Members of a union representing 22,000 hourly workers at Walt Disney World rejected a contract that would have raised wages but increased health insurance premiums.
Disney and union officials agreed to extend the current contract until midnight Monday to give the two sides more time to hammer out on acceptable agreement. The extension avoids a possible strike or walkout for the theme park resort, which employs 50,000.
Union members voted down the contract 2,281 to 1,004 late Thursday.
"We're disappointed," said Disney spokesman Bill Warren. "We certainly thought it was a very fair offer."
The contract was rejected because it called for increased co-payments for health insurance and eliminated free managed care, said Harvey Totzke, president of the Service Trades Council. The council is made up of six unions representing laundry workers, cooks, animal-care specialists, seamstresses, make-up artists, lifeguards, food-service workers, drivers and costume characters.
Under the proposed contract, only one of Disney's five health plans would have remained free for employees and their families. Two managed-care plans, which had been free, would have cost from $1.39 a week for a single employee to $13.92 a week for an employee and two dependents.
"That was a bitter pill to swallow," Totzke said.
Leaders of the council had tentatively agreed to the 30-month contract, which would have increased Disney's starting wage from $5.95 an hour to $6.25 an hour.
For employees with five years or more, the maximum pay rate would have moved from $10.07 an hour to $10.42 an hour. The contract also would have guaranteed employees more raises through spring 2000.
Some workers complained that the pay raises weren't big enough and that Disney was phasing out free theme-park passes and merchandise discounts for workers.
They said Disney could afford to pay $7 an hour to $8 an hour considering the company has given generous stock option bonuses to top management. Disney earns about $2 billion a year in profits, although earnings for the past quarter were down about 25 percent.
"This offer was a slap in the face," said Duke Derdock, a costume character at Disney-MGM Studios. "It's just a great relief that it failed."
Union members twice rejected contract proposals during the last negotiations four years ago. Negotiations dragged on for four months before a contract agreement was reached.