One of the dumbest things the Los Angeles City Council has done in recent years was to pass the grocery worker retention ordinance.
That was the gem enacted more than 3 & #733; years ago that said if a big grocery were sold in Los Angeles, the new owner would have to retain all the workers on the payroll for at least 90 days.
On the face of it, that’s dumb. For the city to presume to tell a private-sector company whom it must employ is not much different from a city cop instructing a home buyer that he couldn’t change the landscaping for 90 days after closing.
Obviously, there was a good chance that the ordinance would be challenged and would be declared unconstitutional. Indeed, a challenge was filed by the California Grocers Association, and a Los Angeles County Superior Court judge early last year ruled against the ordinance. The city appealed. That was another dumb decision. A week and a half ago, a three-judge state appeals panel declared the ordinance null and void.
How much did all that cost? The City Attorney’s Office said that defending the ordinance really didn’t cost anything because they didn’t hire outside attorneys; only city staff lawyers worked on it. It’s the old argument that if the staff lawyers hadn’t worked on that case, they’d have worked on something else.
Well, maybe it’s just me, but I wished they had worked on something else. Maybe on ways to help the city attract and help businesses instead of working to defend an ordinance that stabs businesses in the back.
That leads to the worst part, which is the message the ordinance sent to businesses. It’s not subtle. It’s this: stay out.
By signaling that the city believes it has the right to boss around incoming grocers, the city probably scared off some potential buyers. The grocer must think: “Gee, if it’s 90 days now, will the city change its mind tomorrow and make it 180 days? Or a year?” (Actually, the City Council did discuss that possibility when deliberating the ordinance.) Other retailers thinking about moving into Los Angeles must have worried if they were next. (Actually, the council discussed that, too.)
Dale Stern, the Grocers Association’s lawyer, said he got calls from potential grocery buyers wanting to know how the ordinance worked because they were concerned about it. He can’t say for certain that the ordinance killed any deals, but no deals were made that he knows of.
Why was the city so doggedly determined to pass and defend this stupid ordinance anyway? Supposedly, it was for safety. Apparently the City Council believes there’s no possible way a new store employee could safely stack cans of corn.
No, the real motive was to help labor unions. That’s evident because the ordinance exempted grocers covered by collective bargaining agreements (a union store could buy another union store), and because the Los Angeles Alliance for a New Economy, which is a union advocacy group with strong ties to the city administration, was an intervener that helped the city defend the ordinance.
What’s more, the 90-day provision was no accident. Under labor law, an incoming employer who keeps a majority of the old union employees for 90 days can get stuck with the union.
The time has come for City Council members and the mayor to face their union supporters, turn their palms up, and say: “Hey, we tried. We can’t do any more.”
And the new city attorney, Carmen Trutanich, should stop his deliberations on whether to appeal the decision of 10 days ago. He should let the ruling stand and turn his lawyers loose to work on something constructive.
Enough time and money has been spent on this stupid ordinance. And the destructive message has been heard in the business community.
Charles Crumpley is editor of the Business Journal. He can be reached at
[email protected].
