The lawsuit will be filed by the end of next month and will accuse Mi Pueblo of cheating employees out of overtime and break pay.
A group of 20 people, including four former Mi Pubelo workers, gathered outside the supermarket on Story Road in San Jose holding signs that read "Fix Mi Pueblo" and "No More Firings."
"I was always there on time, never called in sick," said Omar Olin who lost his job. "There was time I had to work 12 hours, 13 hours a day -- never had a break or anything."
Mi Pueblo said it did lay off 150 people in January because of the economic downtown, but insists the family-owned chain treats its employees fairly and says the threat of a lawsuit stems from the fact that the stores are not union.
"This is part of a larger campaign and effort against Mi Pubelo," Mi Pueblo Food Center spokesperson Perla Rodriguez said. "It's part of their union tactics. The lawyer that they hired is the same lawyer that they hired when they tried to do the same thing with Su Vianda supermarkets."
That attorney admits he would like to see Mi Pueblo's 21 stores and 3,000 employees represented by the United Food and Commercial Workers union.
"I see unionization as a benefit to the community, to the workers, to everyone involved," said attorney Marc TerBeek.
TerBeek says he expects 100 former Mi Pueblo employees to join his lawsuit. Supporters of the legal action say right now many of the workers feel cheated but are afraid to come forward.
Marisa Salas with the Mercado Workers' Association said she's been approached by employees who have explained their situation to her, expressed their feelings of discomfort, and then said "What can I do? I don't want to lose my job," Salas said.
Mi Pueblo has successfully launched new stores in underserved communities throughout the Bay area. The supermarket chain allowed ABC7 cameras to interview Martin Gomez in their store. Gomez started as a grocery bagger three years ago and is now working as a cashier where he makes $10.25 an hour.
"They gave me an opportunity to better myself and go up in the cash register departments, and so far my experience has been the best," Gomez said.
It's still unsure how many people will be a part of the lawsuit; that number will be better known once the suit is filed. The lawsuit will seek compensation for unpaid wages, interest and attorney's fees.