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Say Hello to Your Newest Hiring Manager: The Government!

Posted in Labor Law

By: Alden J. Parker

Whether you needed a new hiring manager or not, you just got one. On January 23, 2012, the U.S. Supreme Court rejected an appeal by supermarket owners in Los Angeles. While the U.S. Supreme Court did not rule, the effect of their rejection of the appeal is to let stand the California Supreme Court’s earlier ruling, permitting local governments to pass ordinances that require the hiring or retention of employees when a business’s ownership changes hands.

In this case the supermarket owners were challenging the authority of California cities to mandate that workers be hired and kept when a company changes owners. Specifically, the case involved a Los Angeles ordinance requiring supermarkets to keep their workforce for 90 days after a new owner takes over, unless the owner has good cause to fire a particular employee. (Then of course, the employee can sue claiming they were not fired for good cause.) The Los Angeles ordinance at issue in this case passed in 2005 but was blocked by court rulings. However in July 2011, California’s Supreme Court upheld the ordinance in a 6-1 ruling. The California Supreme Court stated that it would not prevent state and local governments from regulating hiring and firing of employees.

Similar local ordinances exist for hotels in Oakland and Emeryville. Other industries are currently affected by these types of ordinances in Berkeley and San Jose. With the U.S. Supreme Court rejecting this appeal, they have cleared the way for other municipalities and even that State to pass similar ordinances. We will continue to monitor this trend as it develops. Now that the government is directly making our hiring decisions like they are employed by us, can we send them a W2? Just a thought…..