Tourists can rest easy. Macy’s (M) and the union representing workers at stores, including its flagship in Manhattan, have cut a deal that averts a strike.
Macy’s and the Retail, Wholesale and Department Store Union reached the agreement on Thursday hours after a midnight deadline to renew a collective bargaining agreement that had expired in early May. The new four-year contract affects 5,000 workers in the New York City area and includes wage increases, changes to their health care plan, and fairer scheduling, according to the union.
“It raises the bar for what retail jobs can be and should be,” union president Stuart Appelbaum said in a statement.
The most contentious issue had been Macy’s health insurance plan, which the union claimed was too expensive for 75% of workers because of large deductibles. The union expects the deal to be ratified within a week.
“We are pleased with the outcome of our overnight negotiations” Macy’s spokeswoman Elina Kazan wrote in an email to Fortune.
In a pressure tactic, Macy’s had placed ads in several local papers, including the New York Times, this weekend for temporary workers “in anticipation of a possible labor dispute.” It was a move Macy’s had also made in 2011 when it also faced the prospect of a strike. The last time the department store’s workers struck was in 1972.
A work stoppage would not have come at a worse time for Macy’s, which also owns the luxury Bloomingdale’s chain and operates 800 namesake stores. Last month, the retailer reported its fifth straight quarterly comparable sales decline, hurt by heavy discounting in apparel, a key category, as consumer spending shifted away to areas like home improvement.
Macy’s Manhattan flagship is by far the biggest store in its fleet and is crucial to marketing the overall chain. The store on 34th Street is among the most visited tourist sites in New York, up there with the Empire State Building and the Statue of Liberty.