California Grocers File Suit Over City Approved Hazard Pay For Grocery Workers

A group representing California grocers filed suit Wednesday against Oakland for mandating hazard pay for grocery workers earlier this week.

The California Grocers Association filed suit in federal court in the Northern District of California claiming the $5 per hour pay increase is unconstitutional under U.S. and California law.

Lawyers for the association also filed suit Wednesday against the city of Montebello in Los Angeles County and about two weeks ago against Long Beach after those two cities passed ordinances like Oakland’s.

Grocers are seeking to immediately block the Oakland ordinance, which the City Council approved Tuesday, through a preliminary injunction.

“In addition to clearly violating federal and state law, the extra pay mandates will harm customers and workers,” said Ron Fong, president and CEO of the California Grocers Association.

Oakland and Montebello allegedly violated the Equal Protection Clause in the U.S. and California constitutions, which the association argues requires not just grocery workers, but all essential workers, to get hazard pay.

Oakland’s ordinance also allegedly violates the National Labor Relations Act because it “undermines the collective bargaining process and disrupts the process of union organizing,” according to the complaint.

Specifically, the ordinance regulates or interferes “with the then-existing balance of economic power between labor and management with respect to zones of activity that, under federal law, are intended to be left to the free play of economic forces,” the complaint said.

But Catherine Fisk, University of California at Berkeley labor and employment law professor, doesn’t think either argument has merit.

The “Equal Protection Clause does not prohibit a legislature from regulating wages including by deciding one group of workers are entitled to higher minimum wages than another group,” Fisk said.

“Uber and Lyft just persuaded California voters to enact Proposition 22, which carves out their workforces from minimum wage protection,” Fisk said.

“Congress has long had a provision in the federal Fair Labor Standards Act, which provides a lower minimum wage for employees who earn tips,” she said.

“And so, there is simply nothing illegal about deciding that a group of workers who face extra hazards should be entitled to hazard pay,” Fisk added.

As for violations of the National Labor Relations Act, the act “has never preempted state or local laws regulating minimum standards,” Fisk said.

Oakland’s ordinance mandates the hazard pay for workers at stores over 15,000 square feet in size and with 500 or more employees nationwide. An employee is entitled to the hazard pay if they are entitled to minimum wage and work part-time or full-time.

The ordinance will sunset when Alameda County reaches the least restrictive tier in California’s Blueprint for a Safer Economy.

City Councilmember Nikki Fortunato Bas, who’s co-sponsoring Oakland’s ordinance said, “We believe our emergency ordinance is legally solid and will stand.”

She added, “It’s unfortunate that these huge grocery corporations, the largest in the nation, would rather file lawsuits against cities than share some of the incredible wealth they’ve accumulated during this pandemic with their frontline workers who so desperately need relief.”

But Fong added, “A $5/hour mandate amounts to a 28 percent average increase in labor costs for grocery stores.

“That is too big a cost increase for any grocery retailer to absorb without consequence,” he said.
Grocers can “either pass the costs to customers, cut employee or store hours, or close,” Fong said.

Two hundred workers lost their jobs in Long Beach when two stores closed following the city’s passage of hazard pay, Fong said.

Grocers believe their workers are heroes and that’s why grocers have made massive efforts to make stores safer during the pandemic, he said.

A court date has not been set for the case against Oakland.