Hecla’s Revised Final Offer Update December 15, 2017
Lucky Friday Mine – Hecla’s Revised Final Offer to the United Steel Workers – 12/15/17
Lucky Friday Mine – Hecla’s Revised Final Offer to the United Steel Workers (Redlined) – 12/15/17
Collective Bargaining March 9, 2018
There are a lot of questions about the arbitration vote that took place on March 7, 2018. What did the Union reject in declining to go to arbitration?

The Union membership rejected the USW’s proposal to submit the remaining unresolved disputed issues to binding arbitration.

Did Hecla or the Union make the proposal to go to arbitration?

On February 6, 2018, lawyers and leaders of the USW asked if Hecla was willing to submit the disputed topics to binding arbitration. After in-depth discussion, Hecla accepted the USW’s offer.  The two sides then drafted and signed a two-page Memorandum of Agreement (MOA) summarizing the terms.

What topics remain unresolved?

The remaining open items include Scheduling, Wages/Silver Premium Bonus, Holidays, and Job Advancement. The key topic is the Union’s desire to be the only mine in the United States where the senior employees dictate where and with whom they work.

We have heard claims that Hecla was able to dictate the terms of both contracts that would have been put in front of the arbitrator. Is that true? Can you explain what terms would have been put before the arbitrator?

During the discussion about the arbitration concept, the Union was represented by competent lawyers and international staff. Hecla did not dictate any terms. All terms were arrived at through negotiation.

At the time the parties were drafting the MOA, there were only six unresolved issues, as most articles of the CBA had been tentatively agreed to in the prior months. As a result, Hecla and the Union agreed to submit the open items to arbitration. The section of the MOA which defined the language to be submitted to the arbitrators stated.

“The interest arbitration panel will resolve all issues not the subject of signed tentative agreements between the parties as of March 9, 2018. Those tentative agreements shall be included in the resulting contract irrespective of the decision of the arbitration panel.”

If the language that was tentatively agreed to was to be included in both contracts, wouldn’t Hecla receive everything it wanted on those subjects?

No. Most of the revised final offer is made up of language for which the two sides have reached tentative agreement through the negotiation process. The language of other articles, where tentative agreement has not been reached, such as wages, scheduling and holidays, also consists of language that is not what Hecla wants, but is language Hecla has offered as a result of compromise through discussions with the Union committee at the negotiating table.

Has there been any further discussion between Hecla and the Union regarding the concept of both sides compromising on the Job Bidding issue by using a job advancement system at another USW-represented mine?

No. The idea of converting to a job advancement system in place at another USW mine was the idea of the federal mediator. Hecla agreed to the idea to compromise and settle the dispute.  Unfortunately, the Union immediately rejected the idea, and insisted on keeping the outdated and completely unique “Sugar Daddy” system.

The Union has stated the system proposed by Hecla gives management “unchecked control over who works and the schedule they work”. Under Hecla’s proposed system, is there any protection for the miners regarding their day-to-day work schedule?

Yes.  The Union’s claim is another misleading and incorrect statement. The Union is well aware that Hecla’s proposed language for Scheduling is not “unchecked”. For example, the language proposed by Hecla clearly states, “A workday is defined as eight (8) to twelve (12) hours”. In addition, the language requires management to schedule consecutive days off. Both of those terms provide assurance to the employees of scheduling limitations by management.

The Union has encouraged Hecla to return to the bargaining table to negotiate. Has Hecla refused to meet at the bargaining table?

The last time the two sides met at the bargaining table was October 30, 2017. At that time, the parties were indisputably deadlocked, which resulted in the cancellation of a subsequent meeting on October 31, 2017. The following month, the Union invited Hecla to a two-day meeting with a federal mediator; however, when the Union arrived at the meeting they had requested, they brought no new ideas or proposals. After the Union failed to accept the federal mediator’s idea to compromise by using a job advancement system at another USW-represented mine, the meeting ended with no progress. During December 2017, Hecla submitted a revised final offer, the terms of which included all of the agreements reached during the negotiation sessions between July and October 2017. To-date, the Union has failed to respond to Hecla’s December 2017 offer.  After almost three months, Hecla’s offer remains open. The ball is in the Union’s court.

Lucky Friday Operations
How much cash did the Lucky Friday produce for Hecla in 2016?

The Lucky Friday consumed over $20 million during 2016, primarily related to the funding of capital projects intended to increase efficiency, productivity and safety in the future at the Lucky Friday.

Has the Lucky Friday Mine repeatedly broken production records?

The Lucky Friday has not broken any production records in recent years. In 2000, the Lucky Friday produced 5 million ounces of silver. In 2016, the mine produced 3.6 million ounces. In 2010, the Lucky Friday produced a record 351,000 tons of ore, and in 2016 the mine produced 294,000 tons of ore.

Annual Shareholders Meeting
I understand several representatives from the USW attended Hecla’s Annual Meeting of Shareholders in Vancouver during May. How did it go?

It went very well. There were approximately 60 people in attendance, including five representatives from the USW. Phil Baker, Hecla’s President and CEO, gave a presentation on innovations that are in place at, or coming to, the four mines. The presentation included information on ore sorting, battery powered vehicles, and autonomous vehicles. All questions were presented to and answered by Ted Crumley, Chairman of the Board, and Phil Baker. The meeting was very upbeat and optimistic (a video recording of the meeting is available on Hecla’s website). Following the meeting, refreshments were provided and several displays on innovation were manned by subject matter experts, giving guests, including representatives of the USW, an opportunity to learn more about Hecla’s plans to make its mines safer and more efficient. Attendees were also provided an opportunity to ask technical questions of the subject matter experts. The meeting and the innovation session that followed were both informative and interesting.

Was Hecla’s annual meeting of shareholders moved to Vancouver to avoid the presence of the USW?

No. Hecla has a corporate office in Vancouver and the city has a robust mining presence. Hecla has held its shareholders’ meeting in Vancouver in the past and will most likely do so in the future.

In which cities has Hecla held its most recent annual meeting of shareholders?

2017 – Vancouver
2016 – Spokane
2015 – Montreal
2014 – Anchorage
2013 – Vancouver

Was Hecla’s annual shareholder meeting disrupted by the presence of the USW?

No. The few Union members who attended were welcomed and visited with others in attendance, including the Company’s management, both before and after the annual meeting. The Union members asked a few questions during the meeting which were answered without issue. The meeting was conducted in the ordinary course of business and there were no disruptions. The link to a video recording of the meeting is available on Hecla’s website.

