California’s attorney general has filed a lawsuit against the three grocery chains that are the targets of a strike in the southern part of the state, contending that a mutual aid agreement used during the strike is a violation of anti-trust laws, his office announced recently.
Under the agreement, which started Aug. 5, 2003, Vons, Albertsons and Ralphs agreed to share revenue and costs lost or gained as a result of the strike, the attorney general’s office said in a statement.
The lawsuit asks the court to declare that pact a violation of the federal Sherman Antitrust Act.
"This action is about protecting shoppers against unlawful, anti-competitive conduct that keeps prices artificially high," Attorney General Bill Lockyer said in the statement. "The grocers' agreement to share costs and revenue hurts consumers by discouraging competitive pricing. The antitrust law exists to prevent that, and I intend to enforce the law.”
The attorney general’s action is one of several that are turning up the heat on the three companies.
In late January, officials of the California Public Employees Retirement System sent letters to Steven A. Burd, chairman, president and CEO of Safeway Inc., which owns Vons; Lawrence R. Johnston, chairman, president and CEO of Albertsons Inc.; and David Dillon, chairman of Kroger Co., which owns Ralphs.
The letters, which encouraged the three companies to settle the strike, attempted to use the retirement system’s position as a shareholder in the three companies as leverage. They were sent by CalPERS and singed by Rob Feckner, vice president of the CalPERS board of administration and chairman of the CalPERS investment committee.
The letters noted that the system owns tens of millions of dollars worth of stock in the three companies, and urge the firms to resolve their dispute with the workers “fairly and expeditiously.”
“As a long term investor, we believe that fair treatment of employees is a critical element in creating long term value for shareowners,” Feckner wrote. “We feel that your corporation’s blatant disregard for quality of life issues for your long term employees is having a significant impact on our investment in your corporation.”
The AFL-CIO has also joined in stepping up pressure on the three chains. The group is the parent organization of the United Food and Commercial Workers, which is conducting the strike.
The labor umbrella organization has called on its members across the United States to take actions against the three grocery chains, including bringing picket lines to markets outside the strike area. Those stepped up efforts included a recent protest by more than 1,000 people at Vons corporate headquarters in Arcadia, a suburb of Los Angeles, The AP reported. During that incident, several labor and religious leaders were arrested for trespassing on Vons’ property.
In addition, The Associated Press reported recently that the AFL-CIO had assigned two of its top leaders to coordinate national strategy in support of the strike. Richard Trumka, the labor group’s secretary treasurer, and Ron Judd, another to AFL-CIO official, will coordinate activities outside the strike zone and contact executives of the national firms behind the California chains.
“We’re bringing the pickets to new markets, additional markets other than Southern California,” Sarah Massey, a spokeswoman for the AFL-CIO, told Land Line. “We have brought pickets to the Bay Area and Seattle previously, and those I think are definitely markets we’re looking at. … Anywhere where Safeway has a big market, we’re going to look at.”
As if law-enforcement, the state retirement system and labor weren’t enough, now even the Girl Scouts have gotten in to the act.
Yes, that’s right – the Girl Scouts.
Every year after they are through going door to door, local Girl Scouts sell their famed cookies directly to consumers in front of the three chains’ locations. However, this year, because of the strike, the Scouts may not be at Vons, Ralphs or Albertsons – opting instead for higher volume, non-strike locations such as Stater Bros., the only chain in the region not affected by the strike, The Press Enterprise reported recently.
"We are hoping the strike will be over by March" in time for the sale, Kathy Knox of the Inland area's San Gorgonio Council told the newspaper.
Meanwhile, officials at Safeway, which several times has taken the lead in speaking for the three grocery chains, were quick to respond to the attorney general’s suit.
Noting that the stores and the unions agreed to negotiate on a “multi-employer bargaining group basis,” store officials said in a statement that “the employers entered into this agreement to protect themselves in the event the unions engaged in tactics designed to drive a wedge between the employers by causing disproportionate losses to one employer.”
Lockyer’s contention “that this agreement has caused prices to rise and consumers to be harmed is simply wrong,” the statement said. In addition, “Courts have held that similar agreements are proper under federal labor policy and not subject to claims of antitrust violations.”
The strike, which centers on health care benefits, started Oct. 21 and covers more than 800 Southern California stores operated by the three companies, which make up roughly 60 percent of all groceries in the southern half of the state. More than 70,000 workers are taking part. It has dragged on despite numerous attempts to end it.
The last was a round of secret negotiations between union officials and representatives of Vons, Albertsons and Ralphs that occurred earlier this month. Unlike previous gatherings, this one did not include a federal mediator. However, like others, it ended with no settlement.
Several other labor actions, some targeting the same corporations as the California strike, were either averted, or started and were settled since the California strike began.
--by Mark H. Reddig, associate editor
Mark Reddig can be reached at mark_reddig@landlinemag.com.
