Proposed Legislation Would Provide Grocery Workers with Economic Security After Layoffs

In April, the United Food and Commercial Workers (UFCW) Western States Council applauded the Senate Labor, Public Employment and Retirement Committee for passing SB 725 (Smallwood-Cuevas), the Grocery Worker Safety Net, which requires a grocery establishment who conducts layoffs as a result of a merger or acquisition to provide workers with one-week severance pay for every year of service.

“When Albertsons merged with Safeway in 2015 and a third-party grocery store, Haggen, came in and bought up some Albertsons stores, I was suddenly faced with looking for a new job when the company went under,” said Michael Bott, a Produce Manager at Vons in Santa Barbara and a member of UFCW Local 770. “Luckily, I was hired on as a Produce Clerk at Vons. Even though that meant a demotion from my previous position as a Produce Manager which took seven years to get, I was one of the fortunate ones; others with less seniority didn’t have that opportunity. If SB 725 had been law at the time, it would have helped my family and coworkers by providing economic security during a very uncertain time. It would have lessened the mental anxiety we face after a merger or acquisition by just knowing that we don’t have to worry about our children losing the roof over their heads or going hungry.”

In October 2022, it was announced that Kroger and Albertsons would pursue a $24.6 billion mega-merger, joining together two of the largest grocery chains in the United States. Nationally, these two grocery chains employ over 700,000 workers and operate over 50 manufacturing facilities and 5,000 retail stores. California has more of these two grocery chains than any other state in the country, with Kroger operating approximately 233 stores under the Ralphs, Food 4 Less and Foods Co banners and Albertsons operating approximately 579 grocery stores under the Albertsons, Safeway, Vons and Pavilions banners.

In Los Angeles and Orange Counties, 115 of 159 Albertsons stores are within two miles of a Kroger store and are potential targets of closures by the Federal Trade Commission. This could result in an estimated 5,750 jobs being lost in the Los Angeles region alone. It’s clear that a merger between these two companies will result in large scale layoffs for workers and without severance pay protections, the loss of this many jobs in one region will have ripple effects through the local economy and further burden an already tattered social safety net.

“SB 725 is absolutely critical for workers facing layoffs because of mergers and acquisitions so they can know how they’re going to be able to feed their family in the stressful time they are without a job,” said UFCW 770 President, Kathy Finn. “By providing one week of severance pay per year of service to workers who are already living paycheck to paycheck, California can prevent community harmful events like mass evictions, the inability to spend money locally, and vehicles being repossessed.