Were the Hecla shareholders supportive of the Company’s proposals?

Yes. The shareholders overwhelmingly voted to, among other things, elect Phil Baker and George Johnson to another term on the board of directors, and approve executive compensation. Each such proposal was passed with over 96% of the vote.

Bid and Progression Systems
The Union has argued employees will be stuck in their current jobs unless they keep the existing bid system. Is that true?

No. In fact, employees will find it easier to change jobs under the progression system. Under the unique and outdated Lucky Friday bid system, employees have to rely on one of the “Sugar Daddies” to pick them for a mining position, or they have to wait for a vacancy in a mine department position. Under the proposed progression system, which is very common in today’s mining industry, employees can grow within their career paths, or if they do not like their chosen career path, they can enter another career path and grow within that system. Examples of career paths include Mine Support, Milling, and Maintenance. Employees are exposed to a wide variety of tasks under a progression system, and as the employees become proficient in the various new skills, their base wages increase. Flexibility in job knowledge and the opportunity to increase wages are reasons why progression systems have become standard within the industry.

I continue to read comments from the Union claiming many other mines have bid systems. Can you explain why the Union says bid systems exist and why the Company claims the Lucky Friday system is unique and outdated?

The Union has been unable to name any mines in the United States that have systems allowing miners to dictate to management where and with whom they will work. The Union cannot even cite to a USW-represented mine in this country where the employees tell management where they will work and with whom they will work. The archaic and inefficient system at the Lucky Friday is unique.

The most common system of advancement in the U.S. mining industry is a form of progression system. Some progression systems provide employees a voice in requesting where they work, which is often referred to as “bidding.” These systems provide employees an opportunity to express an interest in job assignments, but do not allow the employees to dictate where and with whom they work. The plan which the Company proposed to the Union provides employees the opportunity to sign a job posting sheet when jobs become available. This process is very similar to other progression systems used in the U.S., including mines currently represented by the Union. Much like every other job advancement system in the U.S. mining industry, the plan the Company proposed does not allow the employees to dictate where and with whom they will work.

While the Union has been quick to claim other U.S. mines have bid systems, the Company has yet to read (or hear from the Union at the negotiating table) any mention of a specific mine in the United States where the miners tell management where and with whom they will work.

So the collective bargaining agreements at other mines represented by the Union do not contain language allowing the miners to work were they want, and with the employees they choose?

The Union provided the Company with approximately 12 collective bargaining agreements covering USW-represented mines throughout the United States. The Union claimed each such mine had a bid system. Upon further review and discussion, the Union representatives agreed none of the 12 or so collective bargaining agreements contained language allowing the employees to tell management where they would work and with whom they would work.

Is the issue between the Union and the Company centered on the name of the program of advancement (such as bid system or progression system), or is it centered on the substance of the program?

The issue between the parties is about the substance of the program. Whether the program is call a “Bid” system or a “Progression” system is of little consequence. The issue preventing resolution of the matter is the substance behind the name of the system. The Company needs to operate under a modern day system, similar to its competitors, which allows management to assign skilled and properly trained employees where the work is needed. The system proposed by the Company will provide employees with the opportunity to grow in job knowledge, include varied experience and wage rates, it will provide the Company with efficiency, and it will provide the community with a longer-lived mine.

The Union promotes the Lucky Friday bid system as a safety measure. What happens when one of the miners on the bid is sick, on vacation, or misses work for the day?

When a bid miner does not show up for work, management assigns another qualified miner to the work area. This has been the standard practice for many years. The Sugar Daddy who controls the bid does not select the replacement. A miner’s training, experience, and overall work history all contribute to the supervisor’s decision.

What is a Sugar Daddy?

The term Sugar Daddy is a common slang term used at the Lucky Friday to describe the small number of senior miners who have the ability to dictate who can work in the mining areas. These Sugar Daddies have a tremendous amount of power in that they determine whether a miner can earn miner bonus, or whether that same miner only earns base compensation. Because these Sugar Daddies dictate who can earn the upper end of the pay scale ($100,000+ per year) or the low end of the pay scale ($60,000+ per year), they achieve a very high status among the workforce.

Are there any other instances when a miner is assigned to work in a mining area when he is not “chosen” by the Sugar Daddy in that work area?

Instances include vacations and temporary absences for any reason (bereavement, illness/injury, jury duty, among other reasons). Overtime shifts are frequently staffed by non-bid miners who sign up for overtime. Often, a miner who normally works in Area A will sign up for overtime in Area B. Because mine training involves much more than being selected by a Sugar Daddy to work in a certain area, the miners can safely work in various areas of the mine.

Is it common for mines to have a system of promotion based on a Sugar Daddy system?

No, we are not aware of any other mines where a miner’s individual career growth is dependent upon gaining the approval of a Sugar Daddy in order to be selected to grow from a mine laborer to a miner.

The Union has argued that miners need to be familiar with their workplaces, and allowing management to assign work where needed will be a safety issue because miners will not be familiar with their environments. Do Sugar Daddies stay in the same work areas year after year with the same crews?

No. The Sugar Daddies bid off one work area and on to another. Sugar Daddies often select new miners for their crews. There have been many instances over the years when a Sugar Daddy dropped one of the miners he had previously selected in favor of someone else. The system has resulted in bad feelings between the employees on the mining crews, jealousy over which miner was dropped and which miner was included, and general frustration by miners who feel they are subject to the discretion of the Sugar Daddy in order to have the opportunity to become a full-duty miner and obtain the miner bonus payment.

Do the maintenance and milling departments have a bid system?

No. All of the maintenance department and mill department employees work through a progression system. There is no Sugar Daddy system in the maintenance or milling departments. Rather, employees are able to train and progress in the pay scale based on their own initiative. They do not rely on a Sugar Daddy to choose them before they are allowed to train and progress. While these employees are not subject to a Sugar Daddy system, seniority still plays a role. When two or more employees with the same qualifications wish to advance through the training system, the senior employee is selected first.

Do the Lucky Friday miners have a history of choosing their partners based on safety performance?

No. The current Lucky Friday bid system allows the most senior qualified miner (a/k/a, the Sugar Daddy) to select his partners. The Sugar Daddy often chooses his partners on a family-and-friends basis – or “who you know”, rather than on merit or an individual’s safety record.

