California has had a handful of bills in recent years that discuss the process for hiring employees when there is a change in ownership or control.  There is another bill pending pertaining specifically to grocery stores that experience a change in control. Assembly Bill (AB) 647 would amend certain requirements upon a change in control of a grocery establishment.

The California Chamber of Commerce, the California Grocers Association, and the California Retailers Association have submitted opposition to the bill, stating, “In 2015, AB 359 was signed into law, which added protections for grocery workers from being laid off for 90 days after a store changes ownership through consolidation, merger, or reorganization. AB 647 seeks to extend the timelines in AB 359 by 40 days and include distribution centers, with no supporting data to show this change is needed for the transfer of information or the protection of employees. The most recent amendments to AB 647 create a rebuttable presumption in favor of an employee, sets arbitrary standards for the reinstatement of employees, and create significant litigation risks for the grocery industry, including the addition of punitive damages.”

Under the current law, upon change of control of a grocery store, the incumbent employer has 15 days after the execution of the agreement affecting the change in control to provide the successor employer with a list of eligible grocery workers.  The successor employer is required to maintain a preferential hiring list of eligible workers and to hire from that list for 90 days after the grocery store is fully operational and open to the public. The successor grocery employer must retain each eligible worker for at least 90 days after the commencement date.  

To be an eligible worker, the worker must have been primarily employed by the incumbent employer for at least 6 months prior to execution of the agreement affecting the change in control unless the worker is a “separated employee.”  Separated employees must have been separated from employment for certain non-disciplinary reasons prior to the change in control and satisfy other requirements.  Eligible workers do not include managerial, supervisory, or confidential employees.

AB 647 would extend the timeline for hiring from the list of eligible workers to 120 days after the grocery store is fully operational and require the successor employer to retain each eligible worker it hires for at least 120 days after each worker’s commencement date unless the successor employer determines during the 120-day period that it requires fewer eligible grocery workers.

The bill also would require an incumbent grocery employer to provide the list of eligible grocery workers to any collective bargaining representatives and would require the incumbent grocery employer to add the eligible workers’ cellular telephone numbers and email addresses, if known, to the list of information already required to be provided to the successor grocery employer.

The bill would authorize a successor grocery store employer to obtain the list of eligible grocery workers from a collective bargaining representative if the incumbent grocery employer does not provide the information within 15 days.

The bill would grant a worker who is offered a position that is more than 15 miles from their place of residence the right to refuse an offer without a loss of seniority and would grant a separated employee a right to recall based on seniority before hiring any new employees for one year.

This bill is still in the early stages and it is likely it will not be  know until the end of the legislative session in September whether it will be sent to the Governor for consideration.

Jackson Lewis will continue to track legislation that impacts California employers. If you have a question about this bill or related issues, please contact a Jackson Lewis attorney with whom you regularly work.