Despite the failed merger, grocery giants Kroger and Albertson’s still face claims of violating no-poach laws in Colorado.
A class-action lawsuit filed by United Food and Commercial Workers Local 7 on behalf of 18,000 grocery workers in Colorado alleges Kroger and Albertsons breached state no-poach laws during a 2022 King Soopers worker strike in Denver.
The claims follow allegations made earlier this year by Colorado Attorney General Phil Weiser, who filed an antitrust lawsuit to block the grocery giants’ proposed $24.6 billion merger and seek $1 million in penalties for breaching non-poach and non-solicitation agreements.
The lawsuits assert that during the 10-day strike, Kroger and Albertsons agreed not to hire each other’s employees and that Albertsons refrained from soliciting pharmacy customers from King Soopers, which is owned by Kroger. Both companies have denied these accusations.
“In addition to challenging this merger, we are also suing the two companies for a no-poach agreement that harmed workers and blatantly violated antitrust law,” Weiser said in February. “No-poach agreements stifle worker mobility and depress wages, and non-solicitation agreements harm consumers and raise prices.”
In a late-November press release, UFCW Local 7 said that Valarie Morgan, a veteran grocery employee who participated in contract negotiations in 2021 and 2022, is the lead plaintiff in a class-action lawsuit filed by the public-interest law firm Towards Justice.
While the state’s case against Kroger and Albertsons focuses on imposing penalties for alleged violations, the union’s lawsuit seeks to recover lost wages and other economic benefits that workers might have gained if not for the alleged unlawful agreements between the two grocers.
“This case is an attempt to bring light and justice to the 18,000 unionized grocery store workers, and the thousands of non-union grocery store workers, who were harmed by this hidden and illegal deal between King Soopers, City Market, and Safeway parent companies Kroger and Albertsons,” Kim Cordova, president of UFCW Local 7, said in the press release. “Our members went on strike and won a major new contract, but now it has become clear we could have made even more gains if these corporations had not broken the law behind our backs.”
Neither Kroger nor Albertsons could be immediately reached for comment on the lawsuit, but the two grocery chains released a joint statement in February denying the allegations.
“It is disheartening for Coloradans that General Weiser would mischaracterize the facts because there was not then, and there is not now, non-solicitation or so-called no-poach agreements between Kroger and Albertsons. Employees at both companies regularly join our teams from—and exit our companies for opportunities to work at – Albertsons, Kroger, Walmart, Amazon, Costco, and other retailers as well as restaurants, food service companies, convenience stores, warehouses, and more,” the companies said.
The long-pending merger of Kroger and Albertsons was blocked in December by judges in Washington and Portland, Oregon, where they were sued over the merger attempt. Immediately following the rulings, the grocery giants called off the proposed deal and Albertsons sued Kroger in the Delaware Court of Chancery.
Senior Assistant Attorney General Arthur Biller voiced skepticism about the possibility of Colorado reaching a swift settlement in the case, citing a prior discussion with Kroger’s trial attorney, Matthew Wolf. “We heard very early on in this case from Mr. Wolf that if count one was dismissed, they’d be able to settle count two in 15 minutes, and more than 15 minutes have passed,” Biller said. “Respectfully we would urge the court to continue its work on a ruling and issue a ruling when ready, notwithstanding these extracurricular events going on between Kroger and Albertsons.”
However, Second Judicial District Judge Andrew Luxen emphasized his responsibility to address the jurisdictional questions and mootness issues raised in the state’s case before making a decision on the state’s initial claims.
“I need briefing on jurisdictional issues that have been identified based on events over the last couple of days,” Luxen, an appointee of Democratic Governor Jared Polis, said following the collapse of the merger.
A hearing took place remotely via WebEx and was streamed live for public access on the state’s website. Both parties are expected to file briefs after the holidays, with Judge Luxen’s ruling to follow thereafter.
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