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Federal Judge Mulls California City’s Hourly Hazard Pay Law (1)

Feb. 23, 2021, 9:03 PM; Updated: Feb. 23, 2021, 10:31 PM

A California Grocers Association bid to block a city of Long Beach law requiring their members to pay workers an extra $4 an hour during the coronavirus pandemic is now in the hands of a federal judge.

U.S. District Judge Otis Wright said his decision ”will follow very shortly,” after 90 minutes of argument in Los Angeles federal court on Tuesday. “We are in uncharted waters,” he said.

The association contends the Long Beach law unreasonably singles out specific employees for additional pay while ignoring workers outside the grocery industry. The ordinance, effective for 120 days, covers employers with 300 or more workers in stores that have 70% of their square footage devoted to grocery sales.

“What I have seen of the ordinance, it doesn’t tie that 120 days into ascertainable benchmark like number of new cases in Los Angeles County or city of Long Beach, something that is pegged to the pandemic so this doesn’t go on forever,” the judge said.

But, he added, “if that ordinance has a rational basis for accomplishing a legitimate municipal purpose, that’s as far as I need to go now.”

The grocers sued on Jan. 20, one day after the city passed its law. The trade group argues Long Beach violated the U.S. and California constitutions in adopting the measure, contending it’s preempted by federal labor law governing contract negotiations between employers and unions.

Six cities including Seattle, Oakland, Calif., and West Hollywood, Calif., also have adopted pandemic pay laws, with some also facing litigation challenging the measures. At least 14 other California cities are considering such laws. Hours after the court hearing on Tuesday, San Jose and Los Angeles County adopted hourly hazard pay legislation for $3 and $5, respectively.

The grocers association, whose members include Albertsons Cos., Costco Wholesale Corp., and Whole Foods Market Inc., want Wright to block enforcement of the law, asserting it will increase store costs by 28%. Retailers such as Target Corp., Walmart Inc., and others that sell food in addition to other products aren’t covered by the measure and thus are treated differently.

“These workers are in the same position—they’re at work. They’re interacting with the public. There’s no reasonable basis to say that a Target worker is not exposed to a hazard and Ralph’s is,” grocers’ attorney William Tarantino of Morrison & Foerster told the court.

The ordinance also doesn’t permit reducing other compensation and “prevents the employer and employees from engaging in any form of collective bargaining,” Tarantino said.

Temporary Measure

Attorneys for the city and the United Food and Commercial Workers Union counter that Long Beach is using its police powers to enact what they said was a modest, temporary emergency measure to protect workers.

“Supermarket workers when they got their job before the pandemic, they weren’t signing on to that kind of risk. This ordinance just recognizes that and requires that they be compensated fairly for it,” said Christopher Pisano, an attorney with Best, Best & Krieger LLP representing Long Beach.

The U.S. Court of Appeals for the Ninth Circuit has made it clear that any reasoning about a law being too onerous or applies only to certain workers is incompatible with Supreme Court precedent, said Paul More, an attorney with McCracken, Stemerman & Holsberry LLP representing the UFCW.

That argument has been raised and rejected repeatedly “and yet it’s being raised again in this case,” More said, adding that nothing precludes bargaining.

Tarantino noted the law could be extended past the 120-day expiration date under the emergency ordinance or past the UFCW contract expiration date in March 2022.

The case is Calif. Grocers Assoc. v. Long Beach, C.D. Cal., No. 2:21-cv-00524, preliminary injunction hearing 2/23/21.

(Updated with votes in Los Angeles County and San Jose in seventh paragraph.)

To contact the reporter on this story: Joyce E. Cutler in San Francisco at jcutler@bloomberglaw.com

To contact the editors responsible for this story: Andrew Harris at aharris@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com

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