It seemed so simple at the time: Two big grocery companies (Albertsons and Safeway) merge and are forced to divest scores of their stores; a small Bellingham-based grocery company with money and ambition (Haggen) decides to grow by buying some of the divested properties; they all sign a contract.
A few months later, Alberstons sues Haggen for failing to pay for inventory and claims that Haggen’s behavior was “fraudulent in nature and done with malice.”
Haggen responds with a $1 billion lawsuit claiming various financial shenanigans. Haggen, in the meantime, decides to close some of its 146 new stores, and the company lays off some employees.
Amid the legal wrangling, former employees from Haggen stores may find it challenging to get hired at local Safeways or Albertsons.
Welcome to the world of mixed signals and unintended consequences.
United Food & Commercial Workers Local 367 represents retail workers in Pierce, Thurston, Mason, Lewis, Grays Harbor and Pacific counties.
Nathe Lawver, Local 367 communications director, said this week that the “noncompete” language in store sales agreements with Haggen is “one of those unfortunate things” that happen when companies “play the corporate consolidation game. From what I understand, part of the agreement was that (employees) would not be able to transfer to Albertsons or Safeway.
“This is as much of a shock to us as it is to our members,” he said. “I have to say we didn’t see that coming. We have talked with our attorney and people who work on these things. We’d like to see that these people can maintain their jobs.”
He urged laid-off union members to contact their representatives.
“This is really fresh,” he said. “If this happens, or they see this, they should reach out to us to see what we might be able to do. I would think there are some contractual processes where we might be able to help out.”
“I don’t think that these noncompetes would be enforceable,” said Seattle attorney and labor law expert Noah Williams of the firm of Reed Longyear.
“The courts generally don’t like to prevent people from earning a living,” he said.
Noncompete agreements typically focus on “specialized skill sets that would be an advantage to the competitor. Usually it’s in the tech industry,” said Alexandra Filutowski, a Seattle attorney with experience in labor law.
If a company predicted an economic threat from a former employee working for a competitor, Filutowski asks, “what economic threat do these workers pose?”
Three bills were introduced into the latest session of the Legislature aimed at restricting noncompete agreements.
One, House Bill 1577, stated that “the Legislature intends to make noncompetition agreements for low-wage positions unenforceable and create a presumption that a restriction period of more than six months is unreasonable.”
All three measures ended the session “retained in present status,” which means they are essentially in deep sleep.
Haggen spokeswoman Deborah Pleva responded to News Tribune inquiries this week with an email stating: “Haggen associates may seek employment anywhere they choose.”
Asked if those employees may accept employment offers without fear of legal action, Pleva responded, “I can’t provide additional details beyond that statement.”
Safeway spokeswoman Sara Osborne responded Friday: “Under the terms of the (Federal Trade Commission) consent decree and the asset sale agreement, we can consider rehiring employees after Haggen has laid them off, either during the normal course of business or following a store closure.”
Still in question is the right of a currently employed Haggen worker to seek and accept employment with an Albertsons store or subsidiary, including Safeway.
Concerning a question about a California lawsuit from a former employee who claimed that Haggen was charging higher prices for items at the register than were listed for those items on the grocery aisles, Pleva responded, “Haggen was disappointed to learn about this lawsuit and is confident it has absolutely no merit.”
C.R. Roberts: 253-597-8535