The California Grocers Association on Friday filed federal lawsuits against the cities of San Jose and Daly City, challenging new regulations requiring large grocers to boost the hourly wages of employees who are risking their health to serve customers during the coronavirus pandemic.
Under Daly City’s “hazard pay” legislation, which went into effect immediately after it was passed on March 8, large grocers must pay workers an extra $5 an hour of “hazard pay” on top of their regular wages. In San Jose, where the ordinance will go into effect in a couple of weeks, grocers will be required to provide employees with raises of $3 an hour.
The trade group, which represents grocery stores across the state, seeks to have a court declare the laws unconstitutional and halt them from taking effect.
The lawsuits filed Friday in the Northern District of California argue that the regulations are illegal because they single out certain grocers while ignoring other groups that employ essential frontline workers and the regulations are preempted by the federal National Labor Relations Act, which protects the integrity of the collective-bargaining process.
“In addition to clearly violating federal and state law, the extra pay mandates will harm customers and workers,” Ron Fong, president & CEO of the California Grocers Association, said in a 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.”
San Jose and Daly City and among more than a dozen cities across California to enact such laws in recent months, though not all of them have faced legal challenges from the Grocers Association. As of Friday, Long Beach, Montebello, Oakland, San Leandro and West Hollywood have also been sued by the group.
The latest lawsuits filed against San Jose and Daly City come just two days after supermarket-chain owner Kroger announced it would close three stores in Los Angeles in response to the city’s “hero pay” ordinance that was passed late last month.
The California Grocers Association has long contended that the mandatory pay increases would cause grocers to take cost-cutting initiatives, such as store closures and increasing the price of goods, to compensate for the additional labor costs.
Grocery workers and the unions representing them up and down the state, however, argue that grocery stores saw an uptick in profits during the pandemic and have the ability to cover the additional costs. Many grocery stores bumped up workers’ pay early into the pandemic but then stopped when some of the public health orders were lifted.
Jim Araby, a spokesman for UFCW Local 5, which represents about 23,000 grocery workers in Northern California, said Friday that he “feels confident we will prevail.”
“Instead of trying to litigate against rewarding their workers with the pay they deserve, maybe grocers should spend that time taking care of their workers,” Araby said. “By the time they get through the litigation process, we’ll be out of the pandemic.”