business news in context, analysis with attitude

The Los Angeles Daily News reports that the LA City Council is preparing to pass legislation that would require supermarkets that acquire stores to retain the old stores’ employees during the transition.

If finalized, the law would say that any employee who worked for the original company for at least six months would have to be kept on for at least 90 days unless there is a legal cause to terminate them.

Predictably, union and labor forces supported the move, while business and industry interests decried it as hurtful to the city’s economy.

Peter Larkin, president of the California Grocers Association (CGA) told the News, “I do believe that if this ordinance were to go in effect much of the capital that would be available for investment in supermarkets in the city might indeed flow elsewhere due to the lack of this type of ordinance in other municipalities.”

City officials said they could impose the new rules because the employees involved are responsible for city’s food safety, and that city has police powers when it comes to matters of public safety.
KC's View:
Maybe we are naïve, but it seems to us that any company that acquired a store would want to keep on the good and productive employees while shedding the deadwood.

In a competitive and cutthroat marketplace, putting these kinds of restrictions on employers strikes us as punitive in a way that is neither called for nor necessary.

And if the rules are going to become law, there ought to be some sort of quid pro quo…like will those 90-day employees also guarantee that they won’t take any vacation time during the retention period?