BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 359|
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THIRD READING
Bill No: AB 359
Author: Gonzalez (D), et al.
Amended: 5/18/15 in Assembly
Vote: 21
SENATE LABOR & IND. REL. COMMITTEE: 4-1, 6/24/15
AYES: Mendoza, Jackson, Leno, Mitchell
NOES: Stone
ASSEMBLY FLOOR: 46-27, 5/26/15 - See last page for vote
SUBJECT: Grocery workers
SOURCE: Community Food and Justice Coalition
Roots of Change
United Food and Commercial Workers Western States
Council
DIGEST: This bill establishes a worker retention requirement,
upon a change in control of a grocery establishment, that
requires an incumbent employer to prepare a list of specified
eligible grocery workers for a successor grocery employer, and
requires the successor grocery employer to hire from this list
during a 90-day transition period. This bill requires the
successor grocery employer to retain eligible grocery workers
for a 90-day period, prohibits the successor grocery employer
from discharging those workers without cause during that period,
and, upon the close of that period, requires the successor
grocery employer to consider offering continued employment to
those workers.
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ANALYSIS:
Existing law:
1)Establishes the Displaced Janitor Opportunity Act (The Act)
which requires contractors and subcontractors that are awarded
contracts or subcontracts by an awarding authority to provide
janitorial or building maintenance services, to follow
specified procedures when a service contract is being
terminated.
2)Requires the terminated contractor, within three working days
after notification by the awarding body of the termination of
the contract, to provide to the successor contractor, the
name, date of hire, and job classification of each employee
employed at the site or sites covered by the terminated
service contract at the time of the contract termination.
3)Requires that the successor contractor or subcontractor do the
following:
a) Retain, for a 60-day transition period, employees who
have been employed by the terminated contractor, if any,
for the preceding four months or longer unless the
successor employer has reasonable and substantiated cause
not to hire a particular employee based on his/her
performance or conduct while working under the terminated
contract.
b) During the initial 60-day transition employment period,
the successor employer shall not discharge without cause
any retained employee. Cause shall be based only on the
performance or conduct of the employee.
c) At the end of the 60-day transition period, the
successor employer shall provide a written performance
evaluation to each employee retained. If the employee's
performance is satisfactory, the successor contractor or
subcontractor shall offer the employee continued employment
(made in writing) which shall be at-will employment.
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d) Nothing in The Act requires that the successor
contractor or subcontractor pay the same wages or offer the
same benefits as were provided by the prior contractor or
prior subcontractor.
4)Provides that an employee who was not offered employment or
who has been discharged in violation of The Act may bring an
action against a successor employer in any superior court of
the state having jurisdiction and seek back pay, as specified,
as well as reasonable attorneys' fees and costs.
5)Requires, in the public transit industry, an awarding body to
give a 10 percent bid preference to a bidder who agrees to
retain the employees of the prior contractor for a period of
not less than 90 days. Similarly, the successor contractor or
subcontractor is required to make a written offer of
employment to each employee to be rehired. The wages and
benefits do not need to be at the same level as those provided
by the previous contractor or subcontractor and an aggrieved
employee may bring an action against the successor employer in
any superior court having jurisdiction.
This bill:
1)Establishes a worker retention requirement for the change in
ownership or control of grocery establishments, as specified.
2)Requires an incumbent grocery employer to provide to the
successor grocery employer the name, address, date of hire,
and employment occupation classification of each eligible
grocery worker.
3)Requires the successor grocery employer to maintain a
preferential hiring list of eligible grocery workers. The
successor grocery employer shall retain each eligible grocery
worker hired from the list for a period of at least 90 days
during which the eligible grocery workers shall be employed
under the terms and conditions established by the successor
and pursuant to the terms of a relevant collective bargaining
agreement, if any.
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4)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.
5)Provides that during the 90-day transition employment period,
the successor grocery employer shall not discharge without
cause an eligible worker.
6)Requires, at the end of the 90-day transition period, the
successor grocery employer to make a written performance
evaluation for each grocery worker. If the worker's
performance is satisfactory, the successor grocery employer
shall consider offering continued employment under the terms
and conditions established by the successor and as required by
law.
7)Requires the incumbent employer to post public notice of the
change in control that must include the name and contact
information of the successor employer and the effective date
of the change in control, as specified.
