Title: California Grocers Assoc. v. City of Los Angeles

State: california

Issuer: California Supreme Court

Document:

1 
Filed 7/18/11 
 
 
 
IN THE SUPREME COURT OF CALIFORNIA 
 
 
 
CALIFORNIA GROCERS  
) 
ASSOCIATION, 
) 
 
 
) 
 
Plaintiff and Respondent, 
) 
 
 
) 
S176099 
 
v. 
) 
 
 
) 
Ct.App. 2/5 B206750 
CITY OF LOS ANGELES, 
) 
 
) 
Los Angeles County 
 
Defendant and Appellant; 
) 
Super. Ct. No. BC351831 
 
 
) 
LOS ANGELES ALLIANCE FOR A 
) 
NEW ECONOMY, 
) 
 
 
) 
 
Intervener and Appellant. 
) 
 
____________________________________) 
 
The City of Los Angeles, like numerous other municipalities in California 
and elsewhere, regulates the ability of certain employers to summarily replace the 
workforce upon acquiring a new business.  Is such a worker retention ordinance 
preempted as intruding upon either matters of health and safety already regulated 
by the state or matters of employee organization and collective bargaining fully 
occupied by federal law?  We conclude it is not.  As well, we conclude the 
challenged ordinance is fully consistent with both the state and federal equal 
protection clauses.  As the Court of Appeal found the ordinance preempted, we 
reverse. 
 
2 
FACTUAL AND PROCEDURAL BACKGROUND 
In December 2005, the City of Los Angeles (City) adopted the Grocery 
Worker Retention Ordinance (Ordinance).  (L.A. Ord. No. 177,231, adding 
ch. XVIII, § 181.00 et seq. to L.A. Mun. Code.)1  For grocery stores of a specific 
size (15,000 square feet or larger) that undergo a change of ownership, the 
Ordinance vests current employees with certain individual rights during a 90-day 
transition period.  First, the incumbent owner is to prepare a list of nonmanagerial 
employees with at least six months‘ employment as of the date of transfer in 
ownership, and the successor employer must hire from that list during the 
transition period.  (L.A. Mun. Code, § 181.02.)  Second, during that same period, 
the hired employees may be discharged only for cause.  (Id., § 181.03(A)-(C).)  
Third, at the conclusion of the transition period, the successor employer must 
prepare a written evaluation of each employee‘s performance.  The Ordinance 
does not require that anyone be retained, but if an employee‘s performance is 
satisfactory, the employer must ―consider‖ offering continued employment.  (Id., 
§ 181.03(D).)  If the workforce is unionized, however, the union and the employer 
may agree on terms that supersede the Ordinance.  (Id., § 181.06.) 
                                              
1  
The Ordinance mirrors grocery worker retention ordinances adopted by 
various other California municipalities (see Gardena Mun. Code, ch. 5.10; S.F. 
Police Code, art. 33D; Santa Monica Mun. Code, ch. 5.40), and is substantially 
similar to worker retention ordinances for other fields adopted in California (e.g., 
Berkeley Mun. Code, ch. 13.25 [marina business workers]; Emeryville Mun. 
Code, ch. 32, § 5-32.1.1(b) [hotel workers]; L.A. Mun. Code, § 183.00 et seq. 
[hotel workers]; Oakland Mun. Code, ch. 2.36 [hospitality workers]; San Jose 
Mun. Code, § 25.11.700 et seq. [airport business workers]) and throughout the 
United States (N.Y.C. Admin. Code, tit. 22, ch. 5, § 22-505 [building service 
workers]; Philadelphia Mun. Code, ch. 9-2300 [service contract workers]; 
Providence, R.I., Code of Ord., §§ 2-18.5 [hospitality workers], 14-16 [building 
service workers]; D.C. Official Code, § 32-101 et seq. [health care, food service, 
and janitorial workers]). 
 
3 
Plaintiff California Grocers Association (Grocers) filed a complaint against 
the City seeking to enjoin enforcement of the Ordinance on the grounds that it was 
preempted by provisions of the Health and Safety Code, the Labor Code, and 
federal labor law, and that it violated the equal protection provisions of the state 
and federal Constitutions.  The Los Angeles Alliance for a New Economy, a 
nonprofit organization, intervened to defend the Ordinance. 
After a two-day bench trial, the trial court entered a judgment enjoining 
enforcement of the Ordinance, declaring it void on two of the four asserted 
grounds.  The court concluded the Ordinance affected health and sanitation 
standards for retail food establishments, an area fully occupied by state law, and 
was on that basis preempted, and further concluded the Ordinance violated equal 
protection because there was no rational basis for its differential treatment of 
grocery stores smaller than 15,000 square feet or its permitting employers and 
unions to contract around the Ordinance‘s terms. 
A divided Court of Appeal affirmed.  The majority agreed with the trial 
court that the California Retail Food Code (Retail Food Code) (Health & Saf. 
Code, § 113700 et seq.) fully occupied the field of health and sanitation standards 
for retail food establishments, and the Ordinance had the impermissible purpose 
and effect of regulating in the same area.  It further concluded, contrary to the trial 
court, that the Ordinance was also preempted by the National Labor Relations Act 
(NLRA or the Act) (29 U.S.C. § 151 et seq.) because, in the majority‘s view, 
federal labor law guaranteed successor employers the right to pick and choose 
whom they wished to employ, free of local regulation.  The majority did not 
address the trial court‘s further equal protection conclusions.  In contrast, the 
dissent argued that the Ordinance was neither preempted nor inconsistent with 
equal protection principles. 
 
