successfully emerge from bankruptcy court protection. Some believe, however, that it is too late for the UFW to win the jobs back.

“If a strike is not effective within a short period of time, then it is usually not effective, period,� said Smith, the former ALRB executive. “A strike is about withholding labor from an employer. If you can’t effectively do that, then the strike is of little or no value.