Assembly passes grocery employment mandate

groceryIf you purchase a grocery store that is going out of business because its employees have not provided good customer service and sanitary conditions, should you be required to hire those same employees? The answer is yes, according to Assembly Bill 359, which recently passed the state Assembly.

AB359 places a number of mandates on the purchaser of a grocery store that is larger than 15,000 square feet:

  • The new owner must employ the store’s workers for at least 90 days after the purchase.
  • If the new owner does not require as many employees, the workers must be retained based on seniority.
  • None of the retained employees can be fired “without cause.”
  • The new owner must provide a written performance evaluation for each worker and “shall consider” offering workers continued employment after 90 days.
  • The new owner must abide by the collective bargaining agreement that was in effect for the previous owner of the store.

Importance of preserving CA jobs

The bill’s author, Assemblywoman Lorena Gonzalez, D-San Diego, argued on the Assembly floor May 26 that it’s important to preserve California jobs in the face of corporate takeovers:

“When Wall Street-style mergers, private equity firms and leveraged buyouts hit the grocery industry, a high number of jobs are put at risk, wages are reduced and workers are fired. It’s unsustainable for many of our communities.”

 

“Historically, these are some of the last good-paying middle-class jobs that have played an important role in our communities. They are jobs that can’t leave California, they can’t be outsourced to another country. They are part of the backbone of our very communities. I think we should respect our grocery workers.”

Two Assembly Democrats spoke in favor of the bill.

Roger Hernandez, D-West Covina, complained that 41 percent of the state’s largest grocery stores are owned by private equity firms:

“We know that such firms don’t always have the best interest of workers in our local communities at heart. So I think this bill is an important check to protect middle class jobs.”

 

“Folks, we all say we are all in support of protecting middle-class jobs and stopping the erosion of good-paying jobs in California. We have the opportunity to do that just here. And we have the right and the ability here to stand up for these workers that depend on their jobs and sustain for their families. Let’s send a message to our communities that we back up the workers that enjoy benefits, access to health care, proper hours and the opportunity to sustain their families.”

Assemblyman Eduardo Garcia, D-Coachella, believes AB359 will help his 56th Assembly District, including Imperial County, which has a 21 percent unemployment rate:

“Sometimes we have to push public policy to ensure the retainment of jobs in California. I think this bill does exactly that, protecting the opportunity for workers to stay employed until the company has the opportunity to make the proper assessment in order to make a permanent hire. I cannot afford for Imperial County to continue to see rising unemployment rates for this state.”

Small business owner concerns

The bill was opposed by nearly every Republican Assembly member, several of whom spoke in opposition. James Gallagher, R-Nicolaus, noting that most grocery stores are not owned by private equity firms, is concerned that the employment mandate will hurt small business owners.

“When we discussed this in Judiciary Committee, one of my concerns was this would impact a lot of small and family-owned grocery stores in the state,” said Gallagher. “At least part of when you take over a new grocery store is that that store wasn’t doing well. You’re trying to keep it alive in the community moving forward, so you need to make personnel decisions. This could inhibit that.”

Gonzalez responded that family-owned grocery stores tend to be smaller than 15,000 square feet and would not be affected by the bill.

“But even if they did [own a larger store], they would simply be required to maintain a workforce for 90 days,” she said. “After which time, as long as they gave them a good shot and allowed them to apply for a job, they could say no to every single one of those employees. It’s a cushion, it is not a mandate.”

But Assemblywoman Shannon Grove, R-Bakersfield, argued that the employment provisions would lead to litigation and punitive penalties under a portion of the state’s labor code known as the Private Attorney General Act:

“You have to make personnel decisions, decisions on making a grocery store succeed or survive or any business,” Grove said. “PAGA’s a hot issue because we have lot of trial lawyers in the state of California who are abusing PAGA under modern extortion with the protection under the law.

 

“But in this particular situation, if you have an employee who stays on 90 days and the successor grocery stores chooses not to hire them, they will have 33 days to cure it. Meaning 33 days to change your mind or ‘I will sue you.’ It’s just a law that creates an unfair burden on all of the employers, especially if they are trying to salvage companies that are in a transition.”

