The union's vehemence stemmed from the suspicion that Group Health's alliance with Virginia Mason would lead to massive layoffs through a consolidation of staffs and facilities and to decertification of existing labor representation. The union's worst fears seemed to be realized when the boards of both organizations voted on June 14, 1995, to pursue "closer ties." This took the form of proposals to establish a jointly owned operating company to manage most of their respective assets and to develop new enterprises, and to reorganize Group Health's Central Hospital to handle maternity care and out-patient surgery while all overnight acute care was transferred to Virginia Mason's First Hill campus.
The nurses' issue was not so much over paychecks -- Group Health still paid the highest salaries in the market -- as it was job security. The union had already made what it considered to be major concessions by accepting a three-year wage freeze, benefit cuts, and a 10 percent across-the-board reduction in staff. The union's key demand was to limit future layoffs to those with the least seniority.
Group Health returned to the bargaining table with a federal mediator sitting in. A new contract was finally hammered out on August 30, 1995.
