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Monday, Oct 3, 2022
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Nonunion Supermarkets May Shelve Inner-City Sites

Now that L.A.’s grocery worker retention ordinance has withstood a U.S. Supreme Court appeal, nonunion grocery store chains may find it more difficult to expand in the inner city.

“Nonunion grocery companies will not want to purchase existing stores and pick up those particular employees,” said Dave Heylen, spokesman for the California Grocers Association. “This will hit the inner city especially hard, since nonunion independent stores are often the first to enter these markets in a significant way.”

The U.S. Supreme Court last week declined to review an appeal from grocery store owners to overturn worker retention ordinances in Los Angeles and other California cities.

The ordinances are designed to protect workers, especially union members, from being fired when their company changes owners. They require new owners of grocery chains to retain existing workers, usually for 90 days.

Under federal labor law, a new owner is obligated to open union negotiations with existing union employees if they’ve remained employed for 90 days after a changeover.

Store owners, represented by the Grocers Association, sued to block the 2005 L.A. ordinance, arguing that it denied owners their federal right to hire their own employees unless they agree to maintain a unionized work force.

With legal remedies exhausted, the L.A. ordinance and similar ordinances in San Francisco, Gardena and Santa Monica now take effect. The ordinances were on hold pending the latest appeal.

Typically, Heylen said, when small chains of independent grocers seek to expand in the inner city, they buy existing stores because it’s difficult to find enough space to build sizable new stores.

As a result, he said the L.A. worker retention ordinance could impede progress on another goal of many local lawmakers and activists: getting more healthy and affordable food options into the inner city.

“Our industry and community health groups have long been working to bring more stores into these underserved areas,” he said. “First lady Michelle Obama is due to come out to Southern California to recognize one of these programs funded in part by the California Endowment. It’s really bad timing with this ordinance now taking effect.”

The L.A. city ordinance was passed on an 11-2 City Council vote in late 2005. It requires new owners of grocery chains to retain workers for 90 days after a change of ownership. The ordinance was specifically aimed at protecting unionized workers at Albertsons Inc. from being fired if a pending buyout offer from nonunion companies went forward. That buyout attempt subsequently collapsed.

Other California cities, including San Francisco, Gardena and Santa Monica, have since adopted similar ordinances. Oakland and Berkeley have considered adopting worker retention ordinances.

The Grocers Association convinced lower court judges to block the L.A. ordinance from taking effect. The judges said the ordinance encroached on federal authority over labor laws. However, last year, the state Supreme Court ruled 6-1 to uphold the ordinance because the majority of justices ruled that federal labor laws do not give employers an unlimited right to hire employees of their choosing.

The Grocers Association then filed an appeal with the U.S. Supreme Court, hoping that a conservative majority that often sides with businesses would overturn the L.A. ordinance or send it back for reworking. When the Supreme Court last week announced that it had declined to hear the case, that meant the state Supreme Court ruling stands.

Heylen said that there are no efforts planned at this time to seek to alter any of the ordinances or to enact state legislation that would reduce the impact of the ordinances on grocery store owners.

Howard Fine
Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.
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