Will bill increase litigation?

Assemblyman Donald Wagner, R-Irvine, echoed Grove’s concerns:

“Bottom line is this: if you’ve got a workforce and at the end of that 90-day period you fire them all, there is not a lawyer in this state that would not salivate at the opportunity,” he said. “It does not matter if, for example, you’ve got a store, your neighborhood is changing, perhaps more of our Hispanic constituents are moving into the neighborhood, and you would like to reflect the change and hire those workers in your new establishment that perhaps is catering to that demographic.

 

“You cannot, under this bill, respond to that demographic change and make the necessary changes in the workforce. Because there will be lawyers lined up out your door waiting to hired by every one of those workers.

 

“We aren’t talking about a zero sum game here. We aren’t talking about firing a whole bunch of workers and hiring nobody else. We are talking about hiring different workers coming up out of that community that maybe are now more reflective of that community than they were in the past.

 

“And we up here, because we are so much smarter than they are and know better than any one of our individual business owners, are saying, ‘No, you can’t do that.’ Well, we are not smarter and we shouldn’t be saying that. We should say no instead to this bill and allow our business owners on the ground to respond to our constituents on the ground, rather than pretend that we up here know better.”

Gonzalez dismissed the concern that her bill will lead to litigation abuse under the Private Attorney General Act.

“Twice last week we voted for bills that are subject to PAGA – 69 times in the last two years,” she said. “Once last week this entire body voted for a bill that had worker retention for airport workers. On the books of our state we have worker retention for janitors. And at nearly every one of our airports, we have had at some point adopted worker retention ordinances.

 

“This is not new. There are not lines of attorneys lining up to sue these agencies or the grocery stores in the five cities that have already passed this. This is in fact less litigation-happy than a lot of the bills that we pass through here.”

Bill labeled “Job Killer”

The California Chamber of Commerce issued a floor alert calling AB359 a “job killer” and charging that the bill:

  • Subjects employers to multiple threats of litigation.
  • Denies employers the basic choice of whom to hire in their workforce.
  • Eliminates an employer’s opportunity to investigate applicants before hiring.
  • Forces an employer to adhere to terms of a contract to which it is not a party.
  • Does not provide stability or reduce unemployment in the grocery industry.
  • Discourages investment in grocery establishments and jeopardizes jobs.

The bill will next be considered by the Senate Rules Committee.

24 comments

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  1. Richard Rider
    Richard Rider 2 June, 2015, 07:15

    It’s bills like this one that has inspired America’s top CEO’s to rank California “the worst state in which to do business” for the 11th straight year (May, 2015).
    http://chiefexecutive.net/2015/05/07/best-worst-states-business/

    I particularly enjoyed this excerpt from their analysis:
    ” . . . there are degrees of disenchantment. One of the biggest factors in CEOs’ thinking is the attitude that local and state authorities have toward business and the perceived capriciousness of regulations, particularly those imposed on smaller firms least able to bear the costs. In this respect, if it were possible to rank 60th out of 50 states, California would likely rank No. 61. Joseph Vranich, an expert on corporate relocations, has counted more than 200 major companies with tens of thousands of employees that left the Golden State over the last four years.”

    Reply this comment
  2. Richard Rider
    Richard Rider 2 June, 2015, 07:16

    CA has the highest/worst state workers’ compensation rates in 2013, up from 3rd in 2012. CA rates 21.3% higher than 2nd highest state, 88% higher than median state. Yet we pay low benefits — much goes to lawyers. http://riderrants.blogspot.com/2014/10/california-has-worst-workers.html

    Reply this comment
  3. Richard Rider
    Richard Rider 2 June, 2015, 07:18

    The American Tort Reform Foundation ranks CA the “worst state judicial hellhole” in U.S. – the most anti-business. The U.S. Chamber of Commerce ranks CA a bit better – “only” the 4th worst state (unfortunately, sliding from 7th worst in 2008).
    http://www.judicialhellholes.org/wp-content/uploads/2014/12/JudicialHellholes-2014.pdf
    and
    http://www.instituteforlegalreform.com/states/california

    Reply this comment
  4. Tom in SoCal
    Tom in SoCal 2 June, 2015, 08:04

    Why would anyone in their right mind takeover a failing grocery store with this law in effect?