Under the Lucky Friday bid system, are mine department employees able to develop new skills and advance as their ambition and skills allow?

Under the current bid system at the Lucky Friday Mine, mine department employees are very isolated, and get stuck, within the current bid system. The system places them into a job and that is all they perform. If an employee wishes to improve and expand his or her skills, or perform another task, that employee needs to wait for a bid to be posted and then hope to be awarded the new position. The current system does not allow an employee to cycle through different work areas and gain new skills and additional compensation. The system tends to pigeonhole employees into the individual jobs they are awarded. The system limits the operation in that employees cannot be moved to work areas where new skills could be learned and put to use by the mine, and it limits the employees by restricting the skills and additional compensation they could otherwise acquire.

Does the Lucky Friday have trouble attracting new talent as a result of the bid system?

Yes. Multiple qualified miners over the years have declined the opportunity to work at the Lucky Friday Mine because of the bid system. These miners have cited their reasons for declining the job offer as a system of “who you know”, rather than a system of “what you know”. Other miners have accepted employment offers, hoping to navigate the political nature of the bid system, but end up quitting because of the bid system.

Are mine operations safer with the current bid system?

Hecla management has no evidence of mining operations being safer due to the current bid system. Hecla management is unaware of any world-class safety systems that promote job bidding as a means to achieving a strong safety performance and a zero-harm safety system. The Lucky Friday has faced grievances in the past for seeking to remove unsafe employees from their job bids or for denying bids to employees when management determined that the employees were unable to complete the job safely. In certain of those cases, employees have come to management and expressed a safety concern regarding a fellow employee in a safety-sensitive position. During the course of the grievance and/or arbitration procedures, the Union cited the bid system as the reason the fellow employee should be allowed to continue working in the safety-sensitive position, notwithstanding the concerns expressed by the other employees or management.

Are Lucky Friday style bid systems common in the mining industry?

Bid systems, like the one in place at the Lucky Friday Mine, are practically extinct. Every mine in the United States where members of the Hecla staff have previously worked, including three mines represented by the United Steelworkers, have progression policies in place.

The Company asked the Union to cite to other mines that have bid systems like the Lucky Friday Mine. To date, after well over a year of negotiations, the Union has still failed to name any other mines with a Lucky Friday style bid system. The mining industry has moved to a progression system that rewards miners financially for the skills they acquire. Due to the archaic bid system at the Lucky Friday Mine, its employees are unable to progress based on their ambition and ability to acquire new skills.

Doesn’t the bid system make the mine safer?

The safety of our employees is our top priority and we expect all our employees to demonstrate safe work habits each and every day. Four years ago we adopted the National Mining Association’s CORESafety program, which is a risk-based management system approach which has resulted in the Lucky Friday’s safety performance substantially improving. Implementing these types of systematic tools in combination with a culture of continuous safety improvement is what makes mines safer.

Has the Union submitted any statistical evidence to support their claim that the Lucky Friday bid system provides a safer work environment?

No statistical proof has been provided because none exists. The Lucky Friday bid system is not a form of safety system, and is not the safest system of advancement. The Mine, Safety and Health Administration (MSHA) and the National Mining Association (NMA) have named Sentinels of Safety award winners, the pinnacle of mine safety recognition, for many years. During the last 10 years, not one award recipient used the Lucky Friday bid system.

Will elimination of the bid system result in decreased production?

Elimination of the archaic bid system will not reduce production. The high-quality miners at the Lucky Friday will continue to work together to increase production levels. These same miners will utilize the current investments into the #4 Shaft, the Centralized Refrigeration Plant, and the Bulk Air Coolers, along with future investments such as Battery Powered and Remotely Operated Equipment to increase production, improve safety, and reduce costs. The combination of the Progression System with Lucky Friday’s skilled miners, improved infrastructure, and new technology will support the Lucky Friday to be feasible for decades.

Can you explain how the job progression system works?

Under the job progression system offered by the Company, an employee will have the capability to choose a career path (e.g. mechanic, electrician, miner, support, mill, construction, etc.). Within that career path, as employees increase their skill levels, they will earn a higher wage by progressing to a higher Technician (Tech) level. Each career path has defined tasks and skills necessary to learn to progress to each technician level. The system is designed to broaden expertise in employees and crews and reward the increase in skill level with a higher base wage.

The mill is currently working in a progression system, and the mechanics and electricians, for the most part, follow a progression type of system. Employees on support crews (trucks, loaders, nippers, cagers, graders) will develop skills in many areas but most will find a niche and spend most of their time performing that task. However, if necessary, their acquired skills will allow them to perform other tasks to improve efficiency of their crew. Miners would be placed in locations to work and would remain in that area unless there was a business need to change, such as the work in that area is reduced or stopped altogether or another area of higher priority is identified. Having consistency with employees and work areas can improve quality and conditions and can be a valuable benefit. However, there must be the ability to place employees where necessary when the need arises.

Can management demote employees’ paygrades at will?

No. Tech levels cannot be downgraded at will. There is a policy outlining a regression procedure that would be followed if an employee is not performing to expectations for their Tech level. The first step is to perform an evaluation. After the evaluation is performed, the following section of the Progression Policy would be applicable:

“If the employee has any ratings below “Meets Expectation”, the supervisor will formulate a plan for improvement with the employee, and the employee will be provided an opportunity to demonstrate sustained improvement. If the employee was not able to correct the performance deficiencies within the timeframe formulated by the action plan, the case will be evaluated with the employee’s supervisor, the Department Foreman, and the Human Resources Manager. The group will discuss the possibility for regression. If the group’s consensus is to regress the individual, the recommendation for regression will be signed and sent to the Department Superintendent for final approval or further discussion. Upon final review of the Department Superintendent, the employee may be regressed to the appropriate technician level with the associated reduction in pay.”

Do all of the hourly employees at the Lucky Friday Mine work under the bid system?

No. Many of the employees at the Lucky Friday mine do not work under the bid system. For example, the mill department works under a progression system, and the maintenance department works under a modified progression system.

Is changing the bid system all about the continuous mining machine?

No. The continuous mining machine is a way of increasing the safety of the mine and making it more productive. Changing from the bid system is an evolution that has happened in the mining industry over the years. The progression system allows the mine to have the right skills in the right place at the right time.

Compensation
Does the average annual employee pay of over $84,000 per year include the value of Hecla provided benefits?

