Labor issue a pain for Washington Dental

Longshoremen helped found Washington Dental Service 50 years ago, and most of the insurers’ subscribers today belong to unions. So when 28 employees at its Colville call center in June voted out Local 8 of the Office and Professional Employees International Union, they gave the state’s largest dental plan a bit of a toothache.

Chief Executive Officer Jim Dwyer says Washington Dental does not want to antagonize union subscribers, but must control costs. Besides, he says, the decertification vote in Colville was not the company’s idea.

“This was an employee-driven initiative,” he says, adding that he told local members the company would be indifferent to the vote outcome or, as it turned out, outcomes. The union challenged the results of a close vote in May, then fell just two votes short of continuing as the employees’ representative in June balloting.

Local 8 Business Manager Suzanne Mode says Colville employees were pressured to vote out the union, which has also squared off with Washington Dental over a contract covering another 100 call center employees in Seattle. A federal mediator will hold meetings on the dispute later this month.

Washington Dental opened the Colville center two years ago to some fanfare. The company was bringing good-paying jobs to a community hard hit by declines in the timber industry. Pay — generally between $10.50 and $12 per hour — had been negotiated by Local 8, which agreed to a slightly lower scale for Colville Benefits were the same for workers at both centers. Union dues were about $30 per month.

After two years, the Colville employees were supposed to vote on whether they wanted to come under the Seattle contract. They voted for decertification instead although, Mode says, their future compensation depends on the outcome of the Seattle negotiations.

“We are responsible for everyone,” she says.

Dwyer says Washington Dental’s decision to expand in Colville was a response to official calls to put new jobs in rural areas, and a show of loyalty to the United States and Washington. Competitors are putting their call centers overseas, he says.

“Colville continues to be a very productive and very valuable location for us,” he adds.

The Colville vote and the standoff in Seattle has drawn the attention of the Washington State Labor Council, which encouraged members to complain to Dwyer about Washington Dental’s demands for more freedom to adjust its health care and pension plans.

At least one local representing Teamsters in Everett has threatened to take its business elsewhere if Washington Dental compromises the living standards of its workers. Mode does not want a labor boycott of the company, but says the union is determined to defend the present benefit plan.

“We’re prepared to take this campaign wherever it has to go,” she says.

Al Link, Labor Council secretary-treasurer, sits on the Washington Dental board of directors but recused himself from deliberations related to the dispute.

Unions are sensitive about their relationship with the company, he says, because they once helped create some medical plans in the state, only to let them go because they did not want to run insurance programs. Some regret those decisions, and do not want to see it repeated at Washington Dental.

“Their market was us,” Link says. “Things were always resolved without friction.”

Mode says Washington Dental is prepared to test union loyalty with the hope any loss of labor subscribers can be offset by new business. The company had a record of low administrative costs before Dwyer took over two years ago, she adds, and he is unnecessarily squeezing his employees.

Dwyer says company subsidiaries are exploring other opportunities, but the focus remains its dental plans, which cover about two million Washington residents. Other companies want a piece of that business, he says, and keeping costs low helps assure subscribers stick with Washington Dental.

Dwyer also defends the quality of the benefit package Washington Dental offers employees. The pension plan provides defined-contribution as well as defined-benefit aspects, a rarity in business. Employees contribute nothing to what he calls a “rich” health care package.

He says Washington Dental is trying to walk a fine line between managing costs and caring for its 300 employees. No matter what the mediator determines is a fair compensation package, it will remain among the best available, he says.

The company also supports a foundation that provides free dental care, and backs fluoridation efforts. An estimated three million Washington residents receive inadequate dental care.

Dwyer says Washington Dental and its employees are fortunate the company is dealing from a position of financial strength. After a loss in 2002, net income last year was more than $5 million. Every other measure of stability also improved.

With those results, whatever adjustments have to be made in benefits can be done gradually, Dwyer says.

With those results, the unions respond, worker givebacks are unnecessary.

With health care in Washington under extreme financial pressure, neither side should allow this toothache to become an abscess.