United Food and Commercial Workers, Local 7 v. Dillon Companies, LLC

District Court, D. Colorado·Decided May 3, 2023·No. 1:23-cv-00958·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO District Judge Gordon P. Gallagher

Civil Action No. 23-cv-00958-GPG

UNITED FOOD AND COMMERCIAL WORKERS, LOCAL 7,

Plaintiff,

v.

DILLON COMPANIES, LLC,

Defendant. ______________________________________________________________________________

ORDER ______________________________________________________________________________

This matter is before the Court pursuant to the Plaintiff’s (the Union) Motion for Preliminary Injunction (D. 4). The Court heard oral argument on that motion in a hearing on April 25, 2023, held an evidentiary hearing on April 28, 2023, and considered briefs submitted by the parties (D. 4, 23, 29, 30), along with the record to date. The Court DENIES the motion for the following reasons. I. FACTS1 Defendant Dillon Companies LLC (Dillon) operates numerous King Soopers and City Market grocery stores in Colorado and Wyoming. The Union is the certified bargaining agent of employees at some, but not all, of Dillon’s stores. Dillon and the Union are parties to several collective bargaining agreements (CBA or contract) that govern various regions and stores. The

1 The facts are derived primarily from the Complaint (D. 1), the briefing related to Plaintiff’s motion for a preliminary injunction (D. 4, 23, 29, 30), as well as the facts established during the evidentiary hearing held on April 28, 2023 (D. 28). parties introduced Defendant’s Exhibit 7 (see also D. 5-1 at 45), an example of a CBA covering employees in unionized stores in Denver.2 The contracts contain several provisions that address what work must be assigned to bargaining unit members and what work may be performed by persons outside the bargaining unit.

Those provisions include: Section 2: All work and services performed in the bargaining unit connected with the handling or selling of merchandise to the public shall be performed exclusively by bargaining unit members except . . . Field Merchandisers can perform all duties in the store.

Section 3. Vendor Work: . . . [A]ll vendors may perform: any work in connection with promotional and seasonal displays; facing in connection with the service of product; rotation of product; cleaning of product, shelves, and racks; affixing coupons and other promotional materials. . . .”

(D. 5-1 at 48-49). The parties also made reference to Letter of Agreement #10 (Holiday Pay for Part-time Employees and Outdoor Bedding Plant Sales, Dated 4/6/89), which is attached to the contract and is construed as an additional provision thereof. It reads: . . . the parties have a dispute as to the permissible duties of GM/Non-food clerks with respect to the handling and sales of seasonal bedding plants items outside the plant and floral department . . . The sales of bedding plants and related items outside the store (and Christmas trees during the holiday season) shall be performed by Plant and Floral clerks of the store. In the event that Plant and Floral clerks don’t exist in the location, or they have their hours maximized, then the company may utilize GM/Non-food clerks to perform the work at the GM/Non-food clerks’ current rate of pay.

(D. 5-1 at 112).

2 For purposes of this case, the Court assumes that all relevant CBAs have the same operative language. The contracts have a multi-step dispute resolution procedure culminating in binding arbitration (D. 5-1 at 86-87). The contract provides that an arbitrator’s award “shall not change, alter or modify any of the terms and conditions set forth in this agreement” (id. at 87). The contracts contain certain limitations on how an arbitrator’s award for improper work

assignments by management may be implemented. Section 119 provides that: If an error is made by management in the application of the provisions of this Agreement resulting in a lost work opportunity for the aggrieved employee such as vendor stocking, scheduling and assignment of hours disputes, classification issues, and work jurisdiction matters . . . the employee shall be made whole by being permitted to work the number of hours lost. Such hours shall be above and beyond the posted schedule . . . An aggrieved employee may not demand such remedy on an overtime or premium-pay basis if the alleged violation occurred on what would have been a straight- time day for such employee. The employee must exercise this right to work within four (4) weeks of the settlement of error with the employee or such right shall be forfeited and no further remedy shall be required.

(D. 5-1 at 87).3 During the hearing before the Court on April 25, 2023, counsel for Dillon noted that it would not waive Section 119 or “any argument that would be helpful to our client” (D. 26). Dillon’s stores have an outdoor area adjacent to the front doors that is occasionally referred to as the “front porch.” For some number of years, during the period of approximately March through November, stores display and sell “seasonal plants” or “bedding plants” in the front porch area. In 2022 and years prior, stores would purchase bedding plants from a supplier and take ownership of those plants upon delivery. Bargaining unit members, primarily from the Floral

3 The Court does not interpret the language of these documents, but merely highlights the language that currently exists between and governs the parties. The Court must look at Section 119 in order to conduct its analysis regarding whether the arbitration remedy would be futile but does not interpret the language of the documents as that function is within the purview of the arbitrator. Department, would be responsible for arranging the plant displays, watering and trimming plants, rotating stock, cleaning the front porch area, and discarding plants that had become unsellable. Merchandise that becomes unsellable for whatever reason is referred to as “shrink,” and because stores owned the plants they sold, plants lost due to shrink reflected a revenue loss to the store.

Beginning in or about December 2022, Dillon entered into a new business arrangement for bedding plants with an entity called National Garden Services (NGS). Under this arrangement, sometimes referred to as “scan-based trading,” NGS would retain ownership over the plants on display, much like a consignment arrangement. Customers would purchase plants through the stores’ points of sale just like any other merchandise, and the store would keep track of those plant sales and remit a certain portion of the sales revenue back to NGS. Because NGS retained ownership of the plants until the point of sale, revenue losses due to shrink would be borne by NGS, rather than Dillon’s stores. On March 4, 2023, Dillon representative Jessica Quintana sent an email to various managers and others, announcing that “all outdoor Floral will be Scanned Based starting this

Period with Spring 2023” (Def’s Ex. 1, see also D. 5-1 at 382). The email attached a document entitled “Outdoor Floral SBT Transition One-Pager,” which advised that “NGS 3d party merchandising service teams [have] been approved by the labor relations teams to service outdoor floral in all areas” (id. at 383). It further noted that NGS “will provide 3d party merchandising service including: watering plants; product rotation and culling/pruning/trimming/disposal; merchandising/displaying product; unloading [ ] trucks; building and maintaining fixturing; [and] cleaning the porch areas” (id.). Ms. Quintana’s email included a line stating that “I will be sending more communication in the next few days on what the partnership will look like with [NGS] in our union locations” (id. at 382). It is undisputed, however, that stores did not receive further guidance on this issue until April 24, 2023 (a full seven days after the Union initiated this civil action).

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United Food and Commercial Workers, Local 7 v. Dillon Companies, LLC, (D. Colo. 2023).

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