Kroger & Albertsons Have Been Sued for Collusion Against the Worker’s Union. Here Are the Details.

Kroger and Albertsons are back in the spotlight for all the wrong reasons. The supermarkets, which are looking to engage in a much-contested merger, have been sued for collusion against the worker’s union. Let’s take a look at the details of this latest controversy.

Kroger & Albertsons May Be Subjected to a Class-Action Lawsuit

According to The Huffington Post, a grocery store employee accused Kroger and Albertsons of conspiring against striking workers in order to maintain low wages and benefits in a proposed class-action complaint filed in Colorado state court.

During a 2022 work stoppage, Valarie Morgan, who works at a King Soopers store owned by Kroger, claims the two rivals came to an illegal agreement not to steal workers or customers. She asserts that by doing this, the supermarket gained leverage over the union representing its workers during contract negotiations.

Morgan claims that this led to the employees receiving a poorer deal than they should have.

Since the conditions of the Kroger agreement would affect the contracts Albertsons would subsequently negotiate with the same union, the lawsuit claims that this ultimately benefited Albertsons as well.

“The anticompetitive agreement was successful,” she alleges. “It artificially reduced the union’s bargaining power during negotiations, while increasing the leverage of Kroger’s management. These companies rigged the system against us, undermining our right to fight for better pay and fair treatment through our unions.”

Albertsons did not respond to a request for comment from The Huffington Post, but Kroger flat-out denied the allegations in a statement, claiming that there were never any no-poach or non-compete agreements between the two supermarkets. But prior to the King Soopers strike that affected 78 stores and engaged thousands of workers, Colorado’s attorney general filed a lawsuit earlier this year with similar claims, citing emails between officials from the two supermarkets.

A Hotly Contested Merger

Meanwhile, last month, at a Stop the Merger Rally, grocery shop employees, union officials, and neighbors held picket signs. Among the prominent local labor organizations that took part in the march was the Rocky Mountain Farmers Union. According to Tyler Garrett, the union’s director of government relations, his group has members in Colorado, New Mexico, and Wyoming.

“This [Kroger-Albertsons merger] would harm our family farmers and ranchers by taking away any power they had to negotiate prices,” Garrett said to CPR. “Right now, farmers and ranchers only get approximately $0.14 to $0.30 of the dollar that consumers spend on groceries. Do you know who gets the rest of that money? The big corporations like Kroger and Albertsons, and they don’t pass that on to consumers or to their workers.”

The combination “would result in higher food prices, potential worker mistreatment, food deserts, and negative impacts for suppliers,” said Colorado Attorney General Phil Weiser.

Weiser’s concerns are shared by Colorado Springs-based Kroger employee Rickee Nelson. “[Kroger and Albertsons are] showing record-breaking profits, but we don’t see that,” Nelson said to the outlet. “We as the workers, we don’t get to reap the benefits of our hard work and that hurts.”

The FTC, which had previously rejected the merger on the grounds of less competition and potential price increases, launched a lawsuit to stop the two retailers from merging. Although this increased divestment strategy has generated hope, regulatory approval is still pending.

“I have deep concerns when I look forward about our competitive condition,” said Vivek Sankaran, CEO of Albertsons. “If you don’t fundamentally change your competitive condition as you look out two, three, four years, your financial condition will deteriorate. I’m losing more of our customers’ dollars to Costco and Walmart than to Kroger.”

Earlier this year, Kroger and Albertsons decided to divest additional shops to allay regulatory concerns about their merger. All Safeway stores in Arizona, where Albertsons owns and operates 105 locations, are largely impacted by this decision, which was made public in April.