Jan 1

The Grocery Worker Retention Law Hits the Aisles

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Over 380,000 California supermarket employees are about to get a super deal with the state’s Grocery Worker Retention Law (GWRL). Effective January 1, 2016, the GWRL will protect all “eligible grocery workers” who work for a major supermarket or even a smaller grocery store after such a store executes a document effecting a reorganization, merger, or other change in the store’s control. If any employer violates the GWRL, an eligible grocery worker might need not one, but two, bags to carry out his lawsuit winnings.

I. Coverage of the Grocery Worker Retention Law

The GWRL covers any retail store that: (1) is over 15,000 square feet; (2) sells “primarily household foodstuffs for offsite consumption”; (3) executes a purchase agreement or other document effecting a “change in control”; and (4) hasn’t ceased operations for at least six months before the change in control.1 The law deems a change of control to occur after a sale or other disposition of substantially all of the assets or a controlling interest, including by consolidation, merger, or reorganization, of an “incumbent grocery employer” or any person who controls the incumbent or any store under the operation or control of either the incumbent or person who controls the incumbent.2

Even if the GWLR would otherwise cover a store, the law exempts any store located in an area that the U.S. Department of Agriculture has designated as a “food desert.” That’s “desert,” not “dessert,” so-called because the area is “barren” of stores that sell affordable or nutritious food. The GWLR tries to encourage food deserts to become food oases by exempting a store if: (1) more than six years have passed since it has been located in the food desert; and (2) the store stocks, and during normal business hours sells, fresh fruit and vegetables in a quantity and quality comparable to what it sells in its three geographically closest stores outside of the food desert.3

II. Duties of Grocery Employers After a Change of Control

A. Duties of Incumbent Grocery Employers

The GWRL requires an incumbent to turn over a list of names, addresses, dates of hire, and employment occupation classifications of all eligible grocery workers (EGWs) to a “successor grocery employer” within 15 days after the execution of a purchase agreement or other change-in-control document.4 The GWRL defines an “EGW” as any individual who: (1) has worked “primarily” at the store subject to the change in control; (2) has worked for the incumbent for at least six months before the execution of the change-in-control document; and (3) isn’t a managerial, supervisory, or confidential employee.5 The law is unclear as to whether the six-month period means 180 workdays or any 180-day period.

The incumbent must post a notice of the change in control at the location of the affected store within five business days after the incumbent and successor execute the change-in-control document. The notice must stay up during any store closure and until the store is fully operational and open to the public under the successor grocery employer.6 The notice must include the name of the incumbent and its contact information, the name of the successor and its contact information, and the effective date of the change in control.7 The incumbent must post the notice in a conspicuous place at the store in such a manner that EGWs and other employees, customers, and members of the public can readily view it.8

B. Obligations of Successor Grocery Employers

The GWRL requires a successor to maintain the list of EGWs who the incumbent has identified and to hire from that list for a period beginning upon the execution of the transfer document and continuing for 90 days after the store is fully operational and open to the public under the successor.9 The successor must retain written verification of any offer of employment that the successor has made to any EGW for at least three years after the date of the offer.10 (Presumably, the successor must keep a record of an offer even if the EGW rejects it.) The verification must include the worker’s name, address, date of hire, and employment occupation classification.11

The GWRL imposes further obligations on a successor during the 90-day transition period. The successor must generally retain each EGW for at least 90 days after his re-hire date.12 The successor can’t fire any EGW without cause during that period.13 That doesn’t mean the successor can’t lay off EGWs during that period, but if it does, it must retain them by seniority within each job classification to the extent that comparable classifications exist or according to a relevant collective bargaining agreement.14 Thus, if a successor wants to replaces five of six cashiers with five self-checkout machines, whichever of those six cashiers has worked at the store the longest gets a 90-day reprieve.

The GWRL doesn’t guarantee an eligible grocery worker a job once the 90-day period ends. But workers don’t necessarily lose all their rights when the 90-day period ends. The successor must evaluate the performance of each eligible grocery worker when the 90-day period ends.15 The evaluation must be in writing.16 If the eligible grocery worker’s performance during the 90-day period is “satisfactory,” the successor must at least “consider” offering to continue his employment under the terms and conditions that the successor has established and that the law requires.17 The successor must retain a record of the performance evaluation for at least three years.18

III.  Remedies for Violations of the Grocery Workers Retention Law

The GWRL doesn’t directly provide a remedy for when an incumbent or successor violates an EGW’s rights. But an employee can file an action under the Labor Code Private Attorney General Act (PAGA) for any violation of the GWRL  (other than an incumbent’s violation of its notice obligations) and recover civil penalties on behalf of the State of California. EGWs can recover default civil penalties of $100 per aggrieved employee per pay period for an initial violation and $200 per aggrieved employee per pay period for each subsequent violation.19 Moreover, prevailing EGWs, but not prevailing employers, can recover mandatory awards of attorney’s fees and litigation expenses.20 

The GWRL doesn’t preempt local ordinances that provide equal or greater protection of EBWs.21 For example, Los Angeles and Santa Monica have ordinances that are identical to the GWRL, but  they provide extensive remedies: (1) an order for his 90-day retention or reinstatement (essentially restarting the 90-day period for that particular EGW); (2) front or back pay for each day during which a violation continues; (3) the value of benefits he would’ve received under the successor’s benefit plan; (4) reasonable attorneys’ fees and litigation expenses.22 (The ordinances also define “retaliatory action,” but unfortunately, the L.A. and Santa Monica City Councils appear to have deleted the sections prohibiting it.))

  1. Lab. Code §2502(d). 

  2. Lab. Code §2502(a). 

  3. Lab. Code §2516. 

  4. Lab. Code §2504(a). 

  5. Lab. Code §2502(b). 

  6. Lab. Code §2508(a). 

  7. Lab. Code §2508(b). 

  8. Lab. Code §2508(c). 

  9. Lab. Code §2504(b). 

  10. Lab. Code §2504(c). 

  11. Id

  12. Lab. Code §2506(a). 

  13. Lab. Code §2506(c). 

  14. Lab. Code §2506(b). 

  15. Lab. Code §2506(d). 

  16. Id

  17. Id

  18. Id

  19. Lab. Code §2699(f)(2). 

  20. Lab. Code §2699(g)(1). 

  21. Lab. Code §2520. 

  22. SMMC 5.40.050; 23 LAMC 181.05. 

Ben Rothman, Esq.

Ben Rothman is a Los Angeles-based attorney practicing in the areas of personal injury, employment, and workers' compensation on a "no recovery, no fee" basis. Call him at (424) 465-2948 for a free, no-obligation consultation.