    Reply this comment
  5. Dork
    Dork 2 June, 2015, 08:38

    This is great, Nobody needs food anyway, and the sooner we run these greedy grocery stores out of town the sooner the people will be able to fend for themselves and stop making greedy business owners wealthy just because they wish to EAT. What a frikking joke this State and this country has turned into.

    Reply this comment
  6. Bill Gore
    Bill Gore 2 June, 2015, 12:02

    AY Carramba mija Lorena! You are definitely working overtime, building on your good work in San Diego. As this bill will make groceries into dead end business models, look for the expansion of ‘food deserts’ from the inner cities out to the suburbs. Law of unintended consequences, you know….Which of course will lead you to ‘double down’ with even more draconian laws..

    Reply this comment
  7. Mamabearof5
    Mamabearof5 2 June, 2015, 23:56

    California just gets dumber and dumber with all the libtard idiots running it. I can’t wait to exit this retarded state!

    Reply this comment
  8. Gerry Nance
    Gerry Nance 3 June, 2015, 03:24

    I sense Marxism in support of this bill AB359. It seems as if FARC, FMLN and EZLN have infiltrated our government.

    Reply this comment
  9. desmond
    desmond 3 June, 2015, 03:44

    We need state owned grocery stores staffed by lice infested, hepatitis, carrying deli workers making $75.00/ hour targeting retirement at age 45.

    Reply this comment
    • Richard Rider
      Richard Rider 3 June, 2015, 06:51

      Desmond, don’t give progressives such ideas. They’ll do it! After all, government can deliver our food without a profit, saving consumers on their grocery bills!

      Yeah, government monopoly grocery stores worked SOOOOO well in the good old USSR. And it helped people develop their organizational and “people” skills, standing in line for tickets to get vouchers to get their spoiled meat.

      Come to think of it — given that the powerful public employee labor unions are able to convince politicians that government provides services cheaper and better than competitive bidding — isn’t it a wonder that we don’t have government commissaries already?

      Reply this comment
      • NTHEOC
        NTHEOC 3 June, 2015, 08:32

        Come to think of it — given that the powerful public employee labor unions are able to convince politicians that government provides services cheaper and better
        ——————————————————
        No convincing needed, it’s the truth!

        Reply this comment
    • NTHEOC
      NTHEOC 3 June, 2015, 08:28

      Desmond, with the exception of 75/hr these are just the types of people the greedy private sector corporate hogs love to hire! No doubt they are also for child labor sweatshops. I love that this passed…..

      Reply this comment
  10. TJAppleg8
    TJAppleg8 3 June, 2015, 06:06

    Will the last person to leave the State please turn off the lights . . .

    Reply this comment
    • Ulysses Uhaul
      Ulysses Uhaul 3 June, 2015, 09:08

      Ah…….pack and ship with us…….we treat ya right!

      Reply this comment
      • afrequentreader
        afrequentreader 3 June, 2015, 11:08

        Ulysses, business is probably better south of the border. I’m sure you’d be “flooded” with business, as to how Brown put it, “Your all welcome here”. So what cha’ waiting for?

        Reply this comment
        • Ulysses Uhaul
          Ulysses Uhaul 4 June, 2015, 20:12

          Business is brisk in So Cal…..no need to go south of border and lease baldy tired trailers to gun runners!

          Reply this comment
  11. Fed Up
    Fed Up 3 June, 2015, 21:11

    What a disgraceful bill, as the article makes so clear. We’d know far less without “Cal Watchdog.”

    Reply this comment
  12. SD Rostra
    SD Rostra 4 June, 2015, 14:47

    Why would anyone in CA want to buy a grocery store? Ask Lorena Gonzalez. http://sdrostra.com/?p=41877

    Reply this comment
    • Queeg
      Queeg 4 June, 2015, 20:17

      Comrades,

      CWD froths you up over nothing……most of these loon drafted bills are merely cattle prods to stimulate you…..beware.

      Reply this comment

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