Federal Law May Allow Grocers' Profit Pact

LOS ANGELES - Safeway Inc., Kroger Co. and Albertsons Inc. may still be permitted to have a profit-sharing agreement, even if a California Attorney General probe determines that it is anticompetitive, according to a Dow Jones report.

Historically, federal court decisions have exempted multi-employer groups from antitrust laws when they were engaged in collective bargaining with a single union.

That means that for the three grocers, an agreement to share profits and revenues as 70,000 workers of the United Food and Commercial Workers picket in Southern California might also be exempt due to their collective bargaining status.

For labor disputes, federal laws usually outweigh state laws, but for antitrust cases, state laws typically override federal laws, the report notes.

In a press release Monday, California Attorney General Bill Lockyer said his office has subpoenaed details of grocers' original agreement to determine whether their pact could violate state laws, including section 17200 of the California Business and Professional Code, which governs unfair competition.

So far, the grocery chains have confirmed only the existence of a pact, but haven't given any specifics.

Details of the agreement, which are likely to be made public at some point in Lockyer's investigation, could ultimately determine whether the pact is anticompetitive, and whether it's exempt from antitrust laws during the collective bargaining process.
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