No. The average pay of over $84,000 per year only includes W-2 eligible earnings (such as wages, 11 paid holidays, up to 5 ½ weeks of paid vacation, and bonus pay). The value of the non W-2 eligible benefits are in addition to the $84,000 average annual pay.

Were all hourly employees provided full benefits?

All full-time employees were provided benefits including Company-funded retirement, 401(k) with Company match; life insurance; medical, dental, and vision insurance (which covers both the employee and his or her dependents); and short-term disability benefits. These benefits are in addition to the W-2 eligible benefits such as vacation, holidays and bonus.

Under the Company’s proposal, will the miner contract pay (“gypo” pay) be eliminated?

The Company proposal does not include any language to change the existing “gypo” pay system.

Will the profit share plan remain in place under the Company’s proposal?

Yes, the method for calculating the financial pool for the profit sharing will be the same under both the 2010 Agreement and Company’s 2017 proposal.

Will employees see a decrease in base wages under the Company's proposal?

Over 95% of employees will see an increase in base wages under the Company’s proposal. The increases range from $0.17 per hour to $6.17 per hour based on position and level of experience, with an average increase of approximately $3.00 per hour.

Why was the pay structure changed?

The pay structure was adjusted to be more competitive with the market, and to provide more bandwidth between entry level and experienced employees. Under the 2010 labor agreement, an employee with 19 years’ experience was only making $0.38 per hour more than an employee with 4 months’ experience. The Company does not believe that style of compensation structure recognizes the difference in skill level and experience that the proposed Tech Level pay structure offers.

Health Care Benefits
What are the changes to the health insurance plans?

The Company has offered three health care plans – group medical, dental, and vision plans. Within the medical plan, employees can choose from three plan options, which cover themselves as well as their family members. The Bronze Plan, in conjunction with a Health Savings Account, requires no premium, the Silver Plan requires a 5% premium cost sharing, and the Gold Plan requires a 15% premium cost sharing. The health care plans are very competitive across the industry for both low premiums and quality of coverage. The offered medical plan provides certain benefits unavailable under the current hourly medical plan, such as child wellness visits. The Company’s offer provides the hourly employees with coverage under the very same plans that the salaried employees enjoy, and at the same low premium percentages.

The Company has proposed medical plan premiums, which is a change from the current practice, but the premiums are very reasonable, and in many cases low when compared to similar employer-provided plans. The dental and vision premiums contained in the Company’s offer are significantly lower than what the hourly employees are currently paying under the “enhanced” hourly dental and vision plans (a majority of the hourly employees are enrolled in the “enhanced” plans).

Linked below are three PDFs with the offered plan information.
Download medical plan information
Download dental plan information
Download vision plan information

Linked below is a PDF that illustrates the reduction in monthly premium cost sharing by moving from the current enhanced dental and vision plans to the offered plans.
Download information

Linked below is a PDF that illustrates the difference in monthly premium by adding the medical plan cost sharing, and reducing the dental and vision premium cost sharing.
Download information

On March 14, 2017, the Company and the Union signed off on language related to the health care plans. The health care plans are no longer in dispute.

Vacation Plan
What are the changes to the vacation plan?

The Company’s offer includes a full year’s allotment of vacation each January; grants vacation based on years of service, not hours worked in a pay period; and continues to allow employees to bank vacation. Under the 2010 CBA, hourly employees accrued vacation based on eligible hours worked each pay period. Under the new plan, vacation will be granted in one allotment each January after the end of the year in which it is accrued. There is a transition year in 2018, during which time the Company will advance part of the 2018 accrual. From January 2019 forward, employees will be granted full-year vacation allotments in January of each year.

Will the miners stop accruing vacation hours during 2017?

No. Throughout 2017, miners can continue accruing vacation under the same formula that existed under the 2010 contract. This form of vacation accrual would continue until the end of this year. Beginning on January 1, 2018, miners will no longer accrue vacation based on regular hours worked in a pay period. Instead, miners will be granted a full allotment of vacation hours on January 1 of the following year. For example, an employee with 2 years of service will be granted 80 hours of vacation on January 1, 2019. During the transition year of 2018, the Company will advance every employee with one or more years of service, 40 hours of vacation on July 1, 2018.

Is the proposed vacation plan a reduction in the bargaining unit’s vacation benefit?

No. The Company expects to pay more in vacation benefits for two reasons.
1. An employee will no longer have his or her vacation accrual reduced for missing a shift. Under the 2010 vacation system, employees did not earn vacation time when they missed a shift. The Company’s proposal eliminates that deduction, and grants full-time employees with at least one year of service, a full vacation allotment each year.
2. All vacation time an employee has banked will immediately be valued at the higher rate of pay the Company is offering in its wage rate section. Under the 2010 contract terms, vacation was paid at the hourly at which the vacation time was accrued.

Other Benefits
Why does the company want to make holidays scheduled days of work?

To make the Lucky Friday productive we need it operational on every possible day. There are very few mines that don’t work every available day. However, most mines, and Lucky Friday will be no different, will, as the situation allows, consider modifying the schedule for certain holidays.

CBA Process
The Union claims Hecla submitted an “incomplete” offer in December 2017. What was the offer missing?

The offer Hecla submitted in December 2017 was complete. It contained language addressing each Article within the CBA.

What does the Union claim was missing from the revised offer?

The Union has not advised Hecla that its December 2017 revised offer is incomplete.

Did the Union ask Hecla to provide the missing information to address what they claim is incomplete?

No. The Union has not advised Hecla it considers the revised offer incomplete.

How has the Union responded to Hecla’s revised offer from December 2017?

As of January 25, 2018, there has been no response from the Union. We had hoped they would provide the members an opportunity to vote by now, however, they have not done so.

The Union claims they want a fair contract. Does Hecla disagree with that concept?

Hecla agrees with the concept of a fair contract and considers the offer submitted by the Company in December 2017 to be fair to both the employees and the Company. Hecla wants terms and conditions of employment that are common within the industry.  Hecla and the Union have agreed on most of the terms and conditions, with only six issues in dispute remaining. The strike is primarily about a unique bidding system that no other mine in the United States works under, and is only advantageous to a controlling minority.

Has there been any further communication between the Union and Hecla to try to reach agreement of the concept suggested by the federal mediator – the concept of agreeing to the job advancement system used at the Galena or Stillwater mines?

