Kellogg's employees who have been on strike since early October have voted to ratify a tentative labor contract at the company's four U.S. cereal plants.
The contract covers approximately 1,400 workers represented by the union at plants in Michigan, Nebraska, Pennsylvania and Tennessee.
Kellogg said Tuesday that the new contract provides immediate, across the board wage increases and enhanced benefits for all. It also provides an accelerated, defined path to top-tier wages, a major sticking point for workers, and benefits for transitional employees.
“We are pleased that we have reached an agreement that brings our cereal employees back to work,” CEO Steve Cahillane said in a statement.
The workers have been on strike since Oct. 5. They will return to work on Monday, Kellogg said, after the holiday.
The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union said the contract is a win for workers.
“This agreement makes gains and does not include any concessions,” union President Anthony Shelton said in a prepared statement.
About 1,400 members of the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union voted on the new offer over the weekend. The offer includes cost-of-living adjustments and a $1.10 per hour raise for all employees.
Earlier this month, an overwhelming majority of workers voted down a five-year offer that would have provided 3% raises and cost of living adjustments in the later years of the deal to most but not all of the workers. That offer also would have preserved employees' current health benefits.
The workers have been on strike at plants in Battle Creek, Michigan; Omaha, Nebraska; Lancaster, Pennsylvania; and Memphis, Tennessee. They make all of the company’s well-known brands of cereal, including Apple Jacks and Frosted Flakes.
Kellogg’s said most workers at its cereal plants earned an average of $120,000 last year, though union members have said they work more than 80 hours a week to earn that, and those wages are only available to longtime workers. Under the two-tiered pay system the company uses, newer workers are paid less and receive fewer benefits.
That pay system has been a sticking point during the negotiations, and Kellogg’s offer didn’t change on that part of the contract. The company has said it will allow all workers with at least four years of experience to move up to the higher legacy pay level as part of this contract. Union officials previously said that plan wouldn’t let other workers move up quickly enough. The company has also proposed eliminating the current 30% cap on the number of workers at each plant who receive the lower wages.
The new agreement would also preserve employees' health care benefits.
The workers have been holding out for more partly because they believe the ongoing worker shortages across the country gave them leverage in the negotiations. And workers have said they deserve raises after keeping the plants running throughout the coronavirus pandemic.
Throughout the strike Kellogg’s has been trying to keep its plants operating with salaried employees and outside workers, and the company said late last month that it planned to start hiring permanent replacements for the striking workers.
President Joe Biden sharply criticized Kellogg’s for threatening to permanently replace workers, saying that doing that would undermine the collective bargaining process.
Shares of Kellogg Co., based in Battle Creek, Michigan, fell more than 2% Tuesday.