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Grocery Store Chains Defeat Antitrust Claims Arising From Strike-Related No-Poach Agreement
02/18/2026On February 6, 2026, Judge Gordon P. Gallagher of the United States District Court for the District of Colorado granted defendants’ motion to dismiss in Valarie Morgan v. The Kroger Co., et al., Civ. A. No. 25-cv-00837-GPG-CYC, dismissing a proposed class action antitrust lawsuit alleging the grocery giants violated antitrust law through a no-poach agreement entered into during a 2022 union strike. Notably, the Court observed that, leading up to the strike, defendants had discussed coordinating but could not agree on a Mutual Strike Assistance Agreement.
Plaintiff, a United Food and Commercial Workers Local 7 (“Local 7”) union member and grocery store employee, alleged that defendants entered into an unlawful no-poach agreement during the January 2022 strike in Colorado. According to the complaint, Local 7 reached an agreement with one defendant grocer to extend the Collective Bargaining Agreement (“CBA”), (the “CBA Grocer”), but there was no similar agreement with the other defendant grocer (the “Non-CBA Grocer”). In anticipation of, and fearing that, employees would seek employment at the CBA Grocer, Non-CBA Grocer’s VP of Labor Relations emailed his counterpart at CBA Grocer, who confirmed that they did not “intend to hire any [Non-CBA Grocer] employees” and would not “solicit or publicly communicate that employees should transfer their scripts” to CBA Grocer.
Plaintiff argued this exchange constituted a per se unlawful market allocation agreement that artificially reduced the union’s bargaining power and resulted in collective bargaining agreements with lower wages and benefits than would have been achieved absent the alleged collusion.
In their motion to dismiss, defendants raised several defenses, including that the claims were preempted by federal labor law, that the alleged conduct was exempt from antitrust scrutiny under the non-statutory labor exemption, and that plaintiff failed to allege antitrust standing because her injury theory was too remote and speculative. Additionally, defendants characterized the email exchange as merely reflecting CBA Grocer’s unilateral business decision not to hire Non-CBA Grocer employees—not an unlawful agreement—and argued the conduct represented permissible coordination between employers responding to the union’s bargaining strategy during ongoing labor negotiations.
The Court agreed with defendants and applied the non-statutory labor exemption recognized by the U.S. Supreme Court in Brown v. Pro Football, Inc., 518 U.S. 231 (1996), which shields certain employer conduct from antitrust scrutiny when it arises from the collective bargaining process. Judge Gallagher stated that this is not an antitrust matter, but rather “a dressed up labor dispute,” holding that the alleged agreement was “inextricably tied to the ongoing bilateral collective bargaining processes of both [Non-CBA] and [CBA Grocers]” and was “directly responsive to so-called economic weapons being deployed by Local 7.” The Court distinguished the case from California ex rel. Harris v. Safeway, Inc., 651 F.3d 1118 (9th Cir. 2011), noting that a revenue-sharing agreement between grocery chains as a response to a labor strike, as in Safeway, affects relevant product markets. Here, by contrast, the alleged no-poach agreement “operates only in the labor market,” and any effect on the product market was “tangential to the core labor market issues at stake.” The Court emphasized that “the case for the applicability of the non-statutory exemption is strongest where the alleged restraint operates primarily in the labor market.” The Court also observed that CBA Grocer had rebuffed any suggestion that it would prevent prescription transfers, instead merely communicating that it would not actively solicit transfers—thereby maintaining the status quo.
The Court also denied plaintiff’s motion to amend her complaint to add federal Sherman Act claims, finding amendment would be futile because the non-statutory labor exemption applied equally to state and federal antitrust claims. The Court noted that plaintiff’s union, Local 7, had previously raised challenges to the collective bargaining process with the NLRB, which were dismissed. Although defendants sought dismissal with prejudice, the Court declined to do so, stating that “denial of leave to amend and dismissal with prejudice are two separate concepts.” The Court has left open the possibility of future NLRB proceedings or a refiling of the same legal claims but with factual allegations that are “sufficiently distant in time and in circumstances from the collective-bargaining process” as to not be barred by the non-statutory labor exemption.
