What once was old is new again. This adage rings true on California public policy. Assembly Bill 359, which is on Gov. Jerry Brown’s desk, is merely a retread of failed attempts to empower unions and force new burdensome regulations on California businesses.
Specifically, AB 359 would impose mandatory standards on keeping workers when grocery stores of more than 15,000 square feet change ownership. Big-box retailers, chain pharmacies and others would not be subject to the same set of standards, however.
This measure may make for catchy sound bites or appease certain political allies, but it is an unnecessary proposal riddled with unintended consequences that will limit consumer access, lead to job losses and hurt family-owned companies.
Authored by Assemblywoman Lorena Gonzalez, D-San Diego, AB 359 is at the top of the California Chamber of Commerce “job killers” list, and rightfully so. Prior attempts to establish the unprecedented policy of taking away a private employer’s right to choose their own workforce have either been rejected by the Legislature or vetoed by the governor.
AB 359 won’t create stability, and instead will cause blight when failing grocery stores are forced to close their doors rather than sell to a company whose format and business model better reflect the needs of a changing community. The bill would stall sales or, worse, scare off potential buyers who would be subject to a host of new regulations and burdensome record-keeping requirements.
The average size of a traditional supermarket, regardless of ownership, is about 45,000 square feet. With razor-thin profit margins, often 1 percent to 2 percent, sales volume is essential to success. A store must have tens of thousands of products, and that requires a larger footprint. AB 359’s arbitrary threshold of 15,000 square feet reflects a lack of experience and knowledge of the grocery industry.
The bill’s author has failed to produce examples over more than 30 years in California that warrant this proposal. In fact, contrary to the doom and gloom picture the bill’s proponents paint, one of the largest and most successful California-based mergers happened earlier this year between two major grocery chains. The “fallout” of this “Wall Street-style merger” resulted in 83 store locations sold in Southern California to a single buyer, who voluntarily retained store employees and honored the collective bargaining agreements in place.
So if AB 359 creates an unlevel playing field by exempting some of the largest retailers in the country and there are no examples of Californians being put out of work by a grocery merger, then what is the real reason for the bill?
The answer is clear – AB 359 is designed to help labor unions in their organizing efforts. It would trigger a federal statute that would automatically recognize the existing workforce as the bargaining unit, without a vote by the employees.
The Legislature is supposed to pass responsible, economically viable policies that balance the needs of its citizens, not green-light policies that will make it easier for Big Labor to organize. AB 359 is bad public policy, and we urge Gov. Brown to veto it.
Ronald K. Fong is president and CEO of the California Grocers Association. Rex S. Hime is president and CEO of the California Business Properties Association.