Retailers

‘Another Blow’ to Indies in Seattle Hazard Pay Lawsuit

Court upholds city ordinance requiring some grocers to offer extra wages
Photograph: Shutterstock

The U.S. District Court for the Western District of Washington on March 18 upheld ordinances in the cities of Seattle and Burien requiring some grocers to pay “hazard pay” of an additional $4 to $5 per hour to their grocery workers. The ordinances had been challenged in court as unfair and illegal by the Northwest Grocery Association (NWGA) and the Washington Food Industry Association (WFIA).

U.S. District Court Judge John Coughenour denied the grocery associations’ request for a preliminary injunction in the case and granted the city of Seattle’s motion to dismiss the case. NWGA and WFIA are reviewing the decision and considering their next steps, which could include an appeal to the Ninth Circuit.  

“We are disappointed that the court has decided against the arguments in our lawsuit,” said Amanda Dalton, NWGA president, in a statement. “We still feel strongly that our arguments had merit and that these ordinances are unfair and do nothing to protect workers from COVID-19. Unfortunately, they set a very damaging precedent for similar unfair application of wage laws in the future.” 

“Today’s ruling represents another blow to the independent grocery store operators who continue to operate on the thinnest of margins during the COVID-19 pandemic,” said Tammie Hetrick, WFIA president and CEO, in a release. “These pay mandates do not consider the differences within our industry. Our members have invested millions into safety measures for their employees and customers, while also providing additional pay and other bonuses. But that appears to be lost in this debate over wages—not safety.”  

Like Seattle-based PCC Community Markets, whose CEO Suzy Monford “respectfully requested” local government reconsider the hazard pay ordinance in a letter to Seattle’s mayor last month, the WFIA and the NWGA note the slim profit margins on which independent grocers operate make paying extra wages unsustainable.  

“This ordinance disproportionately harms local, independent grocers like PCC Community Markets, which in 2019 had $1.7 million in net income. That may sound like a lot, but to put that in context, PCC spent $3 million—or nearly [twice] 2019 net income—in COVID-related expenses in 2020, including staff member appreciation pay, bonuses and in-store safety protocols, since the start of the pandemic,” wrote Monford in the letter shared with WGB in February.

The grocery industry has invested billions in safety measures and additional compensation its workforce since the beginning of the pandemic, NWGA said. Safety measures have protected consumers and grocery workers, as grocery stores have not been identified by any health department as major vectors of virus transmission. In fact, the Washington Department of Health reports that grocery stores make up only 6% of the reported non-healthcare setting COVID-19 outbreak events and only 3.2% of all outbreak events in the state.  

“Now that grocery workers are prioritized for vaccination, we should all be focused on making sure all grocery workers who want the vaccine are able to get it,” said Hetrick. “The state’s own data shows that grocery stores are not hazardous, and our workers will soon be vaccinated.  Now is not the time to enact hazard pay ordinances.  We encourage those cities that have approved hazard pay, to review and remove these ordinances in light of vaccine distribution and evidence on the safety of the grocery store environment.”  

PCC Community Markets and The Kroger Co. have also made a case for prioritizing the vaccination of its workers over additional pay in a market that already offers a higher-than-average hourly wage.

Last month Kroger said the extra pay mandate that requires certain employers to provide extra pay for some, but not all, front-line workers in Seattle, had accelerated the closures of two “underperforming” Quality Food Centers (QFC) in the area. Kroger had previously announced store closures due to hazard pay increases in a number of counties in California that have passed similar ordinances.

The extra pay mandate, Kroger said, would impose a 22% operating cost increase on some employers in Seattle. QFC’s average hourly wage in Seattle is about $20 an hour and total compensation is over $25 an hour, including healthcare and pension benefits, the company said.

“Kroger is taking an aggressive stance” and sending a “not too subtle message” by closing stores in Long Beach and now Seattle, a grocery industry executive operating on the West Coast told WGB at the time. “Kroger is making a statement that this hazard pay is going to come with consequences.”

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