BILL ANALYSIS Ó AB 359 Page 1 ASSEMBLY THIRD READING AB 359 (Gonzalez) As Amended May 18, 2015 Majority vote ----------------------------------------------------------------- |Committee |Votes |Ayes |Noes | | | | | | | | | | | |----------------+------+--------------------+--------------------| |Labor |5-2 |Roger Hernández, |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 control. 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 employee. 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 employer. 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 law. 12)Requires the incumbent grocery employer to post public notice of the change in control, as specified. AB 359 Page 4 13)Specifies that parties subject to this bill may, by collective bargaining agreement, provide that the agreement supersedes the requirements of this bill. 14)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 apply: 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. 15)Specifies that this bill does not preempt any city, county, or city and county ordinances that provide greater protection to eligible grocery workers. 16)Establishes specified recordkeeping requirements for the incumbent grocery employer and successor grocery employer to document compliance with these requirements. 17)Makes other related changes. 18)Makes related legislative findings and declarations. FISCAL EFFECT: None. This bill is keyed non-fiscal by the Legislative Counsel. AB 359 Page 5 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 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 AB 359 Page 6 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: 0000447