Kroger, Albertsons gained the upper hand over Colorado workers through an illegal pact and lawsuits

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Dive short:

• Kroger and Albertsons are facing a class-action lawsuit alleging that union workers for the grocers suffered financial harm because Albertsons agreed not to hire employees of Kroger’s King Soopers banner during a 10-day strike against the Colorado chain in 2022 .
• The purported agreement between the grocers reduced the bargaining power of United Food and Commercial Workers Local 7, causing the union to accept lower employee pay scales for both grocery companies in Colorado, the lawsuit alleges.
• The lawsuit builds on a case filed by Colorado’s attorney general in February to block Kroger from merging with Albertsons, alleging the companies colluded through unlawful “no-poaching” and non-solicitation agreements.

Diving insight:

The class action lawsuit alleges that Kroger and Albertsons both strengthened their hands in dealing with UFCW Local 7 because the retailers entered into an unlawful arrangement in which Albertsons agreed not to attempt to lure King Soopers employees while they worked in January 2022 stood on the picket line. .

Towards Justice, a Colorado-based nonprofit legal organization that says it “defends workers and their rights through impact litigation and policy advocacy,” filed the case Monday in a district court in Denver.

“The Kroger-Albertsons agreement reduced Local 7’s bargaining power, while increasing Kroger’s and Albertsons’ bargaining power, because it helped Kroger mitigate the types of competitive and financial pressures it would normally face during a strike,” claims the lawsuit.

That dynamic led UFCW 7 to agree to a collective bargaining agreement that included less favorable terms for King Soopers employees than the union could have secured, the lawsuit alleges. “The wage increases would have been even higher without the anticompetitive agreement between Kroger and Albertsons,” the complaint said.

After agreeing to a new contract with King Soopers, UFCW 7 used the deal to secure the same wage increases and other improvements with Albertsons for its Colorado workers, using the threat of a strike as leverage. But while the union was able to reach a new deal with Albertsons, it ultimately settled for a less favorable deal than it could have secured “but for the unlawful collusion between Kroger and Albertsons,” the lawsuit says.

“This case is an effort to bring light and justice to the 18,000 unionized grocery store workers, and to the thousands of non-union grocery store workers, who have been harmed by this hidden and illegal deal,” said Kim Cordova, president of UFCW Local 7. said in a statement.

A Kroger spokesperson said in an emailed statement that there were “no no-solicitation or so-called no-poaching agreements between Kroger and Albertsons” and added that only a small portion of its employees come from or to Albertsons is moving.

“Kroger competes for talent in a broad and diverse labor market, including from non-grocery and non-union retailers such as restaurants, food service companies, convenience stores, warehouses and more,” the spokesperson said.

Albertsons did not respond to a request for comment at the time of publication.