The California grocery industry is bracing for potential changes in the wake of Assembly Bill (AB) 647. The bill, authored by Assemblymember Lorena Gonzalez (D-San Diego), presents several amendments for grocery stores and their employees in the event of a change in control. The proposed changes have prompted opposition from several major organizations, including the California Chamber of Commerce, the California Grocers Association, and the California Retailers Association.
Opposition to AB 647
The California Chamber of Commerce, the California Grocers Association, and the California Retailers Association have jointly submitted their opposition to AB 647. The organizations’ joint letter expresses concern over recent amendments to the bill, stating that these changes “create significant litigation risks for the grocery industry, including the addition of punitive damages.”
The letter goes on to say that “the most recent amendments create a rebuttable presumption in favor of an employee and set arbitrary standards for the reinstatement of employees.” This creates a level of uncertainty and unpredictability for grocery store owners who may need to take action to address critical operational needs.
Current legal requirements
Under current law, when a change in control occurs at a grocery store, the incumbent employer has 15 days after the execution of the agreement affecting the change in control to provide the successor employer with a list of eligible grocery workers. The intent of this law is to ensure that incumbent grocery store employees are protected in the event of a change in ownership by giving them the opportunity to maintain their employment or be offered employment by the new owner.
To be considered an eligible worker, the worker must have been primarily employed by the incumbent employer for at least six months prior to the execution of the agreement affecting the change in control, unless the worker is a “separated employee.” A separated employee is defined as an employee who has voluntarily resigned or has been discharged for cause prior to the execution of the agreement affecting the change in control.
Proposed Changes
AB 647 would extend the timeline for hiring from the list of eligible workers to 120 days after the grocery store is fully operational. This proposed change would allow the successor employer more time to assess their staffing needs and make employment decisions without the risk of exposure to litigation.
The bill would also authorize the successor grocery store employer to obtain the list of eligible grocery workers from a collective bargaining representative if the incumbent grocery employer does not provide the information within 15 days. This proposed change could be seen as a win for employees, as it ensures that they have representation in situations where the incumbent employer fails to meet its legal obligations.
AB 647 would also grant a worker who is offered a position that is more than 15 miles away from their place of residence the right to refuse the offer without a loss of seniority. This proposed change would give employees more protection in situations where a job location may not be feasible or desirable for the employee.
Uncertainty surrounds AB 647
Regardless of the proposed changes in AB 647, there is much uncertainty surrounding the bill’s progression and potential future consideration by the Governor. As of this writing, the bill is still in its early stages, and it is likely that it will not be known until the end of the legislative session in September whether it will be sent to the Governor for consideration.
AB 647 presents potential changes to California’s grocery store industry that could have significant impacts on both employers and employees. With opposition from major organizations and remaining uncertainty around the bill’s path forward, it will be crucial for California’s grocery store industry to monitor the situation closely and understand the potential impacts on their businesses.