BILL ANALYSIS                                                                                                                                                                                                    ”

                                                                       AB 359

                                                                      Page  1


          359 (Gonzalez)

          As Amended  May 14, 2015

          Majority vote

          |Committee       |Votes |Ayes                |Noes                  |
          |                |      |                    |                      |
          |                |      |                    |                      |
          |Labor           |5-2   |Roger HernŠndez,    |Harper, Patterson     |
          |                |      |Chu, Low, McCarty,  |                      |
          |                |      |Thurmond            |                      |
          |                |      |                    |                      |
          |Judiciary       |7-3   |Mark Stone, Alejo,  |Wagner, Gallagher,    |
          |                |      |Chau, Chiu,         |Maienschein           |
          |                |      |Cristina Garcia,    |                      |
          |                |      |Holden, O'Donnell   |                      |
          |                |      |                    |                      |
          |                |      |                    |                      |

          SUMMARY:  Establishes a worker retention requirement for the  
          change on ownership or control of grocery establishments, as  
          specified.  Specifically, this bill:

          1)Defines "grocery establishment" as a retail store that is over  
            15,000 square feet in size and that sells primarily household  


                                                                       AB 359

                                                                      Page  2

            foodstuffs for offsite consumption, as specified.
          2)Defines "incumbent grocery employer" as the person that owns,  
            controls, or operates a grocery establishment at the time of a  
            change in control.

          3)Defines "successor grocery employer" as the person that owns,  
            controls, or operates a grocery establishment after a change in  

          4)Defines "eligible grocery worker" to mean any individual whose  
            primary place of employment is at the grocery establishment  
            subject to a change in control and who has worked for the  
            incumbent grocery employer for at least six months prior to the  
            execution of the transfer document.  "Eligible grocery worker"  
            does not include a managerial, supervisory, or confidential  

          5)Defines "change in control" to mean any sale, assignment,  
            transfer, contribution, or other disposition of all or  
            substantially all of the assets or a controlling interest,  
            including by consolidation, merger, or reorganization, of the  
            incumbent grocery employer or any person who controls the  
            incumbent grocery employer or any grocery establishment under  
            the operation or control of either the incumbent grocery  
            employer or any person who controls the incumbent grocery  

          6)Requires an incumbent grocery employer, within 15 days after the  
            execution of the transfer document, to provide to the successor  
            grocery employer the name, address, date of hire, and employment  
            occupation classification of each eligible grocery worker.

          7)Requires the successor grocery employer to hire from the  
            aforementioned preferential hiring list for a period beginning  


                                                                       AB 359

                                                                      Page  3

            upon execution of the transfer document and continuing for 90  
            days after the grocery establishment is fully operational and  
            open to the public under the successor grocery employer.

          8)Requires a successor grocery employer to retain each eligible  
            grocery worker hired from the preferential hiring list for a  
            period of at least 90 days after the eligible grocery worker's  
            employment commencement date.  During this 90-day transition  
            employment period, eligible grocery workers shall be employed  
            under the terms and conditions established by the successor  
            grocery employer and pursuant to the terms of a relevant  
            collective bargaining agreement, if any.

          9)Provides that if the successor grocery employer determines that  
            it requires fewer workers than were required by the incumbent  
            grocery employer, it shall retain workers by seniority within  
            each job classification, as specified.

          10)Provides that during the 90-day transition employment period,  
            the successor grocery employer shall not discharge without cause  
            an eligible grocery worker.

          11)Provides that at the end of the 90-day transition employment  
            period, the successor grocery employer shall make a written  
            performance evaluation for each eligible grocery worker.  If the  
            worker's performance during the 90-day period is satisfactory,  
            the successor grocery employer shall consider offering the  
            worker continued employment under the terms and conditions  
            established by the successor grocery employer and as required by  

          12)Requires the incumbent grocery employer to post public notice  
            of the change in control, as specified.


