CalChamber Requests Veto of Bill That Creates New Private Right of Action on Grocery Employers

(September 22, 2023) The California Chamber of Commerce is requesting the Governor veto a job killer bill that creates a new private right of action against and potentially significant new penalties on grocery employers.

The bill, AB 647 (Holden; D-Pasadena), significantly expands a statute related to successor grocery employers, including disrupting the ability for independent small stores to join together, expands the number of workers covered under the law, and creates a significant new private right of action.

AB 647 grants employees, collective bargaining representatives and nonprofit corporations the ability to bring an action in superior court for violations of an employee’s new rights under this bill. The bill remedies include hiring and reinstatement rights, front pay or back pay for each day during which the violation continues, the value of the benefits the employee would have received under any benefit plans, and attorney’s fees and costs to any employee or employee representative.

The bill expands the list of eligible grocery workers covered by worker retention and private right of action conditions to include a newly-defined “separated employee.” The broad definition of “separated employee” includes any employee employed by a grocer impacted by a change in ownership that was employed for 6 months or more in the 12 months preceding the change in store control and whose most recent separation was due to change in control, lack of business, reduction in force, or transfer. Under AB 647 grocers would now have to reenlist “separated employees” within an arbitrary 15-mile radius of their residence.

The bill also creates a rebuttable presumption that any employee’s termination within a year of change of ownership was due to nondisciplinary reasons. It then goes further by requiring the successor grocer to offer these employees right of refusal to return for employment. This requirement could force the successor grocer to rehire employees dismissed for cause. The bill ties a grocer employer’s hands in hiring decisions, which may negatively impact current grocery employees during the transition period.