KROGER IN COURT: The Merger's Impact on Grocery Workers
The court battle between the FTC and The Kroger Co. continued on Wednesday as the grocer made its case for why union employees would retain their bargaining power under its proposed merger with Albertsons Cos. Kroger VP of Labor Relations Jon McPherson, President of United Food and Commercial Workers (UFCW) Local 555 Dan Clay, President of UFCW Local 324 Andrea Zinder and President of Kroger’s Ralphs division Tom Schwilke all took the stand before District Judge Adrienne Nelson in Oregon.
For its part, Kroger maintains that the FTC’s argument that the merger will decrease the bargaining leverage of unions is unprecedented, and that prior to this case, no plaintiff has ever sought to block a merger under the Clayton Act for that reason. According to Kroger, both text and precedent make clear that the antitrust laws have no place in labor relations.
Additionally, a spokesperson for Kroger shared that the company believes “the government’s theories of how the deal will reduce unions’ ability to use whipsaw strike tactics between Kroger and Albertsons are detached from the realities of labor negotiations and do not reflect the competitive landscape of today.”
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According to reporting from the American Economic Liberties Project, Zinder shared with the court that she has concerns about the takeover of Albertsons stores by C&S Wholesale Grocers following her negative experience with Albertsons’ 2015 merger with Safeway. Further, Zinder testified that "senior workers likely could not be persuaded to stay in any stores that are divested to C&S due to their 'very strong memory' of the 'horrible experience' that resulted from Albertsons’ failed divestiture to Haggen."
The legal discussion on Wednesday was reflected by the reality outside the courtroom as union workers at Fred Meyer stores in the Portland area went on strike barring a deal with the Kroger-owned retailer. Following seven days of talks, union members are planning to strike through the Labor Day holiday.
“A ULP strike is crucial to force Fred Meyer to comply with their obligations as an employer to their employees,” said Clay. “Our members are united in demanding fair treatment, which can only be reached if Fred Meyer actually stands behind its public statements and is willing to fulfill all their obligations and legal requirements. Our membership came out in overwhelming support of this action and the community has our back.”
Fred Meyer, for its part, released a statement supporting its workers’ right to collectively bargain while outlining what it deems a generous offer. “The company believes associates should have a voice in choosing what is right for them and their families because the bargaining process ultimately impacts their paychecks. From the beginning it has always been our goal to put more money in our associates’ pockets,” the retailer asserted.
While Northwest-based UFCW Local 555 voiced its support for the proposed merger as of February, it changed course earlier this month amid labor negotiations and came out in opposition to the merger.
Earlier this week, Kroger Chief People Officer Tim Massa reiterated that the merger will lead to “lower prices for more customers, higher wages for associates, and expanded food access in more communities.”
Continued Massa: “Our merger will secure the long-term future of union jobs by building on Kroger’s track record of adding 100,000 union jobs since 2012 while union membership in the grocery industry was declining by hundreds of thousands of members. Kroger, Albertsons and C&S are committed to honoring all current collective bargaining agreements alongside bargained-for wages and benefits and ensuring zero frontline worker layoffs and no store closures as a result of the merger.”
The current hearing is expected to last three weeks, after which Judge Nelson will decide whether or not to grant the preliminary injunction against the proposed merger.
Cincinnati-based Kroger is No. 4 on The PG 100, Progressive Grocer’s 2024 list of the top food and consumables retailers in North America. View company website. Boise, Idaho-based Albertsons is No. 9 on The PG 100. View company website. PG also named Kroger and Albertsons among the Retailers of the Century. Keene, N.H.-based C&S is No. 18 on PG’s list.
