California Grocers Association Sues Irvine, Santa Ana Over ‘Hero Pay’

March 19, 2021 Updated: March 21, 2021

The cities of Santa Ana and Irvine are being sued over recently approved ordinances to hike the hourly wages of grocery and pharmacy workers during the pandemic.

The California Grocers Association (CGA) filed the lawsuit on March 17 at the Orange County Superior Court and seeks to declare the ordinances invalid and unconstitutional by singling out grocers and ignoring other frontline workers.

Irvine became the first city in Orange County to approve the “hero pay” in February, with its ordinance to take effect on March 25.

Santa Ana became the county’s first city to implement the measure after passing an urgency ordinance that took immediate effect on March 2.

In both cities, grocery workers—and some pharmacy workers—will receive an extra $4 per hour in hazard pay for 120 days.

CGA President Rob Fong said the mandates will hurt both customers and workers.

“A $4 per hour mandate amounts to a 28 percent average increase in labor costs for grocery stores,” Fong said in a March 17 statement. “That is too big a cost increase for any grocery retailer to absorb without consequence. Options are few. Either pass the costs to customers, cut employee or store hours, or close. Already five stores in Los Angeles County have closed after extra-pay mandates were enacted.”

Irvine’s ordinance requires big box retailers, grocery stores, and pharmacies—including Ralphs, Food 4 Less, Target, Walmart, CVS, and Rite-Aid—to comply with the mandate.

Councilmembers React

Irvine councilmember Larry Agran said he does not agree with the CGA’s claim that the city is being selective toward certain frontline workers.

Nevertheless, he said he was not surprised by the lawsuit.

“This was always of course a possibility,” he told The Epoch Times March 19. “They more or less threatened to sue in the run-up to the city’s adoption of the ordinance.

“My belief is that the city does have the legal authority to enact premium pay for those who are at risk on the frontlines in the COVID pandemic.”

Agran said that hero pay only applies to large corporations that are profiting from the pandemic.

“We’re not talking about corner grocery stores, employing just a few people,” he said. “We’re talking about multibillion-dollar corporations that have these massive stores, and are indeed getting a windfall in terms of revenue and profit during the course of this pandemic.

“It seems to me those who are on the frontlines—of their own health and even their lives at risk—are entitled to mandated premium pay.”

Santa Ana passed a similar ordinance that took immediate effect on March 2.

Santa Ana Councilmember Nelida Mendoza was among the dissenting votes for her city’s hero pay measure.

“I did not want to expose Santa Ana to a potential lawsuit, which is exactly what happened,” Mendoza told The Epoch Times via email.

“This is a state and federal issue, not for local government. Grocery and pharmacy employees are not the only essential workers.”

Mendoza said she opposed the measure because she wanted to “protect our businesses, our essential workers, and the great City of Santa Ana.”

“Many grocers already provided bonuses, PPE, paid leave, and other benefits without being mandated. [The] mandate is detrimental to employers, employees and ultimately the cost is handed down to consumers. The cost to employers increases. Thus, may cause employee layoffs,” she said.

The CGA, representing more than 300 retailers, has been battling against hero pay mandates since they arose. It claims the mandates violate the National Labor Relations Act and equal-protection clauses.

It has filed lawsuits against Long Beach, Montebello, Oakland, San Leandro, West Hollywood, Daly City, and San Jose.

“Grocery store workers are front-line heroes, and that’s why grocers have already undertaken a massive effort to institute measures to make both workers and customers safer in stores,” Fong said.

“Firefighters, police officers, health care workers, as well as transportation, sanitation, and restaurant workers, are essential, yet grocers are the only businesses being targeted for extra pay mandates. These ordinances will not make workers any safer.”

The CGA said local officials have ignored the losses that grocers have incurred as a result of the pandemic, such as low profit margins and significant operational costs.

The grocery outlet Kroger recently announced the closing of two Ralphs locations and one Food 4 Less in Los Angeles as a result of the ordinances.

According to Kroger, the mandate will cost an additional $20 million in operating costs over the 120 days after it is set to go into effect, making those stores financially unsustainable. The stores are set to close on May 15.