Grocers' Revenue-Sharing Deal Deserves More Than a Quick Look, Ninth Circuit Holds

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A revenue-sharing agreement among grocery stores, designed to help the stores weather targeted strikes by employees during labor strife, is not shielded from antitrust scrutiny by virtue of the non-statutory labor exemption, but neither is it so obviously anticompetitive to merit condemnation under a "quick-look" analysis, an en banc panel of the U.S. Ninth Circuit Court recently held. California ex rel. Harris v. Safeway, Inc., No. 08-55671 (9th Cir. July 12, 2011).

The case stems from labor negotiations in 2003 involving three large supermarket chains in Southern California (Albertson's, Ralphs and Vons). These three supermarkets had collective bargaining agreements with a union that were set to expire, and formed a multi-employer bargaining unit to negotiate. A fourth chain, Food 4 Less, had a separate contract with the same union that was due to expire several months later, and also joined the employers' group.

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Sheppard Mullin Richter & Hampton LLP on:

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