After strike threat, tentative deal reached with San Jose public unions

San Jose has reached a tentative contract agreement with its public sector union workers, likely averting a strike and ending a monthslong standoff over demands for higher wages and workforce protections.

The tentative agreement struck Thursday breaks a negotiation deadlock between city leaders and two major public sector unions, IFPTE Local 21 and MEF-AFSCME Local 101, which together represent more than half of the city’s nearly 8,000-strong workforce.

Compared to the city’s prior June proposal to update workers’ three-year contract, the new offer includes a number of sweeteners for city employees, including a lump-sum cash payment and expanded protections against the displacement risks posed by artificial intelligence. Nevertheless, it still falls far short of the wage increases workers had demanded.

“We secured a contract that recognizes and respects our workers, and these are the people that keep the city running,” Carlos Murillo, an engineer at San Jose Mineta International Airport and an IFPTE union member who serves on the bargaining team, told San José Spotlight. “It’s not everything we wanted or everything working families in our community needed, but it’s a step in the right direction.”

The unions and the city still need to ratify the agreement for it to be finalized. The unions are expected to hold membership votes early next week.

Negotiations have been taking place since February to replace workers’ last three-year contract, which expired at the end of June after workers rejected what the city called its “last best and final offer.”

With contract talks largely stalled, thousands of union members voted in August to authorize a strike should negotiations remain frozen. Had workers followed through on their strike threat, it would have been the largest labor action to take place in San Jose since 1981, according to union officials.

The city’s June offer included wage increases that amount to 9% over the next three years.

But workers said such an increase — which falls short of the 15% increase provided by the contract that just expired — would not even keep pace with inflation in the South Bay. Furthermore, they contend that lagging wages have led city workers to depart in large numbers, degrading city services.

Under the new tentative agreement, San Jose is offering to grant workers a lump sum cash payment equivalent to 1% of their base annual wages — a payment officials said is intended to help offset rapidly rising cost of living expenses. In addition, the agreement also includes a promise of another 1% pay increase in the contract’s third year if the city’s budget hits certain benchmarks.

“These agreements avert a strike and the interruption of city services,” city administrators said in a statement issued Friday to announce the tentative agreement. “We are grateful to our dedicated workforce who lead with compassion, serve with pride and make a difference in our community every day.”

San Jose is facing tight budget constraints. The $5.5 billion budget the city passed in June balanced a $50 million deficit by tapping into reserve funds and making wide ranging service cuts. Meanwhile, the city is expected to face deficits topping $10 million for the next two fiscal years as well.

Earlier this week, South Bay union leaders ratcheted up the pressure on San Jose even more when the politically influential South Bay Labor Council authorized its 105 member unions to take strike actions in solidarity with any potential strike of San Jose workers.

The final agreement also includes measures intended to address worker fears related to San Jose’s rapid embrace of artificial intelligence tools. Among those safeguards, the agreement prohibits the city from using AI software as the sole factor in decisions related to hiring, firing, promotion and employee discipline.

San Jose workers are hoping to avoid a scenario in which the city uses new AI-powered technology to save money by automating tasks and cutting down on employee headcount.

“I think the guardrails that the city agreed to give us safety nets surrounding that fear,” Nick Rovetto, a city employee and president of the San Jose Chapter of AFSCME, told San José Spotlight. “It is going to inevitably be a continued conversation.”

Union leaders said the new agreement includes other wins for workers as well. Those include the possibility of expanded pension benefits, the introduction of fatigue pay for some workers and the extension of contract arbitration safeguards to more employees.

Despite the gains, Rovetto said a strike still can’t entirely be ruled out.

“Until the ratification concludes over the next week or so, I don’t want to say it isn’t a possibility,” he said. “With just how vocal everybody has been in the feeling of being underappreciated … I could see our membership having a point of pause before ratifying the vote.”

Contact Keith Menconi at [email protected] or @KeithMenconi on X.