Michael Carroll Mar. 17, 2016, 2:53pm


NEW YORK (Legal Newsline) — New York’s mayor and City Council see recently passed legislation such as the Grocery Worker Retention Act as a way to help hard-working employees deal with economic instability, but many employers see the new laws as a reflexive government overreach into private industry.

Mayor Bill de Blasio signed the grocery law last month after the council sent it to his desk. The new law requires companies that purchase existing grocery stores in the city to retain all of the store’s employees for three months during the ownership transition period.

The City Council passed the bill after the recent closure of several A&P-owned markets in the city due to a bankruptcy, resulting in the displacement of thousands of workers.

The grocery law will take effect in approximately two months.

Mark Goldstein, a labor and employment attorney with the firm Reed Smith, sees the grocery store law as part of a disquieting trend.

 “There is a general concern among the business community that New York City is targeting specific industries,” Goldstein told Legal Newsline

Companies looking to buy grocery stores in the city in the future will need to carefully consider whether they want to proceed with such a transaction, he said.

The council also previously passed the Car Wash Accountability Act, which requires all car washes in New York City to apply for a new city license every two years. The city’s Department of Consumer Affairs, in turn, can consider an establishment’s previous labor law violations when renewing a license.

Goldstein, who works in Reed Smith’s New York office, said other industries should be concerned about such regulations. 

“There will be other industries that City Council members will look into, and if they think there needs to be government regulation of that industry... I do think there will be legislation proposed,” he said.

“We haven’t seen the last of the City Council looking at specific industries,” added Goldstein, who predicted that the grocery law may well dissuade some potential bidders from trying to purchase a store. 

In turn, he said, the final purchase price may be affected. The law does allow a grocery store owner to terminate an employee with cause during the 90-day transition period, but the law does not clearly define “with cause,” Goldstein explained.

The grocery store act is similar to a 14-year-old New York City law that contains retention requirements for building services workers.

Goldstein said that new grocery store owners may find the legal landscape even more complicated in the wake of a ruling in August by the National Labor Relations Board on union recognition.

“There’s this grocery law, and there was the car wash law,” he said, “so the question is, where is the New York City Council headed?” 

Goldstein said regulations have to be different for different industries, but the council is not underpinning or justifying the new regulations with expert studies.

Furthermore, the penalties facing grocery companies that violate the terms of the law are substantial. Goldstein noted that workers wrongly fired during transition periods could recover three times their lost pay, plus attorneys’ fees and costs.

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