In a major victory for grocery store owners, a state appellate panel has upheld a lower court ruling that overturned a Los Angeles ordinance requiring new owners of grocery stores to retain existing workers for 90 days.

The three-judge panel issued its ruling late Thursday, saying that the city intruded into the state’s jurisdiction by passing the ordinance. The panel declared the ordinance null and void.

“We are pleased with the ruling. We felt we had a strong case that the ordinance was unconstitutional,” said Dave Heylen, vice president of communications for the California Grocers Association, which represented grocery store owners in the lawsuit.

Frank Mateljan, spokesman for new Los Angeles City Attorney Carmen Trutanich, said the city attorney’s office was reviewing the ruling and had not yet decided whether to appeal to the state Supreme Court or seek a rehearing in front of an appellate court panel.

The city ordinance, enacted in 2005, would have required the new owners of a grocery store chain to retain all current workers for at least 90 days; the ordinance cited a threat to health and safety if newer, less-trained workers were brought on board.

It was hastily crafted in response to reports at the time that the unionized Albertsons Inc. chain, with more than 300 stores in Southern California, was close to accepting a buyout offer. It was passed after a strong push by local unions and living wage advocates. It marked the first attempt by the city to regulate workforce issues at companies not doing business directly with the city.

But grocery store owners filed suit, arguing the ordinance was discriminatory because it applied only to larger stores or chains and because it exempted stores with collective bargaining agreements. They also contended that state law, which contains no worker retention requirements, trumps any locally enacted measure.

In Feb. 2008, Los Angeles County Superior Court Judge Ralph Dau ruled in favor of the grocery store owners, overturning the ordinance.