Lawsuit claims King Soopers, Albertsons rigged system in 2022 strike

A new lawsuit alleges that grocery chain rivals Kroger and Albertsons colluded during a 2022 strike in Colorado to reduce union leverage at the bargaining table, resulting in lower wages and benefits than workers would have otherwise won.

The lawsuit filed Monday targets the same alleged “no-poach” agreement that Colorado Attorney General Phil Weiser said Kroger and Albertsons Cos. agreed when members of the United Food and Commercial Workers Local 7 went on strike against King Soopers.

Weiser said in a lawsuit challenging a proposed $24.6 billion merger of Albertsons and Kroger, which owns King Soopers and City Market in Colorado, that emails between the two chains show Albertsons agreed not to hire King Soopers employees or request the company’s pharmacy customers during the period. strike. Weiser is seeking a civil penalty of $1 million from each company for what he calls an unlawful restraint of trade.

The lawsuit by King Soopers employee Valarie Morgan seeks higher wages, benefits and damages for thousands of grocery store workers whose bargaining rights it says were undercut by a deal between Kroger and Albertsons. Attorneys for the nonprofit law firm Towards Justice and Edelson PC have requested that the complaint be certified as a class action.

“These companies rigged the system against us and undermined our right to fight for better wages and fair treatment through our unions,” Morgan said in a statement.

The Colorado Attorney General’s office declined to comment on the new lawsuit because the issue is part of the state’s efforts to block the Kroger-Albertsons merger on antitrust grounds. A decision by Denver District Judge Andrew J. Luxen is pending in the case.

Kim Cordova, president of the United Food and Commercial Workers Union Local 7, said while progress was being made on the 2022 contract, she believes it could have been better. The contract approved soon after with Albertsons was similar to King Soopers’ deal.

“Had we known that the companies were working together in a coordinated effort to harm the members, we believe the outcome would have been different,” Cordova said.

The union would have changed its strategies, Cordova added.

Kroger and Albertsons, which own Safeway stores in Colorado, have previously denied any deals. Requests for comment were left with the companies on Monday.

But the lawsuit filed in Denver District Court by Morgan alleges that an agreement between the two grocery chains artificially reduced the union’s bargaining power while increasing Kroger’s leverage. The complaint said a business dealing with a strike could face pressure if competitors hire away workers and lure away customers.

“This competition puts pressure on an employer to end a strike, including by making more concessions to workers at the bargaining table,” the lawsuit states.

But in the case of the King Soopers strike, the “anti-competitive agreement” resulted in pay scales that were lower than they would have been if the collusion had not occurred, according to the lawsuit.

“Kroger and Albertsons’ agreement reduced Local 7’s bargaining power while increasing Kroger and Albertsons’ bargaining power because it helped Kroger mitigate the kinds of competitive and economic pressures it would normally face during a strike,” it said the trial.

Albertsons knew King Soopers’ contract would provide the basis for its own upcoming negotiations with the union, the lawsuit claimed.

And the impact extended beyond union members because the companies effectively set non-union wages based on pay scales in the collective bargaining agreements, according to the lawsuit.

“We certainly think that, on its face, there appears to be strong evidence that workers would have gotten a much better deal if their bargaining power had not been artificially undermined in an anticompetitive way,” said David Seligman, executive director of Towards Justice, to The Denver Column.

Seligman said the goal is to determine, from testimony from people involved in the negotiations and labor economists, what kind of contract union members might have obtained if their bargaining power had not been undermined.