Ninth Circuit Applies New "Quick Look Plus" Test To Invalidate Supermarket Mutual Strike Assistance Agreement

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On August 17, 2010, the Ninth Circuit, in an opinion by Judge Steven Reinhardt, issued a potentially significant decision on the intersection between antitrust and labor law. California v. Safeway, Inc., No. 08-55671. The decision resulted from a challenge to collective activity by four Southern California supermarket chains, Albertson’s, Von’s, Ralph’s and Food 4 Less, in response to a strike by the United Food and Commercial Workers (“UFCW”) after expiration of a collective bargaining agreement in October, 2003. The response, as described below, prompted a lawsuit by the California Attorney General alleging that the collective action was either a per se violation of Section 1 of the Sherman Act, or was unlawful under an abbreviated rule of reason “quick look” analysis. The district court denied cross-motions for summary judgment, and entered final judgment after a stipulation in which the State of California agreed not to pursue judgment under a full rule of reason analysis, and defendants withdrew all affirmative defenses except for the claim that the profit sharing agreement at issue was protected from antitrust review by the non-statutory labor exemption.

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