CGA Battles Employee-Retention Law

SACRAMENTO, Calif. The California Grocers Association here has received judicial approval to proceed to trial with a lawsuit challenging a Los Angeles ordinance that requires buyers of supermarkets to retain existing employees for up to 90 days. That ordinance was passed by the Los Angeles City Council in late 2005 and implemented last February, followed by passage of similar laws in three other California

SACRAMENTO, Calif. — The California Grocers Association here has received judicial approval to proceed to trial with a lawsuit challenging a Los Angeles ordinance that requires buyers of supermarkets to retain existing employees for up to 90 days.

That ordinance was passed by the Los Angeles City Council in late 2005 and implemented last February, followed by passage of similar laws in three other California cities: San Francisco, Santa Monica and Gardena.

“This law prevents a new owner from bringing in his own employees to present his style of operations to consumers,” Peter Larkin, CGA president, told SN.

“It also has the potential to discourage investment in supermarkets within L.A. County, which would limit shopping choices, especially among working families in economically disadvantaged communities.”

Larkin said the ordinance has apparently halted ownership changes in Los Angeles since it was implemented.

(The sale of Albertsons to Supervalu last June does not fall under the restrictions imposed by the law, he pointed out, because it involved a stock sale to an owner with no stores in the area rather than an instance of an existing employer buying another location.)

The association's lawsuit, filed last May and amended in July, claims the ordinance is unlawful and unenforceable “because it is preempted by federal labor relations laws, violates the equal protection rights of employers, conflicts with state food-related health and safety laws and improperly dictates rules of employment.”

In his ruling, Judge Ralph W. Dau of Los Angeles County Superior Court said CGA had laid out “sufficient facts to state a cause of action for a declaration as to the constitutionality of the ordinance.”