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Important Information About Protecting Our Labor Management Partnership

The following message from Chuck Columbus, Senior Vice President and Chief Human Resources, was sent to all Kaiser Permanente employees today:

As you may know, the leadership of the United Healthcare Workers West (SEIU-UHW) has been in a dispute with the Coalition of Kaiser Permanente Unions and its member unions over control of the Coalition. That is an internal Coalition issue that does not involve the management of Kaiser Permanente. However, for months now, SEIU-UHW’s leadership has insisted in private meetings that Kaiser Permanente management negotiate with SEIU-UHW as the sole representative of the Coalition in upcoming National Bargaining. In these meetings, SEIU-UHW’s leadership has threatened that if we refused their demands, they would put an initiative on the California ballot that would adversely affect Kaiser Permanente.

Management interference in the Coalition’s organization would be wrong, and it would violate the spirit of the Partnership. Therefore, we said no to SEIU-UHW leadership’s demand. Then, on November 16, SEIU-UHW filed its threatened initiative for the November 2018 California ballot. If enacted, the initiative would directly undermine Kaiser Permanente’s structure and model of care, to the great harm of our organization and all of us – employees, physicians, and members.

In sponsoring this destructive initiative, SEIU-UHW leadership has violated both the spirit and the actual terms of the agreements that set up our valued Labor Management Partnership. Accordingly, we today have informed the leadership of SEIU-UHW that we are withdrawing certain privileges of Partnership from SEIU-UHW due to the union’s outrageous conduct. Among the privileges we have withdrawn is participation of SEIU-UHW in 2018 National Bargaining.

What the UHW Initiative Would Do

If enacted, the SEIU-UHW ballot initiative would prohibit Kaiser Permanente from raising rates unless its capital reserves are reduced to a fraction of what they are today. It is bad public policy to arbitrarily limit reserves that health plans maintain to assure that they can fulfill their coverage obligations to their members. However, the initiative is particularly harmful for Kaiser Permanente because, by treating us the same as health plans who provide only insurance coverage and pay claims to separate providers, it does not account for the fact that our integrated system does not just offer coverage, we also deliver the care to our members. In California that means we own hospitals and medical offices and technology. We also have huge investments to support our many thousands of employees and physicians, and many other things. All of this requires capital to maintain, and it all counts toward our capital reserves. Through this ballot initiative, SEIU-UHW effectively seeks to eliminate much of our capital reserves, even though they make up the financial structure that supports our entire system. If enacted, this initiative would harm our ability to meet our long and short term financial obligations, and ultimately, it would threaten our basic financial integrity.

Over the past few years, SEIU-UHW leadership has used the initiative process to force concessions from various employers. All these efforts have failed. If SEIU-UHW goes ahead with spending the millions of dollars it will take to get this initiative on the ballot, we are confident that once California voters understand the impact on Kaiser Permanente, they will join us and defeat this measure in November.

Kaiser Permanente’s Measured Response to SEIU-UHW’s Misconduct and Our Unwavering Commitment to the LMP

When a partner takes action that would harm our integrated model of care and is flatly contrary to our core principles of Partnership, we must act. Today, we are taking an appropriate and measured first step by withdrawing from SEIU-UHW certain privileges of partnership, including participating in National Bargaining in 2018. We also reserve our right to seek additional relief under our agreements.

Our intention is to narrowly focus our response on SEIU-UHW itself, and not other Coalition unions, our employees, physicians, or members. Withdrawing these privileges of Partnership from SEIU-UHW is not designed to affect employees represented by SEIU-UHW negatively. We will continue to abide by our collective bargaining agreements for all bargaining units represented by SEIU-UHW. And we call upon SEIU-UHW to honor our core principles of Partnership.

We are unwavering in our commitment to the Labor Management Partnership. We strongly believe that a healthy and strong labor management partnership will help us achieve our mission for the long term.


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