Colorado Kroger, Albertsons stores pursue illegal no-poaching agreements, lawsuit claims | Business

Two of the nation’s largest grocery retail companies are the subject of a new class-action lawsuit in Colorado that alleges they entered into illegal “no-poaching” agreements with each other during a union strike in 2022.

United Food and Commercial Workers Local 7 (UFCW) filed a lawsuit in Denver District Court on Monday against Kroger and Albertsons, alleging that King Soopers, City Market (Kroger) and Safeway (Albertsons) have agreed not to poach employees from each other.

The lawsuit seeks to recover lost or unsecured wages and other income from employees due to “unlawful agreements,” UCFW Local 7 officials said in a news release.

Non-solicitation agreements, whether oral or written, are illegal agreements between companies designed to not influence the hiring or employment decisions of the other company’s employees. Non-solicitation agreements sometimes reduce an employee’s compensation or limit employment opportunities.

UFCW Local 7 officials claim the non-solicitation agreements came about as the union participated in a 2022 strike against King Soopers over pay and safety. The nine-day strike resulted in new contract terms, including raises, better health care and safety protocols at all stores.

Valerie Morgan, who was on UFCW Local 7’s contract negotiation team at the time, is the lead plaintiff in the lawsuit. According to UFCW Local 7, public interest law firm Towards Justice filed the lawsuit.

“To counteract Local 7’s bargaining pressure during the strike, Kroger required Albertsons to enter into an unlawful agreement not to hire or poach employees from King Soopers or to solicit any of its pharmacy customers,” the lawsuit said, adding the anticompetitive agreement “Artificially reduced the union’s bargaining power during negotiations while increasing Kroger management’s influence.”

UCFW Local 7 officials allege that Kroger officials, fearing loss of sales during the strike, asked Albertsons not to hire any of its workers or solicit Kroger customers during the strike, particularly in its pharmacy departments.

The lawsuit detailed a January 9, 2022, email from Daniel Fügenbach, senior vice president of labor relations at Albertsons, to Jon McPherson, VP for labor & associate relations at Kroger.

In that email, Fügenbach told McPherson that Safeway stores do not plan to hire King Soopers employees during the strike.

Additionally, the lawsuit said Todd Broderick, president of Albertsons’ Denver division, confirmed the agreements in an email to Susan Morris, Albertsons’ chief operating officer, which allegedly stated, “We have agreed to this.” “Not to hire (King Soopers) employees and not to actively promote their pharmacy to customers.”

Kim Cordova, president of UFCW Local 7, said in a statement that the lawsuit has the potential to impact thousands of unionized grocery store workers.

“This case is an attempt to bring light and justice to the 18,000 union grocers and the thousands of non-union grocers who were harmed by this hidden and illegal deal between King Soopers, City Market and the Safeway parent companies.” Kroger and Albertsons,” she said in a press release announcing the lawsuit.

“Our members struck and won an important new contract, but it is now clear that we could have won even more if these companies had not broken the law behind our backs,” Cordova said.

Kroger’s merger with Albertsons remains in limbo, with three lawsuits pending over the proposed $24.6 billion merger. In the Colorado lawsuit, Attorney General Phil Weiser is seeking a $1 million civil penalty for allegedly illegal solicitation and non-solicitation agreements between Kroger and Albertsons over their employees and pharmacy prescriptions.

UFCW Local 7 has been an outspoken critic of the merger, claiming it would lead to store closures and job losses.

A King Soopers spokesman denied any non-solicitation agreements in an email to the Denver Gazette on Tuesday.

“There have been no non-solicitation or so-called no-poaching agreements between Kroger and Albertsons,” King Soopers spokeswoman Jessica Trowbridge said, adding that 1-2.5% of Kroger employees attend or move from Albertsons stores .

“Kroger competes for talent in a broad and diverse labor market, including non-grocery retailers, non-union retailers such as restaurants, food service companies, convenience companies, warehouses and more.”

The Denver Gazette also reached out to Albertsons officials for comment but had not received a response as of press time.

Denver Gazette business reporter Bernadette Berdychowski contributed to this report.