No. Once Hecla submitted its December 2017 revised offer, the Union discontinued communications regarding the CBA process. For the first 21 months of negotiations, when one party submitted an offer, the other party responded. Following Hecla’s December 2017 offer, the Union has declined to respond.

When will the Union membership vote on Hecla’s revised offer from December 2017?

As of January 2018, we have not seen any indication the Union leadership will allow its members to vote on our December 2017 offer. Thus far, the Union’s actions indicate it will not hold a vote, and instead will deny its membership the respect of giving them a voice in the ongoing strike.

The Union has made numerous statements that it allows secret ballot votes. Is the Union required to hold a vote at some point?

The Union leadership determines whether the membership is allowed an opportunity to vote. Hecla is not involved in the voting process. The Union has routinely claimed its prior votes resulted in unanimous or nearly unanimous decisions.  Disappointingly, following Hecla’s modifications in the December 2017 revised offer, the Union has not been willing to allow its members to vote.

The Union can maintain the strike following Hecla’s revised December 2017 offer by multiple methods, including the following:

1. The unionized employees, voting their conscience, can vote “No” on the proposed offer by Hecla.
2. The Union can refuse to allow its members the opportunity to vote as a way to prevent the unionized employees from voting “Yes”.

The Union states that Hecla should negotiate in good faith in order to end the strike. Would good faith negotiations by Hecla end the strike?

Hecla has negotiated in good faith for almost two years. Unfortunately, the Union has routinely failed to provide timely proposals, timely responses, or, in some cases, failed to respond at all. Additionally, the Union has failed to allow its members an opportunity to vote after Hecla provided a full proposal. Instead of the Union distracting its members with good faith bargaining rhetoric, it could demonstrate it is acting in good faith by giving the membership the opportunity to vote on Hecla’s December 2017 offer.

Hecla and the Union have met more than 20 times subsequent to the strike, and the time at the negotiating table has resulted in a significantly different offer. However, regardless of the productive effort made at the negotiating table, the Union refuses to allow its members an opportunity to vote on the proposal.

Have any future meetings been planned?

No future meetings are planned. The Union notified the Company in October 2017 that it was preparing counterproposals on subjects such as Holidays and Scheduling, but it failed to provide any counterproposals. After the Union invited Hecla to attend a two-day mediation session in November 2017, the Company thought the Union would submit responses to all of the proposed language changes the Company provided the Union in October. We attended the mediation session only to learn the Union had no responses to our proposed language and had no new ideas to share.

Ultimately, the Union made minor and mostly insignificant revisions to one of its prior proposals on Bidding, but we never received responses on the topics of Holidays and Scheduling. When the mediation session ended, no new meetings were scheduled.

Why didn’t Hecla and the Union schedule another meeting at that time?

At the end of the two-day mediation in November 2017, there was no point in scheduling another meeting. The Union failed to provide responses to the proposals made by Hecla over one month earlier, and gave no indication it would be providing responses. In addition, the Union rejected the mediator’s suggestion to convert the USW-approved Bidding language in effect at the Galena or Stillwater mines. The Union’s refusal to compromise and its insistence on maintaining a job advancement system that favors the Sugar Daddy over the other miners left the process deflated.

What is Hecla doing now?

The salaried staff at the Lucky Friday mine continue to focus on mine development for the Remote Vein Mining machine (RVM). The salaried employees are performing the same development work the Union miners would have performed absent the strike. The RVM is viewed by Hecla as the next generation of mining technology, and is expected to increase the safety of the miners while also increasing production.

Lucky Friday management also expects to engage in limited ore mining. Limited ore mining took place in the 4th quarter of 2017, and the mine has been shipping concentrates to the smelter throughout January of this year.

I read that the Union claims the RVM is unproven. Why is Hecla focused on new technology if it is unproven?

The RVM is a modification of proven tunnel boring machine technology. Similar “mobile miners” have been tested and operated in tunnels and mines for over 20 years. A unit similar to the RVM has been in operation in both Sweden and South Africa for nearly two years.

Hecla has performed extensive cutter testing on Lucky Friday ore blocks at the Colorado School of Mines, which reflected the Lucky Friday rock to be easily cut by the machine. We expect the RVM will be successful and the mine will evolve into a safer, more efficient and sustainable operation.

Is it really necessary for the Lucky Friday Mine to modernize? Instead of converting to modern systems, can Hecla just continue using the old technology and systems the Union prefers?

Mining, like other industries, has progressed and evolved over time. During the late 1800s, miners used hand steel and donkeys to mine. As technology evolved, mine operators learned that using compressed air, jackleg drills and electricity were safer and more efficient methods of mining. As time advanced, mine operators began using rail cars and more advanced ventilation systems. These technologies allowed miners to advance deeper into the earth and provide jobs for longer periods of time. During the 1980s, the Lucky Friday Mine converted its production equipment from a rail system to rubber-tired diesel trucks and loaders. In addition, a new concrete-lined shaft was sunk. Today, over 30 years later, the RVM technology is viewed as the next evolution in advanced mining technology. In order to continue mining over long periods of time, mine operators must routinely consider new and advanced methods.

The Lucky Friday Mine would not be operational today if it relied on proven yet outdated technology, such as men with wheelbarrows hauling rock, or donkeys hoisting employees and supplies from underground through the use of a spin-wheel and rope. The Lucky Friday Mine must evolve with technologies in order to operate long term. Hecla has evolved with technology over its first 75 years of operation and must continue to do so.

Can Hecla delay its focus on evolution to modern technologies? Why do the changes need to be made now when the Union wants to keep the old systems in place?

Mines that do not embrace technology will be left behind. The profit margins at the Lucky Friday Mine are very small. The longer we wait to implement current technologies, the more difficult it will be to achieve sustained profitability at the mine. The Union is looking in the rearview mirror to decide which lane to drive in by clinging to an old system of bidding, which benefits only a few of the miners and is completely unique to the mining industry.

According to the Union, Hecla was provided a proposal by the Union that would have given Hecla control of who made up the mining teams once the senior miner was awarded a bid. Is this true?

No. The Union’s proposal to Hecla did not give Hecla “control of who made up the teams once the senior miner was awarded a bid”. The exact language from the Union’s proposal is as follows:

“The senior successful qualified bidder will, within three (3) days of the bids award determine who will be on that crew (in accordance with the following language). If the bid holder takes more than three (3) days to determine the rest of his crew the Company shall have the right to select the next person on the interest list, unless, the delay is caused by the Company.”

