Wednesday, May 08, 2024

MONOPOLY CAPITALI$M

BLOOMBERG EXCLUSIVE

Unions, Advocates Urge DOJ Criminal Probe of Kroger, Albertsons


An Albertsons sign on a store in Littleton, Colo.
Photographer: Matthew Staver /Bloomberg News.

May 8, 2024

Danielle Kaye
Reporter

Documents
Letter

FTC lawsuits revealed potentially illegal collusion

Letter to DOJ urges criminal investigation of grocery giants

The US Justice Department should investigate whether Kroger Co. and Albertsons Cos. engaged in illegal collusion, unions and advocates say, citing evidence unearthed in recent lawsuits seeking to block the grocery giants’ proposed merger.

The US Federal Trade Commission and a group of states sued the companies in federal court in February to thwart their $24.6 billion tie-up, on the heels of a similar lawsuit filed by Colorado’s attorney general in state court. Both complaints cite communications indicating that the two grocers have relied on non-solicitation agreements and pacts not to poach each other’s workers and customers—evidence that advocates and labor groups argue warrants a criminal investigation by federal antitrust enforcers.

“Crucially, overt violations like price-fixing via non-solicitation agreements, as well as wage-fixing via no-poach agreements, carry potential criminal penalties,” anti-monopoly group the American Economic Liberties Project and a coalition of seven United Food and Commercial Workers local unions said in their letter to the DOJ on Wednesday.

In its suit to block what would be the biggest US grocery deal in history, Colorado alleged Kroger and Albertsons agreed not to poach each other’s workers during a 2022 strike by Kroger employees. Colorado Attorney General Phil Weiser also said the companies entered into a non-solicitation agreement to avoid persuading pharmacy customers to switch between the two.

UFCW Local 7, which represents workers at grocery stores in Colorado and signed onto the letter to the DOJ, filed an unfair labor practice charge with the National Labor Relations Board one day after Weiser’s lawsuit revealed the alleged agreement between the companies not to hire each other’s employees.

A Kroger spokesperson denied allegations of no-poach and non-solicitation agreements with Albertsons, adding that employees “regularly” move between the two companies as well as other competing retailers.

The DOJ brought its first criminal trials on alleged labor market violations in 2022 as part of a broader push by federal enforcers to increase scrutiny of antitrust violations that harm workers. The Antitrust Division under the Biden administration has ramped up enforcement actions related to no-hire or no-poach agreements, which the DOJ has argued are inherently illegal.

The no-poach allegations brought forth in the FTC and Colorado lawsuits over the Kroger-Albertons merger would, if true, represent per se violations of Section 1 of the Sherman Act, the groups argued in their letter to Attorney General Merrick Garland and DOJ antitrust chief Jonathan Kanter.

A preliminary injunction hearing in the Colorado lawsuit is scheduled for mid-August in Colorado court, just before the FTC’s suit goes to trial in Oregon federal court.


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