Save Mart retirees file suit against Modesto grocer. Could they get ‘hundreds of millions’?

A judge has ordered that a class-action lawsuit filed by four retired Save Mart employees seeking potentially “hundreds of millions” of dollars from the Modesto-based grocery chain over the elimination of a long-promised health care benefit last year can move forward.

The longtime Save Mart employees, who all worked in nonunion management or executive roles, first brought the suit against their former employer in August in the U.S. District Court for the Northern District of California. Save Mart attorneys countered with a motion to dismiss, which was heard by a federal judge in San Francisco in late March.

On Friday, U.S. District Judge William Orrick issued an order denying Save Mart’s motion to dismiss the case and allowing the suit to move ahead.

“They (the class-action plaintiffs) are determined. It’s extraordinary, to be quite honest. I’ve never seen anything quite like it,” said Jim Keenley, a founding partner at one of the law firms representing the plaintiffs. “They are very upset and they feel very aggrieved and they’re very well organized.”

The legal wranglings stem from the supermarket chain’s decision to end a nearly 40-year policy giving some of its long-term nonunion staff enhanced medical benefits after retiring from the company. Almost exactly a year ago, these Save Mart retirees were told the company was ending their health care supplement of up to $1,000 a month.

In March 2022, The Save Mart Companies announced its acquisition by Los Angeles-based private equity firm Kingswood Capital Management LP. The sale ended 70 years of family ownership, largely by the Modesto-based Piccinini family. In late April of last year, letters went out to retirees in the enhanced benefits plan that they would stop receiving their payments after June.

The company has about 200 Save Mart, Lucky California and FoodMaxx stores across Northern California and Northern Nevada, with some existing 14,000 total employees. The Save Mart Companies also operates SMART Refrigerated Transport and is a partner in Super Store Industries, which owns and operates a distribution center in Lathrop, and the Sunnyside Farms dairy processing plant in Turlock. Its annual sales are between $4 billion and $5 billion, according to past company documents.

Four plaintiffs are listed in the suit, though if a class action is officially certified, that could potentially swell to hundreds or more who could join. Lawyers representing the retirees said they have a list of about 100 other retirees who potentially could become class members, and created a website for updates.

The lead plaintiffs in the suit are former Save Mart employees Katherine Baker, a 28-year employee who retired as a senior director of operations; Jose Luna, a 33-year employee who retired as a store manager, Edgar Popke a 39-year employee who retired as vice president for operations, and Denny Wraske, a 46-year employee who retired as a senior director of operations.

Representing the plaintiffs in the class action are three California legal firms that specialize in employee law or class action litigation. They are Berkeley-based Bolt Keenley Kim, San Francisco-based Lieff Cabraser Heimann & Bernstein, and Manhattan Beach-based Matern Law Group.

The Bee reached out to The Save Mart Companies for comment but did not hear back by publication deadline.

They helped build Modesto’s Save Mart. Now retirees feel betrayed by sudden benefit cut

Last spring, The Bee spoke with more than 30 Save Mart retirees affected by the elimination of the health care benefit, including the four named plaintiffs in the case. All were angered by the company’s decision to end the payments, saying it had been a oft-repeated promise from Bob Piccinini, the company’s longtime CEO who grew the grocery brand to be a powerhouse in the region before passing away in 2015, that their retirement benefits would be as good or better than their union colleagues.

Baker, who retired in 2017, told The Bee at the time that the abrupt change felt like a betrayal.

“I always felt like I was working for a family. That was the nice part about working with Save Mart. Bob (Piccinini) was very good to us. In turn, we were extremely good to him,” she told The Bee last May. “So that this would happen to us now makes me very sad and upset. This was something that was guaranteed to us.”

Since at least the 1980s, Save Mart provided its long-term nonunion employees with some form of a health care benefit. In recent years, that amounted to up to $1,000 per month ($500 for former employees and $500 for their spouses). The money went into a health reimbursement arrangement (HRA), which also oversaw their insurance plans if they were under the age of 65. The benefit continued after retirees reached 65 and qualified for Medicare but was reduced to up to $600 per month.

Last year, Save Mart’s spokesperson told The Bee the letters ending the benefit went out to some 420 employees, or about 3% of the company’s 14,000 staff. At the time, the need for the change was attributed to “stiff competition with significantly larger” grocery chains.

The class-action case has not been certified by the judge yet. The parties will have their first case management conference April 25, which will set the schedule for the case moving forward including a motion to certify. Kennley, of the Bolt Keenley Kim Law Firm, said he expects discovery and the next phase of the lawsuit to take up to a year.

“Getting past motion to dismiss was a major and important hurdle in the case,” Keenley said. “While (the decision) was very much expected, it’s really good for the plaintiffs that we’re past that part. We’re now headed to the solid meat of the case: discovery. It will be a long process — obtaining documents, witness depositions — to flesh out the evidence of the case.”

While the amended class-action suit does not specify a monetary amount, Keenley estimated the “total economic loss in the low hundreds of millions (of dollars) at least.”

The case could settle if the plaintiffs and Save Mart attorneys can come to an agreement on money or terms.

“Our goal is to make people whole, so our goal in the case is to get all of it. Where we stand right now, there’s no reason to back off of that goal,” Keenley said.