The San Jose City Council is one step closer in requiring some grocery store employees get a pay boost in the form of hazard pay during the pandemic.
During its Tuesday meeting, the council voted 6-3 to draft a mandate requiring large grocery stores to pay their employees an additional $3 per hour until Santa Clara County’s COVID-19 health order is lifted.
The measure, which only applies to grocers with 300 employees nationwide or more, could be implemented as soon as next week’s meeting on Feb. 9.
Two of the councilmembers, Vice Mayor Chappie Jones and Councilwoman Pam Foley, were required to abstain from the vote after City Attorney Nora Friedman noted their conflict of interest.
Both Jones and Foley own stock in Amazon, which is a conflict of interest because it owns Whole Foods Market — a grocer that would be subject to the ordinance if passed.
The last-minute move regarding conflict of interest was scrutinized by Councilwoman Sylvia Arenas, who said it was the “most awkward item in the four years I’ve been here.”
“There were councilmembers who knew ahead of time that there was conflict, and we had a motion in place, a full memo in place,” Arenas said. “I think this was meant to deter this kind of conversation.”
She said she wondered why they had not recused themselves earlier, especially because Jones had drafted his own memo recommending that the city study the hazard pay before making any final decisions.
Mayor Sam Liccardo, who supported Jones’ suggestion, was quick to defend the councilmembers, noting that they did not know it was a conflict of interest.
Liccardo voted against the pay boost, along with councilmembers Dev Davis and Matt Mahan, because they wanted to assess all potential and unintentional consequences — an idea mentioned in Jones’ memo.
Before Foley and Jones left the meeting, they said they worried that the hazard pay would result in employees having hours cut or stores closed in lower income areas.
Already Long Beach, which instituted hourly hazard pay, was sued by the California Grocers Association, which claimed the mandate was illegal because it interfered with the collective bargaining process.
Kroger, the largest grocery store chain in the country, also announced that it would close a Ralphs and a Food 4 Less in Long Beach instead of paying the additional $4 per hour of hazard pay.
“I don’t know all the specifics in terms of where those stores were located but I am willing to make an educated guess that they were low-income vulnerable communities,” Jones said. “I don’t want to see something like that happen [in East San Jose] so that’s why I want to have a better understanding of the ramifications.”
However, the remaining six councilmembers said a study would lead to “analysis paralysis,” and grocers would probably say the pay boost would put them out of business.
“These large retailers are doing just fine but obviously it is going to have an impact financially,” Councilman Sergio Jimenez said. “I think they can weather that storm just as, you know, many of us struggle to put food on the table.”
Jimenez introduced the hazard pay proposal last week and initially recommended the council institute a $5 hourly increase but it was negotiated down to $3 on Tuesday.
“Oftentimes we’ve thought about frontline workers as it relates to our health care system lifting up doctors and nurses,” Jimenez said. “We also got to understand that there’s many more other folks that are working on the front lines and that’s why I thought this [hazard pay] was important.”
Retail workers, including grocery store employees, are five times more likely to test positive for COVID-19, according to a study published in the journal Occupational and Environmental Medicine.
John Nunes, president of United Food and Commercial Workers Local 5, urged the council to pass the hazard pay mandate and emphasized employees should be compensated for their sacrifices.
“The work they provide is life-threatening,” Nunes said. “Our union nationally has lost over 120 workers to this deadly disease.”
The union, which represents more than 25,000 grocery store employees in Northern California, also had more than 28,700 employees exposed to positive COVID-19 cases.
But San Jose still has looming threats of lawsuits if the council institutes the pay boost, especially as the California Retailers Association prepares to fight back.
“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,” a spokesperson from the California Retailers Association said at the council meeting.
“This is the last thing our members want to do in the middle of a COVID-19 pandemic and economic crisis,” he continued.
San Jose leaders will discuss the legal risks in a closed session next week.
If the motion passes, San Jose will join Long Beach, Santa Monica and Oakland, which unanimously approved a $5 hourly pay increase on Tuesday.
The Los Angeles City Council also unanimously voted to move forward with hazard pay plans on Tuesday.