SAN FRANCISCO — The three major chains in Southern California violated anti-competition laws in 2003 by signing a mutual strike assistance agreement during a labor dispute, according to a ruling this week by the Ninth Circuit Court of Appeals here.
The chains — Supervalu-owned Albertsons, which was independently owned at the time; Kroger-owned Ralphs and Safeway-owned Vons — had contended the agreement was permissiable under the collective bargaining process. However, the court ruled the agreement fell under the Sherman Act regulating interstate trade and commerce, though it stopped short of ruling on whether or not the revenue-sharing arragement was legal.
The agreement was made in 2003, shortly before seven locals of the United Food and Commercial Workers Union launched a 141-day strike against Vons over the issue of health care benefits.
Under the agreement, the three companies said they would share revenues if any one of them was selected as the union's strike target. The state of California filed suit in 2004, charging the agreement was anti-competitive and not covered by a collective bargaining exemption to the law because Kroger-owned Food 4 Less was a party to the revenue-sharing agreement, although it was not involved in the labor dispute.
The court said Tuesday the revenue-sharing agreement concerned the "business" or "product" market but not the labor market and therefore was not immune from antitrust provisions.