Shulman Bastian LLP

Bill would prohibit termination of grocery store workers in 90 days after a merger

Compliance with state and federal employment laws is always an important consideration when an employer merges with or acquires another company. In industries with high rates of consolidation, companies tend to have heightened union concerns and may even draw the attention of lawmakers who want to ensure that employees are being treated fairly during and after the sale of a business.

Like companies in the tech industry, health care and financial services, grocery stores in California and throughout the country have changed ownership at a particularly rapid pace in recent years. The United Food and Commercial Workers union is well aware of the trend and has sponsored a controversial bill that was recently passed by the California Assembly.

The legislation, which the California Chamber of Commerce has called a "job killer," would prohibit grocery stores from terminating workers' employment within 90 days of an acquisition or merger. Specifically, Assembly Bill 359 states that workers could not legally be fired during that 90 days for reasons not related to performance.

After the 90-day grace period, grocery stores would have to conduct performance reviews in deciding whether or not individual employees should stay on.

Critics of the bill have said that it would open grocery stories up to lawsuits from employees who are not retained following the 90-day period.

If you have questions about compliance with existing employment law in California, then speak with an experienced business and employment law attorney. A lawyer with the necessary knowledge and resources can protect you from liabilities related to mergers and acquisitions.

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