CGA Press Release: California Grocers Association Files Lawsuits Against Oakland and Montebello 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 City of Oakland and City of Montebello to challenge ordinances approved by them mandating an additional $5/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 two stores closed in Long Beach after the city enacted a $4/hour pay increase. Nearly 200 workers lost those jobs.”

A recent study found that an extra pay mandates of $5.00/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 Oakland and Montebello lawsuits allege similar violations of law as the Long Beach case filed by CGA on January 20. The extra pay mandates are illegal in two main ways: 1) By singling out certain grocers and ignoring other groups that employ essential frontline workers, the Ordinance violates the U.S. Constitution and the California Constitution’s Equal Protection Clauses, which require similarly situated people to be treated alike; and 2) the Ordinance is preempted by the federal National Labor Relations Act, which protects the integrity of the collective-bargaining process. The causes of action against Oakland and Montebello are the same

The first hearing in the Long Beach case is set for February 19.

The suit against Oakland was filed in the Northern District of California and the suit against Montebello was filed in in Los Angeles federal court. 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, councils in Long Beach, Oakland and Montebello 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

The LA Times editorialized against the Long Beach and similar mandates noting, Government shouldn’t be picking winners and losers, or who deserves ‘hero pay’ and who doesn’t. The hazard pay proposals are not fair to all essential workers, and they may not be legal.”