New Grocery Worker Protection Act

February 19, 2016

On January 19, 2016, The New York City Council added yet another piece of legislation to the raft of new municipal labor laws that have taken effect so far in 2016. Effective immediately, the Grocery Worker Retention Act (the "Act") guarantees grocery workers their jobs for 90 days upon a change of store ownership.

The move comes in response to A&P supermarkets' 2015 bankruptcy, which hit New York City workers particularly hard. More than a dozen A&P supermarkets throughout the city changed ownership as a result, which ultimately rendered null and void the collective bargaining agreements those stores had negotiated with the United Food and Commercial Workers Union on behalf of their employees.

Coverage & Intent
The Act is intended to give workers who would otherwise be separated from employment because of their store's change in control a chance to demonstrate their value to a prospective new employer. It applies to both unionized and non-unionized retail grocery stores within the five boroughs larger than 10,000 square feet, exclusive of storage space, food prep areas and dining areas. Markets with pharmacy sales that comprise of 50 percent or more of overall sales are excluded from coverage.

For an employee to fall under the new law's protection, a store subject to a change in control must have been his or her primary place of employment, and he or she must have worked at that location for at least eight hours per week for no less than six months, whether full-time or part-time. The Act does not apply to store managers or supervisors.

Obligations & Exceptions
Covered successor employers are prohibited from terminating the employment of a store's employees within 90 days of a change in control, which the Act defines as, "any sale, assignment, transfer, contribution or other disposition of all or substantially all of the assets of, or a controlling interest in, including by consolidation, merger or reorganization, any grocery establishment." Once the 90 day transition period ends, the new employer must provide each employee with a written performance evaluation and, if deemed satisfactory, consider that employee for continued employment.

The Act provides for only a single exception other than terminations for cause. In the event of a reduction in force, a new owner is permitted to terminate the employment of redundant employees according to their levels of seniority and experience. However, the successor employer then is required to maintain a preferential hiring list of all employees let go and give the employees the right of first refusal over any positions that may become available during the 90-day transition period. The owner must also retain records of any such offers it makes for a period of three years.

In addition to the burdens it places on successor employers, the Grocery Worker Protection Act also imposes pre-sale obligations on incumbent owners.

Penalties for Violation
Employees who believe they have been treated in violation of the Grocery Worker Retention Act must contact New York's Department of Consumer Affairs within 180 days of the date on which they either first knew or should have known of the alleged violation. Employers that violate the Act face potentially steep penalties.

The Grocery Worker Retention Act presents the operators of New York's markets with very real challenges. Not only does the Act impose immediate workforce responsibilities on the prospective new owner of a flagging market, potentially making such entities more difficult to sell, its burdensome implementation means that even the most well-intentioned operators may make any number of costly errors.

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