Kentucky company laying off Lethbridge workers

Around the middle of January, I started to hear news that Black Velvet was laying off several of their Lethbridge workers.

On the 19th, Lethbridge Herald published an article about the development. It was pretty light on details, especially regarding the worker perspective, so I reached out to Cameron Howey, a Lethbridge-based labour relations officer with Local 401 of the United Food and Commercial Workers, to get more information.

In August 2019, Constellation Brands, Inc published a media release announcing that they planned to sell the Black Velvet brand, including the Lethbridge facility, to Kentucky-based Heaven Hill Brands.

It was Heaven Hill that decided to shut down the bottling and distribution operations at the Lethbridge facility and relocate them to Kentucky. According to Howey, this was decision “not even made in Alberta or let alone Canada” .

The closure will result in 13 workers being permanently laid off, including equipment operators, bottling labourers, forklift operators, and maintenance workers.

The layoffs will be effective as of end of shift on 1 March.

Because these are permanent layoffs, they will trigger article 10.07 of the current collective agreement:

Employees placed on permanent layoff . . . will be eligible for 1.5 week’s severance pay for each full year of service . . . at the employee’s last basic pay rate.

Howey confirmed that the company will pay out any flex time or sick days that laid off workers have banked. After pressure from the union, the company has agreed to keep health benefits in place for 3 months for the laid-off workers, except disability coverage, as well as pay out more than 40% of the yearly accrual for any vacation time the laid off workers will have accumulated by 1 March.

Local 401, according to Howey, has met one-on-one with each of the workers who will be laid off, as well as meetings with all the members at Black Velvet. He said that “members are understandably and rightfully upset”.

One worker I talked to, who was pretty sure they’d be one of the affected workers, given their seniority level, told me that the entire situation “sure does suck! It’s a lot of stress for sure!”

Workers knew something was up. This worker told me anonymously that things around the distillery seemed off since late last year.

It’d been weird here for a couple months: not rehiring or filling spots that needed to be. Nobody was communicating to anyone. Then last Tuesday [9 Jan], they pulled us all in and had department meetings and told us all the news.

The worker finished by saying that it was “frustrating to say the least”, something that Local 401 president, Thomas Hesse, agrees with:

We are frustrated by the Company’s decision to close the bottling operations at its Black Velvet Plant in Lethbridge and move them to the US.

In a statement sent to The Alberta Worker, Hesse went on to say that he was worried about the effect this decision will have on local families and the Lethbridge economy.

Workers are facing an unprecedented global affordability crisis and struggling to make ends meet. Moving jobs to Kentucky is unnecessary. This will take money out of the local Lethbridge economy and hurt Lethbridge families when they are already facing significant challenges.

According to a 2019 media release Constellation said that they were selling the Black Velvet brand for about US$266 million (not including closing adjustments) for the Black Velvet Brand. Net sales for the brands included in the transaction were $67 million during the 2019 fiscal year.

At the time of the 2019 announcement, Max L. Shapira, the president of Heaven Hill Brands, had said that the company was “excited to add Black Velvet to our iconic group of brands and look forward to growing this historic brand in the months and years ahead”.

This doesn’t seem like growth.