8)Defines, among others, the following terms:
a) "Grocery establishment" means a retail store that is
over 15,000 square feet in size and that sells primarily
household foodstuffs for offsite consumption, as specified.
b) "Eligible grocery worker" means individuals whose
primary place of employment is at the grocery establishment
and who have worked for the incumbent grocery employer for
at least six months prior to the transfer. However, it
excludes managerial, supervisory or confidential employees.
c) "Change in control" means any sale, assignment,
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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.
9)Exempts grocery establishments that will be located in
geographic areas designated by the U.S. Department of
Agriculture as a "food desert," as specified.
Background
Wages and Working Conditions of Food Retail Workers. A 2014
study by the Food Labor Research Center at U.C. Berkeley
(commissioned by the United Food and Commercial Workers) titled,
"Shelved: How Wages and Working Conditions for California's Food
Retail Workers Have Declined as the Industry has Thrived," made
the following findings, "California's food retail industry has
shown consistent and robust growth in sales and employment, with
employment growing faster than in the economy overall. Between
2000 and 2011, the number of grocery stores in California - the
largest segment of food retail establishments in the state-
increased by 5%, from 9,893 to 10,403. California's food retail
industry paid workers $7.7 billion in 2011, and generated gross
revenue of $98.2 billion in 2013?.While California food retail
industry employment has grown in the past decade, food retail
workers' wages have declined. According to Census data, in 2010
dollars, median hourly wages of grocery store workers - the
largest segment of food retail workers - fell from $12.97 in
1999 to $11.33 in 2010, a decline of 12.6%. Moreover, the
proportion of food retail workers earning poverty wages
increased dramatically, from 43% in 1999 to 54% in 2010. This
means that in 2010, more than half of all California food retail
workers earned less than the hourly wage needed to reach an
annual income of $22,458, the minimum income necessary to
provide them with a low standard of living for a family of three
in the Western U.S. if they worked full-time for the full year
(2,080 hours)."
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Local Ordinances on the Issue. In December 2005, the City of Los
Angeles adopted the Grocery Worker Retention Ordinance which
required that grocery stores of a specific size (15,000 sq. ft.
or larger) that undergo a change of ownership to do the
following during a 90-day transition period:
1)The incumbent owner must prepare a list of employees with at
least six months' employment as of the date of transfer in
ownership, and the successor employer must hire from that list
during the transition period.
2)During the 90 days, the employees may be discharge only for
cause.
3)At the conclusion of the 90 days, the successor employer must
prepare a written evaluation of each employee's performance.
4)If the employee's performance is satisfactory, the employer
must consider offering continued employment.
5)If the workforce is unionized, however, the union and the
employer may agree on terms that supersede the Ordinance.
The California Grocers Association filed a complaint against the
City of Los Angeles. The case was appealed and a final decision
by the Supreme Court of California was issued on July 18, 2011,
stating that the 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. The court also
concluded that the ordinance was fully consistent with both
state and federal equal protection clauses. California Grocers
Association v. City of Los Angeles, 52 Cal. 4th 177 (2011).
This worker retention approach is also 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 substantially similar worker retention
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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). Additionally, similar worker retention
requirements can be found throughout the United States including
New York City (building service workers), Philadelphia (service
contract workers), Providence, Rhode Island (hospitality and
building service workers), and D.C. (health care, food service,
and janitorial workers).