The Union’s proposed language is clear. The senior qualified miner has the right to “determine who will be on that crew”. The Union may try to mislead the public when summarizing their proposal, but the plain language of their proposal is indisputable.

The Union claims the miners do not dictate where and with whom they work. Can you give an example of a senior employee dictating where he or she works?

Senior employees have been able to dictate where and with whom they work. An example would be when a stope mining position becomes available, Hecla must post a bid, and if the senior qualified miner wants the position, he takes it. The senior miner also decides who else will work with him in that stope, and therefore the senior miner is referred to as the “Sugar Daddy”. Unlike at the USW-represented Galena or Stillwater mines, Hecla management cannot assign work to whom it determines to be the best fit for the position. As long as the Sugar Daddy chooses employees who meet the minimum requirements for the position, management must accept the work team selected by the Sugar Daddy.

The Union states they “gave them (Hecla) control of 7 out of the 8 men on a team.” Is this true?

No. Just as in the previous contract, the senior qualified miner awarded the bid determines who will be on the crew. The only way the Company could select the crew is if the senior qualified miner (the Sugar Daddy) chose not to select the crew, and since the Sugar Daddy always chooses to select his own crew, the Union’s proposal would likely never result in management assigning a crew.

The Union states their proposal provides that the senior miner and the Company would have worked together to pick a crew. Wouldn’t that have given Hecla the opportunity to choose some of the miners?

The Union proposal included language stating the successful bidder will work with the Company to determine who will be on the crew. That language is very vague and undefined. The additional language in the Union’s proposal is clear and unambiguous, and ultimately provides the senior miner with the right to determine who will be on the crew.

Have the Union and Hecla discussed working together to select the crew?

The concept of working together has been discussed at the negotiating table. An open discussion on work crews is very important to Hecla. We believe it is in the best interest of all involved to have open communications about where people work. Hecla manages the mill and maintenance departments, and the salaried workforce under this concept. Employees from the mill and maintenance departments, as well as the salaried staff, are assigned work based on their knowledge, skills, ability, safety performance, etc. The process works well.

Unfortunately, the Union is insistent upon allowing senior employees in the mine department to determine their job selection, as well as the job selections for the mining crew working with them. While the concept of the Union and Hecla working together is logical, one side or the other must have the ultimate ability to make a decision in the event the two sides cannot agree upon a job selection. Both the Union and Hecla recognize this issue, and the Union’s proposal gives the senior miner the ultimate ability to determine who will be on the crew.

The Union says the miners do not get to pick where they work very often – at times up to two years. How does that work?

Mining bids can be short in duration, such as five or six weeks, or they can last over one year. Whether mining bids are short-term or long-term, it is the senior qualified miner who has the choice of working in the area. In the case where a mining bid lasts over one year, the senior qualified miner (the Sugar Daddy), can dictate who will be allowed on the stope bid for the entire period. Thus, the Sugar Daddy retains enormous power over the other miners within the mine.

Has the Union shown any interest in compromising by accepting the same USW-approved work assignment system in place at either the neighboring Galena or Stillwater mines?

No. Although the Union has tried to characterize their last bidding proposal as a compromise, the core work assignment terms they proposed are essentially the same as the system that was in place in the expired contract. The only true attempt to compromise during the November mediation session was when Hecla agreed to the federal mediator’s suggestion to meet in the middle and accept the USW-approved job assignment system in place at either the Galena or Stillwater mines. Unfortunately, the Union hastily rejected Hecla’s verbal proposal to compromise and accept one of the USW-approved job assignment systems in place at the Galena or Stillwater mines.

The Union argues that giving management control of where employees work is a union busting effort. Is Hecla “Union Busting?

No. The ability for management to assign work is a standard business practice, not a union busting tactic. The USW claimed at the negotiating table to represent over 100 mines in the United States, yet they could not identify a single mine (including USW-represented mines) where senior employees have the right to select their work crews. The USW represents employees at the neighboring Galena and Stillwater mines, where the job assignment language provides management the ability to make work assignments. Given the fact the USW has agreed to the same job assignment language that was offered by Hecla at the two neighboring mines, their claim that we are union busting is contradictory.

Was Hecla given a reason why the Union would not accept the same terms the USW accepts at similar mines in the area?

Hecla asked for the reason the Union was so quick to reject the offer, as it believed the federal mediator had a good idea that could end the strike. The only reason given for the Union’s rejection was that the systems at the Galena and Stillwater mines did not give the senior miners control of the work places so the Union negotiating team would not agree to the compromise.

There has been a lot of talk lately about the bid system with the Union claiming it proposed a significant change to the process of selecting miners, and Hecla claiming it offered to make a significant modification to its position in an effort to meet in the middle. If both sides are moving toward the middle, why isn’t this issue resolved?

Hecla has maintained the existing Lucky Friday bid system is outdated; that no other mine in the United States has a job assignment system that allows senior employees to dictate where and with whom they work. To improve efficiencies at the Lucky Friday Mine, Hecla needs to convert to a system that is common within the industry. The Union contends Hecla’s proposed system is unproven and difficult to understand.

During the mediation session in November, the federal mediator suggested a concept that he felt had merit and could bring the two sides together. The mediator suggested Hecla offer to convert to a job assignment system in place at either the Galena Mine or the Stillwater Mine, since both are represented by the USW. The mediator suggested the compromise by Hecla provides the Union with a proven and effective system it understands, as both the Galena and Stillwater systems have been negotiated and approved by the USW.

Unfortunately, the Union negotiating committee rejected the mediator’s concept for compromise and instead chose to continue its insistence on maintaining the outdated and unique bid system used at the Lucky Friday Mine. The Union offered to “work with the Company” when selecting miners for job positions, but ultimately, the process proposed by the Union gave the senior miners the ability to dictate which miners they work with, and was essentially the same outdated bid system that existed at the Lucky Friday when the strike began.

In contrast, Hecla’s offer was truly a significant compromise since Hecla offered to drop its entire proposal on the Job Bidding/Job Posting subject and agree to the same USW-negotiated system in place at either of the two nearby mines.

Another area in which Union and Hecla statements differ is with respect to the two parties being deadlocked. The Union states the two parties are not deadlocked because “there is always room to negotiate, always room to move”. Hecla claims the “Company and the Union are deadlocked”. Can you explain?

