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The city of West Hollywood, California, is considering legislation that would require a grocery store purchasing another grocery store to retain the employees of the old store for 90 days. If not all the employees are needed by the new owner, a list must be maintained of the previous employees and all new hires must first come from that list. The ordinance only applies to stores 15,000 square feet or larger.

The law is strikingly similar to one passed by the City of Los Angeles late last year, though unlike in Los Angeles, the West Hollywood City Council is considering applying its worker retention ordinance to all retailers, not just the grocery industry.

The California Grocers Association (CGA) has announced its opposition to the bill. “It is imperative retailers throughout California assist CGA by actively engaging in defeating this very dangerous ordinance,” said CGA President Peter Larkin “If left unchecked, cities throughout California will adopt similar ordinances. This is only the tip of the iceberg.”

CGA says that it opposes the ordinance for numerous reasons. Larkin says, “The ordinance discourages supermarkets from locating within city limits. Store owners will be more likely to sell to a non-grocery retailer instead of another supermarket in order to avoid the onerous provisions of the ordinance.”

CGA has made repealing the L.A. ordinance its No. 1 priority. “We are considering our options for a legal challenge and have enlisted allied associations both here and in Washington, DC in our fight,” said Larkin. “And because this issue stands to impact all retail, we will muster support from similar industries -restaurant, hotel/motel, etc. – as they stand to be next in the city’s cross hairs.

“This ordinance would be bad for the residents of West Hollywood and bad for business in general. Today it’s the grocery industry, what business will the city attempt to regulate in this manner tomorrow?”
KC's View:
While we understand the impetus behind the legislation, it seems to us that this is an area in which market forces take care of things all by themselves. A company buying a store or a group of stores will naturally want to keep the good employees who bolster the unit’s brand identity, and get rid of those who don’t. To force a company that is investing money in a business to keep deadwood is like asking them to put a match to their own future.

Now, that said, it should be acknowledged that there will be cases where a retailer will want to get rid of the experienced and more highly paid people in favor of younger and lower-paid personnel. We have no legal education, but it strikes us that maybe there is other, anti-bias legislation that might take care of this.

Besides, if a company wants to rid itself of seasoning and experience in a favor of low wages, no matter what the impact on its service and performance levels, should government be protecting that company from itself?