This article has been saved to your Favorites!

Seattle Beats Grocers' Challenge To Pandemic Pay Law

By Max Kutner · March 18, 2021, 6:55 PM EDT

A Seattle hazard pay ordinance giving workers a wage boost amid the coronavirus pandemic survived a challenge by a pair of grocery industry groups Thursday when a Washington federal judge agreed to dismiss the case after finding the groups' claims were insufficient.

In an order, U.S. District Judge John C. Coughenour granted Seattle's motion to dismiss the suit by the Northwest Grocery Association and the Washington Food Industry Association, saying the groups had failed to state a claim that the ordinance was unconstitutional or preempted by federal labor law. The judge also denied the groups' bid for a preliminary injunction.

"None of these arguments establish valid claims for relief and plaintiff's complaint must be dismissed," Judge Coughenour said.

Judge Coughenour did not agree with the associations' claims that Seattle's Grocery Employee Hazard Pay Ordinance is preempted by the National Labor Relations Act and violates the equal protection and contracts clauses of the U.S. and Washington state constitutions.

When it came to the preemption claim, Judge Coughenour cited past court holdings that the NLRA doesn't overcome "minimum labor standards" that set terms that could be subject to collective bargaining but do not directly affect the bargaining process itself.

"The mere fact that a state law affects — and in effect, grants to employees — something for which they otherwise could have bargained does not give rise to NLRA preemption," Judge Coughenour said in the order.

The associations' claims that the ordinance violates the equal protection clauses by imposing restrictions on only certain employers failed too, according to the judge. The judge rejected the argument for the claim that the law needed to be subject to "strict scrutiny," saying that applying such a review "would likely obliterate the ability of government to regulate any economic activity at all."

The ordinance instead only needed a "rational basis" review, which it would survive, Judge Coughenour said.

"The decision to apply the ordinance only to large grocery stores constitutes such a reasonable ground bearing a natural, reasonable and just relation to its subject matter," the judge said.

The associations' claims that the law interfered with contracts also failed, the judge said. The groups had not specified any contract terms that the ordinance might impair, and a law compensating grocery store workers during the pandemic passed the test for "significant and legitimate" public purposes, according to the judge.

The ordinance, which went into effect Feb. 3, grants a $4 hourly wage hike to workers at Seattle grocery stores of a certain size. The associations sued the day it went into effect, and later that month, Seattle filed its motion to dismiss.

On March 8, the associations had urged the court not to dismiss, claiming the ordinance has "no legitimate connection" to the safety of workers and the public.

Grocery industry groups have sued other cities over pandemic "hero pay," including in Long Beach, California.

Amanda Dalton, president of the Northwest Grocery Association, said the groups were disappointed with the ruling.

"We still feel strongly that our arguments have merit and that the ordinances are unfair and do nothing to protect workers from COVID-19," Dalton told Law360 on Thursday. "We also are concerned that they set a damaging precedent for other unfair application of wage laws."

Dalton said they are considering filing an appeal in the coming days.

In a statement Thursday, Washington Food Industry Association president and CEO Tammie Hetrick said, "The state's own data shows that grocery stores are not hazardous, and our workers will soon be vaccinated. Now is not the time to enact hazard pay ordinances."

Seattle City Attorney Pete Holmes said in a statement Thursday, "This is a big win for grocery store employees who have been critical and vulnerable frontline workers since the start of the pandemic. We brought strong legal arguments to prevail today."

Counsel for the associations did not immediately respond to a request for comment.

The associations are represented by Tritia Murata and William Francis Tarantino of Morrison & Foerster LLP and Vanessa Soriano Power and Adam S. Belzberg of Stoel Rives LLP.

Seattle is represented in-house by Derrick Anthony De Vera, Erica R. Franklin and Jeremiah Miller.

The case is Northwest Grocery Association et al. v. City of Seattle, case number 2:21-cv-00142, in U.S. District Court for the Western District of Washington.

--Additional reporting by Daniela Porat and Mike LaSusa. Editing by Abbie Sarfo.

For a reprint of this article, please contact reprints@law360.com.