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New California Law Requires Grocery Stores to Retain Employees for 90 Days After Change of Ownership

Published by on October 14, 2015

On August 17, 2015, California Governor Jerry Brown signed into law AB 359, which provides protections to certain grocery industry employees upon a change of ownership of the grocery establishment. This new law is being billed as the first State law of its kind in the United States. AB 359 requires that upon a change […]

On August 17, 2015, California Governor Jerry Brown signed into law AB 359, which provides protections to certain grocery industry employees upon a change of ownership of the grocery establishment. This new law is being billed as the first State law of its kind in the United States.

AB 359 requires that upon a change in control of a grocery establishment, an incumbent grocery establishment must prepare a list of specified eligible grocery workers for the successor grocery employer. The successor grocery employer is required to hire from this list during a 90-day transition period.

The law requires that a successor grocery employer retain eligible grocery workers for a 90-day period, prohibits the successor grocery employer from discharging those workers without cause during this period, and upon the close of that period, requires the successor grocery employer to consider offering continued employment to those workers after a written performance evaluation. Incumbent grocery establishments are also required to post notice of the change in control at the affected grocery establishment in a place readily viewed by workers and customers.

Eligible grocery workers are defined as individuals whose primary place of employment is the incumbent grocery establishment and who have worked for the incumbent grocery establishment for at least six months prior to the execution of the grocery establishment’s transfer document.

Managers and supervisors are excluded from the definition of eligible workers. A “grocery establishment” is defined as a retail store over 15,000 square feet in size and that sells primarily household foodstuffs for offsite consumption.

The law exempts from its requirements a grocery establishment located in a “food desert” defined by the United Stated Department of Agriculture (USDA). The law also provides that a collective bargaining agreement may supersede the law’s requirements and that its provisions do not preempt any local ordinances that provide equal or greater protection to eligible grocery workers. This new law is codified in Labor Code section 2500 et seq. The entire text of the law can be found here.

Laconic Lookout: Companies considering buying or selling an interest in a grocery establishment in California should be aware of these requirements and be prepared to comply. Although currently applicable only to grocery establishments, it is certainly possible that California or other states could pass similar job continuation laws upon change in ownership for other industries.

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