Prior Legislation
AB 350 (Solorio, 2011) would have renamed the Displaced Janitor
Opportunity Act the Displaced Property Service Employee
Opportunity Act and would have extended those provisions of the
act to property services, which included licensed security,
building maintenance, window cleaning, and food cafeteria
services. AB 350 failed passage on the Senate Floor.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified6/24/15)
Community Food and Justice Coalition (co-source)
Roots of Change (co-source)
United Food and Commercial Workers Western States Council
(co-source)
American Federation of State, County and Municipal Employees
California Labor Federation, AFL-CIO
California Professional Firefighters
California Rural Legal Assistance Foundation
California School Employees Association
California Teamsters Public Affairs Council
Food Chain Workers Alliance
Hunger Action Los Angeles
Los Angeles Alliance for a New Economy
North Valley Labor Federation
Orange County Communities for Responsible Development
Orange County Labor Federation, AFL-CIO
Partnership for Working Families
Service Employees International Union
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Tri-Counties Central Labor Council
UFCW Golden State Local 8
UFCW Local 135
UFCW Local 324
UFCW Local 648
UFCW Local 770
UFCW Local 1167
UFCW Local 1428
UFCW Local 1442
Western Center on Law & Poverty
OPPOSITION: (Verified6/24/15)
Building Owners and Managers Association of California
California Business Properties Association
California Chamber of Commerce
California Grocers Association
California Retailers Association
Camarillo Chamber of Commerce
Chamber Alliance of Ventura and Santa Barbara Counties
East Valley Business Legislative Advocacy Committee
El Centro Chamber of Commerce and Visitors Bureau
Family Business Association
Fullerton Chamber of Commerce
International Council of Shopping Centers
NAIOP - Commercial Real Estate Development Association
Orange Chamber of Commerce
Oxnard Chamber of Commerce
Rancho Cordova Chamber of Commerce
Redondo Beach Chamber of Commerce
San Diego Regional Chamber of Commerce
San Jose Silicon Valley Chamber of Commerce
Santa Maria Chamber of Commerce Visitors and Convention Bureau
South Bay Association of Chambers of Commerce
Southwest California Legislative Council
Torrance Area Chamber of Commerce
ARGUMENTS IN SUPPORT: According to the author, there are
currently no state-level protections for grocery workers who can
be terminated, through no fault of their own, when
billion-dollar grocery store corporations merge together to
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generate more profits. Proponents argue that a change of workers
raises public health concerns since the effects are carried over
to the grocery store's clientele. They argue that experienced
workers possess valuable knowledge and skills regarding proper
sanitation procedures and local/state health regulations to
ensure high standards of food safety. AB 359 will allow grocery
workers 90 days to work at the successor grocery store, which
allows a reasonable amount of time for the successor employer to
hire them if they are satisfied with their performance or for
the employee to pursue employment elsewhere.
ARGUMENTS IN OPPOSITION: Opponents argue that this bill
unfairly forces grocery employers to hire a predecessor's
employees, undermines the at-will employment presumption in
California, ensures continued union representation and subjects
employers to litigation. They argue that under the federal
"successor employer" doctrine, a subsequent employer who intends
and voluntarily chooses to (1) hire the majority of its
predecessor's employees and (2) is generally in the same
business must recognize the incumbent union and bargain with it
in good faith. NLRB v. Burns Int'l Security Services, Inc., 406
U.S. 272, 281 (1972). Because this bill mandates subsequent
employers to hire the predecessor's employees for at least the
90-day retention period and, thereafter, only terminate such
employees for unsatisfactory performance committed during the
90-day period, it limits a successor employer's ability to
voluntarily choose its workforce, thereby triggering the
successor employer doctrine - essentially forcing an employer to
offer continued employment to the predecessor's workforce
ensuring recognition of the incumbent union.
Similarly, they argue that this bill forces employers to adhere
to terms of a contract to which it is not a party. This bill
requires that employees be retained according to the "terms and
conditions" established by the successor grocery employer and
pursuant to the terms of a relevant collective bargaining
agreement (CBA), thereby forcing the successor employer to abide
by these contractual provisions, even though the successor
employer is not actually a party to that CBA.
ASSEMBLY FLOOR: 46-27, 5/26/15
AYES: Alejo, Bonilla, Bonta, Burke, Calderon, Campos, Chau,
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Page 10
Chiu, Chu, Cooper, Dababneh, Daly, Dodd, Frazier, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Roger Hernández, Holden, Irwin, Jones-Sawyer,
Lopez, Low, McCarty, Medina, Mullin, Nazarian, O'Donnell,
Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Santiago, Mark
Stone, Thurmond, Ting, Weber, Williams, Wood, Atkins
NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Brown,
Chang, Cooley, Dahle, Beth Gaines, Gallagher, Grove, Hadley,
Jones, Kim, Lackey, Levine, Maienschein, Mayes, Melendez,
Obernolte, Olsen, Patterson, Steinorth, Wagner, Waldron, Wilk
NO VOTE RECORDED: Bloom, Chávez, Eggman, Harper, Linder,
Mathis, Salas
Prepared by:Alma Perez / L. & I.R. / (916) 651-1556
7/13/15 9:55:15
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