In a Thursday memo to employees, Haggen says it is “cooperating“ with Albertsons in a request with the Federal Trade Commission to revoke a one-year prohibition from hiring the Bellingham grocer’s employees.

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Struggling grocery chain Haggen is suing Albertsons for $1 billion, but simultaneously it’s working with the giant rival to help Albertsons to take back some of its former employees.

In a Thursday memo to employees, Haggen said the companies are “cooperating” in a request to waive the one-year ban preventing Albertsons from hiring workers from the 146 stores it sold to Haggen.

That ban, like the sale of the stores, was required by federal antitrust regulators as a condition for Albertsons’ $9.4 billion takeover of Safeway.

The order was meant to protect Haggen from poaching by a bigger rival. But now, with Haggen planning to shrink under Chapter 11 bankruptcy protection, the ban stands in the way of job security for thousands of grocery store employees.

“We recognize that these are challenging days,” Haggen says in the memo seen by The Seattle Times. “We want you to know with certainty that Haggen is supportive of employees securing work elsewhere.”

Haggen also assured employees that it’s in active talks with many different potential buyers for “a significant number” of locations. “We hope to share more details as they become available, perhaps as soon as next week.”

The moves are the latest twist in a saga that has seen the tiny Bellingham grocer balloon from 18 stores to 164, and then nearly collapse in just a few months as a huge drop in sales at the newly acquired markets bled its cash flow.

The company last week filed for protection from creditors, and documents in the case indicate it is preparing to discard a vast majority of its business.

The memo also shows an unusual collaboration between Haggen and Albertsons, which saw their relationship sour over the failure of Haggen’s attempt to establish a West Coast presence out of the former Albertsons and Safeway stores.

Albertsons sued Haggen for unpaid inventory, and earlier this month Haggen sued Albertsons for $1 billion, accusing it of sabotaging its entry into the new markets.

The FTC and Albertsons didn’t immediately respond to requests for comment.

Haggen more than quintupled its workforce after it bought the Albertsons and Safeway stores. Now nearly 11,000 people work there, including 3,730 staffers in former Albertsons and Safeway stores in Washington and Oregon and 5,140 in California, Nevada and Arizona, according to court filings.

Right now, only workers who’ve been laid off by Haggen are eligible for hire at Albertsons, according to officials at the United Food and Commercial Workers union in Southern California. They successfully pressured Albertsons to give former workers preference for open jobs and benefits based on their prior seniority with the company.

Haggen told staffers that getting a waiver from the FTC has been a “priority,” to “ensure our employees can take advantage of every opportunity available to them.”

FTC staff is trying to get the modification approved on an “expedited basis,” the Haggen memo says. “We understand your frustration, but this is a process and we are only days into it.”