Grocers Give Pact to Lockyer

The three supermarket companies engaged in an 10-week-old labor dispute surrendered a copy of their controversial mutual-aid pact to California Atty. Gen. William Lockyer late Tuesday just as Lockyer’s lawyers filed suit to gain the document, officials said.

Lockyer is investigating the pact on antitrust grounds, and had subpoenaed a copy from Albertsons Inc., Ralphs parent Kroger Co. and Safeway Inc., which owns Vons and Pavilions.

The companies were given until Monday to tell Lockyer whether they planned to comply with the subpoena, and then were supposed to hand over a copy of the agreement by 4 p.m. Tuesday, said Lockyer spokesman Nathan Barankin.

After that deadline came and went, Lockyer’s lawyers filed suit in Los Angeles County Superior Court seeking to force the chains to produce the document, Barankin said. In the meantime, the stores provided a copy, he said, adding that the suit would be withdrawn.

Lockyer’s office declined to release details of the agreement, which it will study as part of its probe.

“The grocery companies’ revenue-sharing agreement was drafted in complete secrecy in the privacy of their corporate boardrooms, and until today we have only had their word that it is legal,” Lockyer said in a statement. He said he wanted to ensure that the pact “complies with the law and does not harm consumers.”

An Albertsons spokeswoman declined to comment; representatives of the two other chains could not be immediately reached for comment.

The supermarkets have acknowledged that a pact to share revenue exists and contend that it’s legal, but have refused to provide additional details.

Safeway was struck by the United Food and Commercial Workers union Oct. 11, and the next day Albertsons and Safeway locked out their union workers. About 70,000 employees have been idled at 852 grocery stores in Southern and Central California.

“It sounds like the employers are treating the attorney general no differently than they’re treating their employees,” said Ellen Anreder, a spokeswoman for six of the seven UFCW locals involved in the dispute. “If [the agreement is] so lawful, as the stores said earlier, why did they try to call the attorney general’s bluff?”

The chains are bargaining jointly with the UFCW, and as part of that agreement they devised the mutual-aid pact. It effectively says that if one company gains a windfall in business during the dispute, that chain will share a portion of those extra dollars with the other two firms, the companies have said.

A windfall for one company indeed materialized. On Oct. 31, the UFCW removed its pickets from Ralphs stores to focus pressure on Albertsons, Vons and Pavilions. Many shoppers who supported the picket lines then migrated to Ralphs, giving the chain a boost of extra sales.

Antitrust experts have been divided about the arrangement. Some said they couldn’t recall a similar financial-aid agreement among other companies simultaneously hit by a strike and lockout.

Others said the grocers’ pact might be legal on grounds that collective-bargaining statutes and other labor laws outweigh any antitrust concerns.

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On February 12, 2004 the United Food and Commercial Workers Union, which had stated repeatedly that 70,000 workers were involved in the supermarket labor dispute in Central and Southern California, said that the number of people on strike or locked out was actually 59,000. A union spokeswoman, Barbara Maynard, said that 70,000 UFCW members were, in fact, covered by the labor contract with supermarkets that expired last year. But 11,000 of them worked for Stater Bros. Holdings Inc., Arden Group Inc.’s Gelson’s and other regional grocery companies and were still on the job. (See: “UFCW Revises Number of Workers in Labor Dispute,” Los Angeles Times, February 13, 2004, Business C-11)

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