California Grocers Change Strategy Over City's 'Hero Pay' Law

By Max Kutner
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Law360 (May 7, 2021, 3:08 PM EDT) -- The California Grocers Association updated its lawsuit challenging a city ordinance that mandates premium pay for workers during the coronavirus pandemic, shifting from attacking the law on its face to challenging how it applies to the group's members and their collective bargaining.

In an amended complaint Wednesday, the grocers association added details to bolster its argument that the National Labor Relations Act preempts the city of Montebello's ordinance because the local law infringes on collective bargaining, after the city had argued in a motion to dismiss that the preemption claim failed.

CGA members with stores in Montebello have collective bargaining agreements with United Food and Commercial Workers International Union Local 770, and the NLRA bars state and local legislation from interfering with such pacts, the association said in new language in the amended complaint.

"Each of the agreements between CGA's members and UFCW 770 set forth specific requirements for vacation time, meals and all other forms of compensation," the amended complaint said. "Those contracts … prohibit the alteration of wages or other compensation unless expressly permitted by the terms of the agreement, or agreed to by the collective bargaining unit.

For nearly all CGA members with stores in Montebello, their CBAs are not up for renewal until March 2022, the complaint said.

CGA also emphasized that its interest in the ordinance relates to its members in the Southern California city. The organization added new language throughout the amended complaint saying its concerns were with the ordinance "as applied to CGA's members with retail operations in Montebello."

The amended complaint also adds the names of specific CGA members in Montebello: Albertsons, the Kroger Co. and Super A Foods.

CGA, which has more than 300 members, sued Montebello in February over its Premium Pay for Grocery or Drug Store Workers ordinance. Under the law, which the City Council passed in January, grocery and drug stores of a certain size must give employees a temporary $4 hourly pay bump for six months.

The association said the ordinance was invalid and unconstitutional because the NLRA preempted it and because it violated the equal protection clauses of the federal and California constitutions by singling out one group of businesses for restrictions. The ordinance also violated those constitutions' contracts clauses, the group said.

In March, UFCW Local 770 sought to intervene in the case, arguing that it should be able to join because the grocers association had accused it of trying to bypass collective bargaining processes to get workers higher pay.

Later that month, Montebello asked the judge to toss the association's claims, arguing that there was no NLRA preemption because the ordinance did not infringe on collective bargaining.

"In the specific context of collective bargaining, the ordinance facially does not prohibit any bargained employment term, but merely provides a $4 increase to whatever terms are agreed upon," the city had said in its motion to dismiss.

The amended complaint came before the judge had ruled on the city's motion to dismiss the original complaint.

The suit against Montebello is one in a wave of challenges by grocery industry groups against cities over "hero pay" or hazard pay ordinances. These lawsuits, which typically have been brought by the same counsel and have made the same claims, have so far been unsuccessful in Seattle; Burien, Washington; and Long Beach, California. Some of those challenges are ongoing.

A Montebello spokesperson declined to comment.

Counsel and a spokesperson for CGA did not immediately respond to requests for comment.

Counsel for Montebello did not immediately respond to a request for comment.

CGA is represented by Byung-Kwan Park, Robert Santos Sandoval, Tritia M. Murata and William F. Tarantino of Morrison & Foerster LLP, and Kirill Penteshin of Schwartz Steinsapir Dohrmann & Sommers.

The city is represented by Christy Marie Garcia of Alvarez-Glasman & Colvin.

The case is California Grocers Association v. City of Montebello, case number 2:21-cv-01011, in U.S. District Court for the Central District of California.

--Additional reporting by Tim Ryan, Daniela Porat and Mike LaSusa. Editing by Neil Cohen.

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