The California Grocers Association filed a federal lawsuit Wednesday against the city of Montebello, challenging a city ordinance requiring a $4 “hero pay” salary boost for some workers during the COVID-19 pandemic.
“In addition to clearly violating federal and state law, the extra pay mandates will harm customers and workers,” said Ron Fong, president and CEO of the California Grocers Association.
A $4-per-hour mandate amounts to a dramatic increase in labor costs for grocery stores, Fong said.
“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. Already two stores closed in Long Beach after the city enacted a $4/hour pay increase. Nearly 200 workers lost those jobs.”
The Montebello City Council voted last month to require large drug and grocery stores to give its employees a $4 per hour pay raise for the next 180 days despite the likelihood of a lawsuit.
Before the unanimous vote, the council was told that the California Grocers Association had already sued the city of Long Beach and would probably sue other cities passing similar ordinances.
On Monday, grocery company Kroger announced it will be shuttering two of its stores in Long Beach — a Ralphs location and a Food4Less store — in response to the city’s ordinance requiring a $4 salary boost. The United Food and Commercial Workers union blasted Kroger’s decision as an attack on workers.
“Grocery store workers are frontline heroes, and that’s why grocers have already undertaken a massive effort to institute measures to make both workers and customers safer in stores,” Fong said. “Firefighters, police officers, health care workers, as well as transportation, sanitation and restaurant workers, are essential, yet grocers are the only businesses being targeted for extra pay mandates. These ordinances will not make workers any safer.”
The CGA alleges that in voting to approve the ordinances, councils in Long Beach and Montebello have ignored low profit margins, and significant operational costs grocers have incurred in response to the pandemic, including the hiring of tens of thousands of additional employees.
On Tuesday, the Los Angeles City Council voted unanimously to move forward with a proposed emergency ordinance that would require grocery and pharmacy retailers with 300 or more employees nationally and 10 or more employees on site to add the $5 hazard pay to all hourly, non-managerial employees’ wages for 120 days.