While many health care companies have responded to cost pressures by jettisoning employees, Kaiser Permanente and a coalition of its AFL-CIO unions have agreed on a different course.

Kaiser and the Coalition of Kaiser Unions, representing 60,000 employees, have signed a pact that could come close to eliminating layoffs despite the rapid changes in the industry. From now on, union members displaced due to restructuring will get new jobs in the same area with comparable pay and working hours. When this is not possible, employees will be guaranteed continuation of their pay, benefits and other conditions for one year while Kaiser retrains them or finds them new jobs.

Kaiser and the unions also agreed to joint workforce planning so the company and its employees can prepare for changing workforce needs.

Oregon FNHP president Kathy Schmidt, a leader in the union coalition, says the agreement is good news for patients and for the company as well as for employees. Job security, she said, will allow workers to be creative in proposing ways to improve patient care and cost efficiency.

"Initially, this is going to cost Kaiser money for setting up the planning and retraining systems. But in the near future, it will make Kaiser more efficient and keep us a step ahead of the competition," said Schmidt.

Schmidt said other companies could follow Kaiser's lead, but "with the emphasis on short-term gains, this is not something that corporate health care has embraced in this country." The unions and Kaiser managers looked at models from the auto industry and banking, among others, to learn how to create high performance through labor-management cooperation.

The job security pact grows out of an agreement reached by Kaiser and the unions in 1997 to turn labor-management relations in a new direction. Kaiser agreed to stay neutral in organizing campaigns. Recently, in response to union pressure, Kaiser announced it would begin using safe needles to avoid needlestick injuries, even outside of California where the law requires them.