On Tuesday, the U.S. Supreme Court rejected an appeal by California grocery store owners, who challenged the authority of cities to enact ordinances that protect workers from being immediately fired when a grocery store changes ownership.

Last summer, HR Watchdog blogged on the California Supreme Court’s decision to uphold a Los Angeles ordinance that forbids new owners of large grocery stores from laying off non-managerial employees for 90 days after the new ownership takes over.

After the California Supreme Court decision, the California Grocers Association (CGA) appealed to the nation’s high court to review the case. The CGA argued, in part, that the National Labor Relations Act pre-empts cities from enacting these ordinances. The CGA also argued that the ordinance violates owners' negotiating rights by forcing them take on workers that they did not choose and grant benefits and terms of employment that the employer did not agree to. 

The U.S. Supreme Court rejected the plea for review. This was the final avenue for appeal, and grocery store owners in Los Angeles must follow the ordinance.

The Los Angeles ordinance requires:

• The prior owner to prepare a list of non-managerial employees with at least six months employment.
• The new owner to hire from that list during the 90-day transition period.
  The new owner to only discharge the hired employees “for cause” during the transition period.
• The new owner to prepare a written evaluation of each employee’s performance at the end of the transition period.  
• The new owner to consider offering continued employment if the employee’s performance is satisfactory.

The ordinance does provide that if the workforce is unionized, the union and the employer can agree on alternative hiring arrangements.

Similar ordinances for grocery workers and other fields of employment, such as hotel workers, are in effect in other California cities.

Author: Gail Cecchettini Whaley, CalChamber Employment Law Editor/Staff Counsel

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