New Law Prohibits Firing Grocery Store Workers after Change in Ownership

California recently passed legislation establishing a 90-day transition period for workers in grocery stores of at least 15,000 square feet. The law requires new owners to retain employees during the transition period, give the workers a written performance evaluation, and consider offering them continued employment based on their evaluations. This new law takes effect January 1, 2016.

Not surprisingly, the new law was backed by the United Food & Commercial Workers, while it was strongly opposed by the California Chamber of Commerce, California Grocers Association, California Retailers Association and more than twenty local business groups. California is the first state to require stores to retain employees after a change in ownership. But, notably, not all industries must retain employees – so far this retention law applies only to the grocery industry.

As we explained in “NLRB Finds Local Worker Retention Law Triggers Successorship,” worker retention laws are problematic because the Board imposes successorship liability upon the succeeding owner. It will be interesting to see whether the Board reconsiders its position if such worker retention laws become more commonplace.

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