                                                                       AB 359

                                                                      Page  4

          13)Authorizes an eligible grocery worker to bring a civil action  
            against the incumbent grocery employer or the successor grocery  
            employer for violations of these requirements, and authorizes  
            the worker to be awarded hiring and restatement rights, front  
            pay or back pay, the value of benefits the worker would have  
            received, attorney's fees and costs, as specified.

          14)Specifies that parties subject to this bill may, by collective  
            bargaining agreement, provide that the agreement supersedes the  
            requirements of this bill.

          15)Provides that this bill shall not apply to grocery  
            establishments that will be located in geographic areas  
            designated by the United States Department of Agriculture as a  
            "food desert," as specified, provided that both of the following  

             a)   More than six years have elapsed since the most recent  
               grocery establishment was located in the area designated as a  
               food desert.
             b)   The grocery establishment stocks and during normal  
               business hours sells fresh fruits and vegetable in amounts  
               and of a quality that is comparable to what the establishment  
               sells in its three geographically closest stores, which are  
               located outside of the food desert.

          16)Specifies that this bill does not preempt any city, county, or  
            city and county ordinances that provide greater protection to  
            eligible grocery workers.
          17)Establishes specified recordkeeping requirements for the  
            incumbent grocery employer and successor grocery employer to  
            document compliance with these requirements.


                                                                       AB 359

                                                                      Page  5

          18)Makes other related changes.

          19)Makes related legislative findings and declarations.

          FISCAL EFFECT:  None.  This bill is keyed non-fiscal by the  
          Legislative Counsel.

          COMMENTS:  This bill is sponsored by the United Food and  
          Commercial Workers Union Western States Council (UFCW) and would  
          establish a worker retention requirement for specified grocery  
          establishments.  UFCW indicates that this measure is modeled after  
          a grocery worker retention ordinance enacted by the City of Los  
          Angeles in 2005.  In 2011, the California Supreme Court held that  
          the Los Angeles ordinance was not preempted as intruding upon  
          either matters of health and safety already regulated by the state  
          or matters of employee organization and collective bargaining  
          fully occupied by federal labor law.  California Grocers  
          Association v. City of Los Angeles, 52 Cal. 4th 177 (2011).  The  
          court also concluded that the ordinance was fully consistent with  
          both state and federal equal protection clauses.  Id.

          In addition, UFCW contends that this approach is consistent with  
          other grocery worker retention ordinances adopted in the City and  
          County of San Francisco, the City of Santa Monica, and the City of  
          Gardena, as well as worker retention ordinances for other  
          industries adopted in the City of San Jose (airport workers), the  
          City of Oakland (hospitality workers), the City of Emeryville  
          (hotel workers), and the City of Berkeley (marina workers). 

          The sponsor argues that, as the largest provider of food to the  
          nation, California should provide workers who sell groceries good  
          jobs - jobs that will allow their families to purchase and enjoy  
          that food themselves, and allow them to work in an appropriately  
          staffed, healthy, and safe environment. Retailers that offer  


                                                                       AB 359

                                                                      Page  6

          workers such an environment are the most successful in California;  
          others should follow their example.

          A coalition of employers, including the California Chamber of  
          Commerce, oppose this bill and argues that it unfairly forces  
          grocery employers to hire a predecessor's employees, undermines  
          the at-will employment presumption in California, and ensures  
          continued union representation.

          Primarily, they argue that this bill denies employers the basic  
          choice of whom to hire in their workforce.  Absent unlawful  
          conduct by the employer such as discrimination or retaliation, the  
          choice of whom an employer wants to hire and retain should be left  
          to the employer, not the government.  In addition, opponents argue  
          that this bill undermines the at-will presumption in order to  
          protect the incumbent union.  Similarly, opponents argue that this  
          bill forces an employer to adhere to terms of a contract to which  
          it is not a party.  

          In addition, the California Grocers Association states that their  
          experience with similar local ordinances has shown that similar  
          worker retention mandates have a chilling effect on commerce and  
          hamper efforts to transition current grocery businesses to new  
          ownership rather than close locations outright.

          Analysis Prepared by:                                               
          Ben Ebbink / L. & E. / (916) 319-2091  FN: 0000379


                                                                       AB 359

                                                                      Page  7