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CGA Press Release: California Grocers Association Files Lawsuits Against Daly City and San Jose Challenging Illegal Extra Pay Mandates for Grocery Workers

Contact: Nate Rose, Senior Director of Communications, CA Grocers Association [email protected]

Mandates violate National Labor Relations Act and equal protection clauses in U.S. and California Constitutions

Sacramento – The California Grocers Association (CGA) today filed federal lawsuits against the cities of Daly City and San Jose challenging ordinances approved in those cities. Daly City mandated an additional $5/hour and San Jose $3/hour in extra pay for a select group of grocery store employees.

“In addition to clearly violating federal and state law, the extra pay mandates will harm customers and workers,” said Ron Fong, president & CEO, California Grocers Association “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. Options are few. Either pass the costs to customers, cut employee or store hours, or close. Already five stores in Los Angeles County have closed after extra pay mandates were enacted.”

A recent study found that an extra pay mandates of $5/hour could raise consumer grocery prices by about $400 annually for the typical family of four. Alternatively, if grocers were forced to find offsetting savings in operational costs, it would mean a 22 percent across-the-board reduction in work hours, hurting the very workers these proposals aim to help.

The Daly City and San Jose lawsuits allege similar violations of law as cases filed by CGA in Long Beach, Montebello, Oakland, San Leandro and West Hollywood.

The extra pay mandates passed by the cities have been illegal in two main ways: 1) By singling out certain grocers and ignoring other groups that employ essential frontline workers, the ordinances violate the U.S. Constitution and the California Constitution’s Equal Protection Clauses, which require similarly situated people to be treated alike; and 2) the ordinances are preempted by the federal National Labor Relations Act, which protects the integrity of the collective-bargaining process.

The suits against Daly City and San Jose were filed in the Northern District of California. Both ask the courts to declare the ordinances invalid and unconstitutional.

“Grocery store workers are frontline heroes, and that’s why grocers have already undertaken a massive effort to institute measures to make both workers and customers safer in stores,” continued Fong. “Firefighters, police officers, health care workers, as well as transportation, sanitation, and restaurant workers are essential, yet grocers are the only businesses being targeted for extra pay mandates. These ordinances will not make workers any safer.”

In voting to approve the ordinances, local officials have ignored low profit margins and significant operational costs grocers have incurred in response to the pandemic, including the hiring of tens of thousands of additional employees due to the pandemic.