Grocers Association Sues Oakland Over Grocery Worker Hazard Pay Mandate
SACRAMENTO (CBS SF) -- The move by the City of Oakland to mandate hazard pay for grocery store workers has prompted a lawsuit from an industry group.
The California Grocers Association on Wednesday filed suit against Oakland a day after Oakland city councilmembers voted to require large grocery stores to raise workers' pay by $5 per hour. The ordinance was passed as an emergency ordinance, so it takes effect immediately.
The grocers association filed a similar lawsuit against the city of Montebello in Los Angeles, which voted for a $4 an hour increase for grocery workers.
"In addition to clearly violating federal and state law, the extra pay mandates will harm customers and workers," said CEO Ron Fong in a prepared statement. "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."
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In an email to KPIX 5, the Oakland City Attorney's Office responded, ""The City has not yet been served with this lawsuit. Once served, we will review it and respond accordingly. Regardless, the City remains committed to ensuring that front-line grocery workers receive appropriate compensation for the hardships and/or risks associated with working for the people of Oakland during the COVID-19 pandemic in this critically important manner."
Oakland has about 2,000 grocery workers and most are Black, Hispanic and/or women. City Council President Nikki Fortunato Bas said grocery workers have been working non-stop for the duration of the pandemic and that large grocery chains can afford the increase since they are making enormous profits.
Research by The Brookings Institution shows that 13 of the largest retail and grocery stores in the nation earned a combined $17.7 billion more in the first three quarters of 2020 than in 2019, a 42 percent increase. Researchers add that many of the top companies earned billions during and because of the pandemic and have passed little onto their workers.
Oakland's ordinance is temporary, sunsetting when Alameda County reaches the yellow tier, also known as the least restrictive tier, in the state's Blueprint for a Safer Economy.
The grocers association said the extra pay mandates violate the U.S. and California constitution's Equal Protection Clauses, which require similarly situated people - grocery store workers and other essential frontline workers - to be treated alike.
"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," said Fong. "These ordinances will not make workers any safer."
The lawsuit also alleges the ordinance is preempted by the federal National Labor Relations Act, which protects the integrity of the collective-bargaining process.
