Grocers organization sues Oakland, Montebello over forced pay hikes

As a movement to give grocery workers a temporary pay hike gains steam, an industry group has sued the cities of Oakland and Montebello over legislation requiring the raises.

In Oakland, some large grocers must pay workers an extra $5 an hour of “hero pay” for risking their health to serve customers during the coronavirus pandemic. The bonus in Montebello is $4 an hour.

In lawsuits filed Wednesday, the California Grocers Assn. said the city ordinances are illegal because they single out large grocery companies and interfere in “the free play of economic forces.”

Grocers voluntarily granted hazard pay early in the pandemic and have provided coronavirus testing, leaves of absence and personal protective equipment, the lawsuit said.

The grocers association earlier sued Long Beach on similar grounds. Kroger has announced it is closing a Ralphs and a Food 4 Less in the city because of the mandated $4-an-hour pay hike.

“Firefighters, police officers, healthcare workers, as well as transportation, sanitation, and restaurant workers are essential, yet grocers are the only businesses being targeted for extra pay mandates,” Ron Fong, the association’s president and chief executive, said in a statement. “These ordinances will not make workers any safer.”

Paying workers an extra $5 per hour increases labor costs by an average of 28%, Fong said in the statement.

“That is too big a cost increase for any grocery retailer to absorb without consequence,” he said. “Options are few. Either pass the costs to customers, cut employee or store hours, or close.”

Montebello spokesman Michael Chee declined to comment, saying in a statement that the city “has neither received nor been notified about a lawsuit from the California Grocers Assn.”

Oakland officials did not immediately respond to a request for comment.

In Los Angeles, council members voted unanimously Tuesday in favor of a $5 pay increase for grocery store workers.

“They absolutely can afford this increase,” Councilman Paul Koretz said. “They absolutely should be paying this increase. And if they shut down stores, it’s just out of spite.”

The store closures in Long Beach have ignited a wave of blowback from employees and customers, including Mayor Robert Garcia, who joined a crowd of protesters at the soon-to-be shuttered Food 4 Less on Wednesday.

Kroger called the city’s mandated pay hike “a misguided action.”

“We are truly saddened that our associates and customers will ultimately be the real victims of the City Council’s actions,” the company said in a statement.

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