May 04, 2006 16:36 ET

California Grocers Announce Legal Challenge to L.A. Worker Retention Ordinance

Grocers, Community Groups Claim Act Hurts Inner-City Working Families, Limits Healthy Food Choices

SACRAMENTO, CA -- (MARKET WIRE) -- May 4, 2006 -- Calling the City of Los Angeles' "Grocery Worker Retention Ordinance" improper, unlawful and unenforceable, the California Grocers Association today filed a lawsuit in Los Angeles Superior Court challenging a law that will limit consumer choice for working families especially in economically disadvantaged communities.

The lawsuit charges that the ordinance is unlawful and unenforceable because it is preempted by federal labor relations laws, violates the equal protection rights of employers, conflicts with state food-related health and safety laws, and improperly dictates rules of employment. The ordinance represents the first attempt in the nation to require a certain class of supermarket retailers to retain workers when a store changes ownership.

"This ordinance violates equal protection requirements by singling out a certain class of grocery retailers without placing similar requirements on competitors," said Peter Larkin, President of California Grocers Association. "By dictating the hiring decisions of successor employers for 90 days, the ordinance also interferes with state and federal labor relations laws."

The California Grocers Association also believes the measure will put severe limits on consumer choice.

"Fewer supermarkets in the City of Los Angeles mean fewer options for residents who need ready access to fresh and affordable produce and meats," said Larkin. "It is a shame that as we are educating entire communities about the importance of healthy diets, roadblocks are thrown up limiting healthy food choices for children and their parents."

Community and business leaders believe the measure will encourage supermarkets and potentially other businesses to locate outside the city limits as opposed to communities where the need is greater. In a letter to the City Council, Carol Schatz, President and CEO of the Central City Association of Los Angeles, wrote, "An ordinance of this type unfairly burdens business and discourages investment in many underserved communities of the City." Steven A. Soto, President and CEO of the Mexican American Grocers Association, stated in his letter to the City Council, "We believe this ordinance would be counter productive to our mutual goals of maximizing economic stability in our communities."

"City Council members fast-tracked this ordinance for approval with little input from the community. There is nothing in the public record to suggest that studies were conducted by city staff to identify the impact it will have on working families who reside inside city limits, or on the businesses both small and large who will be regulated," said Rusty Hammer, President and CEO of the Los Angeles Chamber of Commerce. "This ordinance is counterproductive to maximizing economic stability in our communities, and it will translate into fewer jobs and higher grocery costs."