M Macys Inc

By Suzanne Kapner 

Macy's Inc. and the union representing workers at its flagship Herald Square store and other New York City locations reached a tentative contract agreement, averting a strike that had been called for Thursday.

The Retail, Wholesale and Department Store Union, which represents 5,000 Macy's workers, said its negotiating committee approved the tentative deal, and the stores opened as usual.

A Macy's spokeswoman said the company is pleased with the outcome but wouldn't comment on the contract's terms or on the issues the union raised in negotiations. The accord has to be ratified by union members, which is expected to happen next week.

The union had threatened a strike at the flagship store and other New York area stores to protest what it said were a costly health-care plan and low wages, among other issues.

Retailers including Wal-Mart Stores Inc. and Gap Inc. have faced pressure from rising wages at a time when sales have stalled.

In May, Macy's reported its worst quarterly sales since the recession and earlier this year laid off thousands of employees and closed 40 stores.

According to the union, the two sides reached a four-year contract that includes substantial wage increases and lower-deductible health insurance. It also maintains a policy that allows workers to volunteer to work holidays like Thanksgiving and Christmas, rather than making such work mandatory.

The union had said the previous health-care plan required employees to pay a deductible of as much as $3,000 a year before they could receive coverage. For families, the deductible rose to $6,000. Union officials said the high expense is one reason 75% of Macy's workers don't participate in the plan.

Write to Suzanne Kapner at Suzanne.Kapner@wsj.com

(END) Dow Jones Newswires

June 16, 2016 19:53 ET (23:53 GMT)

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