For Saag’s employees, severance package could equal $50 per year of work — or less – California


For $50, you can go to your local grocery store and, depending on the price, pick up half a dozen or so packages of good-quality sausage links.

Or, you can take $50 and pay a year’s severance for a worker at Saag’s Products, the longtime Bay Area sausage company that is shuttering its San Leandro plant.

Smithfield Foods, the Virginia-based owner of Saag’s — which has produced sausages at its facility at 1799 Factor St. in San Leandro for 45 years and dates back to 1933 — is closing its Bay Area operations on June 28. For the factory’s 81 workers, the indignity of losing their jobs is compounded by what their union representative calls a disrespectful way for Smithfield to show its sentiment for those employees.

“We anticipated they were going to be reasonable company,” said John Nunes, president of United Food and Commercial Workers Local 5, the union representing Saag’s employees. “A lot of them have more than 15 or 20 years service here. And (Smithfield) told us that on a philosophical level, they don’t believe in paying severance.”

Saag’s employees held a walkout at the San Leandro facility starting at 1:30 p.m. Friday.

Nunes said the Saag’s employees were notified approximately 60 days ago about Smithfield’s plan to close the San Leandro location and move production of Saag’s sausages to another location near Los Angeles. Smithfield appears to have changed its mind on the severance issue, but only in the barest of terms.

According to the memo, of which this news organization obtained a copy, Smithfield is offering employees with zero to four years of experience what it calls a “lump sum bonus payment” of $500. Based on that rate, working four years at Saag’s gets you the equivalent of $125 a year as a “bonus.”

Workers with five to 15 years of service can get $750. So, employees who put in 15 years would collect $50 for each year of stuffing bratwurst into Saag’s packages.

Sixteen years will get employees $1,000, or $62.50 for each year at the plant. Anyone working more than 16 years is eligible for that same $1,000. So someone who worked for 30 years at Saag’s would receive $33.33 for each year at the factory.

Actually, Saag’s workers might get a bit less than those yearly averages: Smithfield said it would include any accrued sick pay as part of employees’ “bonus” packages. Then again, Smithfield was quick to remind its employees that all “bonus” payouts were considered taxable income. That 30-year employee isn’t going to get even $33.33 a month for his efforts.

In a statement, Keira Lombardo, Smithfield’s executive vice president of corporate affairs and compliance, did not address the severance issue. However, she said Smithfield is a “people-oriented company” and had “partnered with the Workforce Development Board and had them onsite at the end of May to explain all the resources available to impacted employees through CalJOBS.”

Nunes, the union representative, said that Smithfield refused to give its soon-to-be-laid-off Saag’s employees any extra assistance such as COBRA benefits, which allow laid-off employees to retain their company’s insurance coverage for a limited amount of time.

“We really pleaded with them to give assistance on COBRA benefits,” Nunes said. “In a situation like this, they wouldn’t give (Saag’s employees) any assistance. They said the 60-day notice was a form of benefits.”


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