On October 30, 2017, negotiations between Hecla and the Union broke down when both parties failed to make any progress for the third consecutive meeting. At the time negotiations broke down, the Union owed Hecla responses to the Company’s proposals on all remaining open items, such as Scheduling, Bidding, and Holidays. The two parties had a pre-arranged negotiating meeting scheduled for October 31, 2017, however, collectively agreed to cancel the session.

During November, the Union invited Hecla to a mediation session with a federal mediator. Hecla agreed to the mediation, anticipating responses to its open proposals. The Union arrived at the mediation with no responses, and looked to Hecla to make additional proposals on top of the open proposals the Company offered in September and October. After two days with the mediator, no progress had taken place on any subject and the parties left the mediation with no plans to meet in the future. The Union made no suggestion of if or when it would respond to Hecla’s open proposals. Based on the unproductive history above, referring to the negotiations as deadlocked is the only logical conclusion. If the Union truly believed it had “room to move” and was serious about resolving the strike, it had five full days of negotiation and mediation sessions to do so.

We understand Hecla made a revised final offer. According to statements made by the Union, Hecla’s terms “have not changed” since the strike began. Is Hecla’s revised final offer the same as the offer voted down in March 2017, or have the terms truly changed?

The terms of Hecla’s revised final offer have changed significantly. This statement by the Union is another example of misinformation published by the Union. Hecla’s revised final offer contains significant changes, many of which the two parties have agreed upon. Any suggestion by the Union that Hecla’s terms “have not changed” is deliberately misleading.

Can you give us some examples of the changes contained in the revised final offer?

Hecla and the Union reached agreement on numerous subjects between July and mid-October, and the agreed-upon language is incorporated into the revised final offer. Examples include:

  • Extending the recall period from three months to two years
  • Language increasing the weekly payment for short-term disability
  • Language increasing the vacation time awarded and the vacation value

Additional changes contained in the revised final offer include, among others:

  • Addition of two personal leave days
  • Declaration of Christmas day as a non-production day
  • Limitation on scheduled work hours for mine, mill and maintenance employees of no more than 12 hours per day
  • Conversion of at-risk bonus money to guaranteed wages
  • Increased call-out pay

Does the revised final offer include the Galena Mine or Stillwater Mine work assignment language?

No. During the November mediation, the Union promptly rejected Hecla’s offer to compromise by converting to a USW-approved job assignment system. As a result, Hecla retained its prior language for the revised final offer, with only certain modifications that had been suggested by the Union during the October negotiation sessions.

Another area of disagreement between the Union statements and Hecla statements is on the topic of hauling concentrates. The Union stated, “Teck has cancelled all Lucky Friday concentrate orders.” Hecla claims it began hauling concentrates “and expects to haul again in the near future.” Has Teck cancelled the concentrate orders?

No. Hecla and Teck have a contract for the purchase and sale of Lucky Friday Mine concentrates. No concentrate orders have been cancelled. Hecla plans to continue to haul concentrates in accordance with the terms of the contract. Hecla may haul intermittently to fit its business needs, but no concentrate orders have been cancelled.

Hecla recently stated it hopes the Union will provide its bargaining unit members the opportunity to vote their conscience via a secret ballot vote. What kind of voting process do you expect?

The Union determines if a vote will be held. If the Union holds a vote, the Union determines whether or not they will allow a private, secret ballot vote, enabling each Union member to freely vote his or her conscience without intimidation. Hecla hopes the bargaining unit members are provided the respect and fairness to cast their votes privately.

Was progress made at the November mediation session? If so, what progress was made?

Unfortunately, no meaningful progress was made at the mediation session.

Who requested the mediation session – the Union or Hecla?

The Union asked Hecla if it was willing to mediate and Hecla agreed.

What are the remaining open items?

There are six open items remaining: Scheduling; Wages/Silver Premium Bonus; Holidays; Personal Leave Days; Bidding/Progression system; and Term of Contract.

How long did Hecla and the Union meet, and were proposals exchanged on each of the six open items?

In mid-October, Hecla had provided the Union with proposals on key topics, and was awaiting responses when negotiations broke down on October 30, 2017. The Union arrived at the two-day November mediation session unprepared to respond to any of Hecla’s October proposals, and had no new ideas to suggest.

Did Hecla have any new proposals?

Hecla went into the mediation session expecting responses to the proposals it had provided in October, and advised the mediator it was very interested in working with the Union to reach an agreement, but in order to do so, it needed responses to its October proposals.

Did the Union ultimately provide any proposals?

On the first day of the mediation session, Hecla patiently waited the entire day for the Union to develop a proposal. Disappointingly, the day ended with no response from the Union. Finally, at noon on the second day of mediation, the Union submitted a proposal on Job Bidding/Job Progression.

During the two-day mediation session, did the Union provide a response to Hecla’s proposal on Scheduling?

No.

During the two-day mediation session, did the Union provide a response to any of Hecla’s other outstanding proposals?

No.

Was any progress made following the Union’s proposal on Job Bidding/Job Progression?

The substance of the Union’s proposal was essentially the same as they had proposed in October. The proposal included very minor, non-material changes, and still allowed a senior miner (a/k/a “Sugar Daddy”) to select where and with whom he works.

Was the mediator of any value to the process?

Yes. Given the Union requested the mediation session, and yet failed to arrive with any new ideas or responses to the open Company proposals, the mediator helped to facilitate the process and suggested new ideas.

Did any of the mediator’s suggestions result in any new offers?

Yes, the mediator suggested a “meet in the middle” concept on the core topic of Job Bidding/Job Progression. The mediator’s suggestion had the potential to resolve the most contentious topic in this labor dispute.

Can you describe the offer?

The mediator recognized Job Bidding/Job Progression as the core issue on which the labor dispute is based. He encouraged Hecla to consider a progression system known to the Union elsewhere. The mediator asked if Hecla would consider making a very significant change in its position by dropping its entire proposal on the subject, and instead agree to convert to a system used at another mine represented by the United Steel Workers (“USW”).

To which USW represented mines was the mediator referring?

Any of the USW represented mines in the United States.

Did Hecla agree to the mediator’s suggestion?

After taking time to think about the mediator’s suggestion, Hecla advised the mediator it would agree to a system used in another USW mine, so long as the mine was an underground mine with a shaft. Hecla specifically cited the Stillwater Mine in Montana, and the Galena Mine in North Idaho since both mines are represented by the USW. The mines are reasonably close in proximity to the Lucky Friday Mine and compete for supplies, service providers, and labor. The Union understands the systems used at Stillwater and the Galena, and must believe they are safe as the USW agreed to the respective systems. In addition to being represented by the USW, the Galena Mine is represented by the same Local (No. 5114) that represents the Lucky Friday Mine.

