San Jose takes first step to boost pay for grocery store workers amid COVID-19

After hours of “awkward” debate that included the vice mayor and a councilmember getting booted from a meeting due to a conflict of interest, San Jose is moving forward with giving grocery store employees a pay boost during the pandemic.

The San Jose City Council voted 6-3 Tuesday to draft a measure that would require large grocery stores to pay their employees an extra $3 per hour in hazard pay.

The hazard pay applies only to grocery stores with 300 or more employees. The council could approve the ordinance as soon as Feb. 9. The pay bump would last until the county’s stay-at-home order lifts.

Mayor Sam Liccardo and Councilmembers Matt Mahan and Dev Davis opposed hazard pay without assessing potential unintended consequences, such as increased food prices for consumers. Mahan tried unsuccessfully to include such studies — an idea introduced by Vice Mayor Chappie Jones — into the plan, but his more progressive colleagues argued that would lead to “analysis paralysis” and grocers would predictably say the extra pay would put them out of business.

A last-minute conflict of interest

The path to approval Tuesday was a bumpy and unusual one.

Jones and Councilmember Pam Foley left the meeting after City Attorney Nora Frimann notified them of a conflict of interest because they both own stock in Amazon, which owns Whole Foods, a grocer subject to the new rules.

But the revelation came after Jones had already drafted a memo supporting studying hazard pay and both lawmakers participated in a robust discussion.

Councilmember Sylvia Arenas called it the “most awkward item in the four years I’ve been here.” She questioned why the pair did not recuse themselves sooner.

“There were councilmembers who knew ahead of time that there was conflict and we had a motion in place, a full memo in place,” she said. “I think this was meant to deter this kind of conversation.”

Liccardo quickly jumped to their defense, saying Jones and Foley did not know there was a conflict and warning Arenas not to “disparage” them. Jones and Foley are allies of the mayor.

“I’m not disparaging. Please do not put words in my mouth,” Arenas shot back.

It’s unclear why the so-called conflict of interest was not flagged sooner by the city attorney — instead of being revealed for the first time during a live council meeting.

Legal threats

Also looming over Tuesday’s discussion was the specter of a lawsuit over hazard pay.

Other cities, including Long Beach and Oakland, have raised pay for grocery workers, but Long Beach was sued by the California Grocers Association over the city’s $4 per hour hero pay mandate. The association said the wage bump was illegal because it interferes with the collective bargaining process.

Some worry San Jose will also be sued over its policy, and lawmakers will discuss the legal risks in closed session next week.

Already, the California Retailers Association is fighting against San Jose’s hazard pay. A representative from the association, who did not state his name, said the “one-size-fits-all” approach could unintentionally increase the cost of food and retail pharmacy drugs, which would disproportionality affect those hit hardest by the pandemic.

“A mandated pay increase beyond what retail employers can tolerate without raising prices or cutting workforce hours will hurt both consumers and our hardworking employees,” the spokesperson said. “This is the last thing our members want to do in the middle of a COVID-19 pandemic and economic crisis.”

Councilmember David Cohen said San Jose’s hazard pay policy should specify whether there will be pay differences between full-time and part-time employees. He said the ordinance should potentially allow for a bonus or salary increases, and asked that it apply to publicly traded companies and exclude franchises.

‘The right thing to do’

Jones feared San Jose could face closures in its low-income neighborhoods. Before she recused herself, Foley shared concerns about cuts to employee hours. She added that downtown San Jose is already lacking grocery stores and cannot afford more loss.

But Councilmember Sergio Jimenez said people need the help now and opposed taking more time to get workers paid. Union representatives and grocery store workers also called for urgent action.

John Nunes, president of United Food and Commercial Workers Local 5 — a union representing 25,000 grocery workers across Northern California — said workers should be compensated for the sacrifices they make to keep stores operating and residents fed.

“The work they provide is life threatening,” Nunes said. “Our union nationally has lost over 120 workers to this deadly disease. I applaud the San Jose City Council for acknowledging the health risks our neighborhood grocery workers and their families have been facing.”

Maria Noel Fernandez, director of organizing with Working Partnerships USA said, workers who risk their lives everyday need extra pay now.

“There’s absolutely no room for delay tactics,” Fernandez said. “It’s not only disrespectful to essential workers but it would literally be taking money out of our essential workers’ pockets …  We need to act urgently. It’s the right thing to do.”

Contact Carly Wipf at [email protected] or follow @CarlyChristineW on Twitter.

Editor’s Note: Derecka Mehrens, executive director of Working Partnerships USA, serves on San José Spotlight’s Board of Directors.