SB 725: Grocery Workers Bill Amended

Senate Bill 725  by Sen. Lola Smallwood-Cuevas (D-Los Angeles) was amended to address grocery workers and successor establishments. Section 1 would amend Labor Code Section 2502 in order to add the words “purchase” and “acquisition” to the definition of “change in control.”

The bill would also add the following to the definition of the term “grocery establishment”: “A distribution center owned and operated by a grocery establishment and used primarily to distribute goods to or from its owned stores shall be considered a grocery establishment regardless of its square footage.” And, the bill would add the following to the definition of “successor grocery employer”: “A successor grocery employer may be the same entity as an incumbent employer when a change in control occurs but the covered employer remains the same.”

Section 2 of the bill would add Labor Code Section 2507 to provide that, if a successor grocery employer does not hire an eligible grocery worker following a change in control, or does not retain an eligible grocery worker for at least 90 days following the change in control or the eligible grocery worker’s employment commencement date, whichever is later, then the successor grocery company would be required to provide the eligible grocery employee severance pay equal to one week of pay for each full year of employment with the incumbent grocery employer.

There would be an exception to this requirement when the eligible grocery worker has quit or has been discharged for cause, The rate of severance pay would be the average regular rate of compensation received during the eligible grocery worker’s last three years of employment with the incumbent grocery employer or the final regular rate of compensation paid to the eligible grocery worker, whichever rate is higher.

Finally, the successor grocery employer would be required to provide the greater of the severance pay required or the severance pay required pursuant to the terms of a relevant collective bargaining agreement.