What was Hecla’s offer?

Hecla offered the Union the ability to choose either the Galena Mine system or the Stillwater Mine system as the basis for the system at the Lucky Friday Mine. Hecla expected this significant move to result in a resolution of the Job Bidding/Job Progression issue.

Did the Union accept?

Shortly after sharing the offer with the Union, the mediator returned to advise Hecla the Union was unwilling to agree to either system. The Union insisted on keeping the unique bidding system in place at the Lucky Friday Mine.

Were there further discussions on the subject?

No.

This sounds like a very substantial change by Hecla in its position. Was there any follow up by the Union to try and make this concept work?

The offer was a very significant modification to Hecla’s position. We offered to completely change our position on the core issue of this labor dispute in an effort to meet in the middle. We offered to accept a system known to and used by the Union. Unfortunately, the Union was unwilling to compromise.

Were there further discussions on any of the other open items?

When the Union failed to make meaningful compromise by accepting the system used at either the Galena Mine or Stillwater Mine, insisting on senior employees retaining the ability to dictate where and with whom they work, the mediation session ended.

What is the next step?

Hecla plans to submit a revised final offer to the Union before the end of December.

According to statements made by the Union in November 2017, Hecla’s terms “have not changed” since the strike began. If this is true, wouldn’t Hecla be submitting the same offer it submitted to the Union in January 2017?

If the statements by the Union were true, we would be submitting the same terms. However, the Union’s statements are far from the truth, so Hecla’s revised final offer will be significantly different than the offer made in January 2017.

If the Union’s statements are untrue, what has changed?

The statements by the Union are extremely misleading. Not only has Hecla offered different terms following the strike, the Union and Hecla, subsequent to the strike, have agreed on multiple articles. Hecla and the Union signed off on three full articles in September 2017. These agreed-upon articles include Recall Rights, Seniority, and Short-Term Disability.

Did Hecla’s position change in any other areas?

Hecla has provided changed language regarding Scheduling, Call Out Pay, Vacation, and various other areas.

Was agreement reached in any of these other areas?

Yes. The parties reached verbal agreement regarding Call Out Pay, and Vacation, among other areas.

Is there a primary issue in the negotiations that is preventing resolution of the strike?

The most contentious issue is the Bidding/Job Progression system. Far more time has been spent debating and discussing bidding/job progression than any other issue.

Are there other significant issues preventing resolution of the strike?

Early in the negotiating process, and with the help of the federal mediator, the Company and the Union identified 6 “key” issues (Bidding/Job Progression, Wages, Silver Premium, Scheduling, Health Care Plans, and Vacation). The Company and the Union reached a tentative agreement on the Health Care Plan in March 2017, leaving 5 unresolved key issues. After the strike started, the Union suggested Recall Rights are a key issue. While the Union may view Recall Rights as a key issue, the Company does not rank Recall Rights among its top 5 remaining issues.

Is the Company trying to “bust” the Union with its Offer?

No. As the Company has stated since negotiations began last year, the Company’s Offer contains changes necessary to modernize the operation of the Lucky Friday Mine, to make it safer, more efficient, and to extend the life of the mine. The Company is not attempting to “bust” a union that has been part of the Lucky Friday Mine for many decades.

What Union rights would still be in a new collective bargaining agreement if the Company is not trying to “bust” the Union?

A new collective bargaining agreement, like the agreement from 2010 to 2016, would still include many rights such as the following: 1) the Union is recognized as the representative of the employees; 2) The Company will continue to deduct Union dues from employee paychecks in an amount as provided by the Local 5114 leadership, and send the dues to Pittsburgh; 3) The grievance procedure is unchanged, as it has been for decades; 4) The arbitration provision is unchanged, as it has been for decades; and 5) Despite what the Union has been declaring, seniority rights will still be in a new collective bargaining agreement. The Company, however, has proposed to change where and how seniority applies.

Furthermore, the Union proposed an additional Union right during these negotiations. It proposed that it be given the opportunity to speak with newly-hired employees about the Union during their initial training period. And, during the negotiations, the Company agreed to give the Union this new right.

 

Lucky Friday conversation from AEMA Member Profiles interview with CEO of Hecla
Phil Baker gives update on company projects and Lucky Friday strike with AEMA’s Matt Ellsworth.

Watch the full interview here.

Watch CEO’s message
On March 13, 2017 Hecla Mining Company reported the United Steelworkers Union Local 5114 went on strike at the company’s Lucky Friday Mine, located in Mullan, Idaho.
News / Press Update January 14, 2018
WP-Icon Open Letter to the Community | Shoshone News Press, January 14, 2018
WP-Icon Letter to Employees – Wages | January 12, 2018
WP-Icon Letter to Employees – Back Pay | January 11, 2018
WP-Icon Letter to Employees – Bidding | January 10, 2018
WP-Icon Letter to Employees – Scheduling | December 28, 2017
WP-Icon Letter to Employees – Scheduling | December 28, 2017
WP-Icon Letter to Employees – Summary of Revised Terms | December 20, 2017
WP-Icon Real Questions. Real Answers. | August 30, 2017
WP-Icon Real Questions. Real Answers. | August 23, 2017
WP-Icon Striking Gold for Good of All | The Coeur d’Alene Press, August 16, 2017
WP-Icon Open Letter to the Community  |  Shoshone News Press, July 29, 2017
WP-Icon What the Strike Means to the Local Economy  |  Shoshone News Press, April 5, 2017
WP-Icon To the Employees of the Lucky Friday Mine, April 5, 2017
WP-Icon Here’s Hoping Hecla, Miners Strike Accord  |  The Coeur d’Alene Press, April 2, 2017
WP-Icon Strike Will Hurt All of Silver Valley  |  The Coeur d’Alene Press, March 15, 2017
WP-Icon Hecla Comments on Lucky Friday Strike  |  Shoshone News Press, March 14, 2017
WP-Icon Open Letter to the Community  |  Shoshone News Press
WP-Icon Contract, March 7, 2017
WP-Icon To the Employees of the Lucky Friday Mine, February 10, 2017
WP-Icon To the Employees of the Lucky Friday Mine: Exhibits B&C, February 10, 2017