4 
We granted review to resolve significant preemption and constitutional 
questions placing into doubt the validity of this and other similar worker retention 
ordinances throughout the state. 
DISCUSSION 
I.  State Preemption 
 
A.  Preemption Principles 
Local ordinances and regulations are subordinate to state law.  (Cal. Const., 
art. XI, § 7.)  Insofar as a local regulation conflicts with state law, it is preempted 
and invalid.  (O’Connell v. City of Stockton (2007) 41 Cal.4th 1061, 1067; 
Sherwin-Williams Co. v. City of Los Angeles (1993) 4 Cal.4th 893, 897.)  ― ‗ ―A 
conflict exists if the local legislation ‗ ―duplicates, contradicts, or enters an area 
fully occupied by general law, either expressly or by legislative implication.‖ ‘ ‖ 
[Citations.]‘ ‖  (O’Connell, at p. 1067, quoting Sherwin-Williams, at p. 897; 
accord, American Financial Services Assn. v. City of Oakland (2005) 34 Cal.4th 
1239, 1251.) 
Only the last of these bases for conflict, field preemption, is at issue here.  
―Local legislation enters an area ‗fully occupied‘ by general law when the 
Legislature has expressly manifested its intent to fully occupy the area or when it 
has impliedly done so in light of recognized indicia of intent.‖  (Big Creek Lumber 
Co. v. County of Santa Cruz (2006) 38 Cal.4th 1139, 1150.)  Grocers contend the 
Ordinance impermissibly intrudes into an area the state has, in the Retail Food 
Code, expressly reserved for itself.  (See Health & Saf. Code, § 113705.)  Express 
field preemption turns on a comparative statutory analysis:  What field of 
exclusivity does the state preemption clause define, what subject matter does the 
local ordinance regulate, and do the two overlap?  (See, e.g., Big Creek Lumber, at 
pp. 1152-1157; Morehart v. County of Santa Barbara (1994) 7 Cal.4th 725, 748-
 
5 
751.)  The burden of proving the existence of such an overlap rests on Grocers, as 
the party asserting preemption.  (Big Creek Lumber, at p. 1149.) 
 
B.  Express Preemption 
We begin with the language of the preemption clause and the Ordinance.  
Health and Safety Code section 113705‘s definition of the regulatory field it 
reserves for the state is clear and precise:  ―Except as provided in Section 
113709,[2] it is the intent of the Legislature to occupy the whole field of health and 
sanitation standards for retail food facilities, and the standards set forth in this part 
and regulations adopted pursuant to this part shall be exclusive of all local health 
and sanitation standards relating to retail food facilities.‖  Thus, the state alone 
may adopt ―health and sanitation standards for retail food facilities.‖  (Ibid.)  The 
remainder of the statutory scheme demonstrates by way of example the precise 
scope of exclusive state regulation, comprehensively detailing standards for, e.g., 
employee training on health matters (id., §§ 113947-113947.3), employee health 
and hygiene (id., §§ 113949-113978), food transportation, storage, and preparation 
(id., §§ 113980-114057.1), food display and service (id., §§ 114060-114083), food 
labeling (id., §§ 114087-114094), the design and sanitizing of food preparation 
areas and utensils (id., §§ 114095-114185.5), and the design and cleanliness of 
food facilities (id., §§ 114250-114282).3 
                                              
2  
Health and Safety Code section 113709, a savings clause preserving local 
authority over certain subjects not relevant here, does not affect our disposition of 
this case. 
3  
As examples of the sorts of concerns addressed and level of detail provided 
by the Retail Food Code, the statutory scheme specifies, to the degree and minute, 
the temperatures at which various foods must be stored and cooked (Health & Saf. 
Code, §§ 113996, 114004), to the hour, how long food contact surfaces may go 
between cleanings (id., § 114117), and, to the inch, how large food preparation 
sinks must be (id., § 114163). 
 
6 
In contrast, the Ordinance imposes no substantive food safety standards.  
Its provisions regulate, for certain grocery stores during ownership transitions, 
how a new owner may select its workforce.  (See generally L.A. Mun. Code, 
§§ 181.02-181.04.)  It does not speak to how employees must conduct themselves 
to ensure sanitation, how food should be handled or transported, how grocery 
stores should be designed or cleaned, or any of the various other topics for which 
the Retail Food Code sets out exclusive state standards.  The face of the Ordinance 
thus discloses no incursion into the exclusive realm reserved for the state by 
Health and Safety Code section 113705; the former regulates employment, not 
food safety, while the latter regulates food safety, not employment. 
In concluding that the Ordinance nevertheless is preempted, the Court of 
Appeal majority relied on language in the Ordinance‘s preamble and statements by 
City officials indicating the City, in passing the Ordinance, was concerned with 
promoting health and safety.  The preamble notes in part:  ―The City has an 
interest in ensuring the welfare of the residents of [Los Angeles] through the 
maintenance of health and safety standards in grocery establishments.  
Experienced grocery workers with knowledge of proper sanitation procedures, 
health regulations, and understanding of the clientele and communities they serve 
are instrumental in furthering this interest.‖  (L.A. Mun. Code, § 181.00.)  
Remarks by members of the city attorney‘s office and some city council members 
during deliberations similarly suggest the promotion of health and safety may have 
been a City concern. 
We may accept for the sake of argument that the promotion of health and 
safety was one of the City‘s purposes in passing the Ordinance.  That the 
Ordinance is preempted does not, however, follow.  Purpose alone is not a basis 
 
7 
for concluding a local measure is preempted.4  While we and the Courts of Appeal 
have occasionally treated an ordinance‘s purpose as relevant to state preemption 
analysis (see, e.g., Lancaster v. Municipal Court (1972) 6 Cal.3d 805, 809-810; 
Bravo Vending v. City of Rancho Mirage (1993) 16 Cal.App.4th 383, 404-409), 
we have done so in the context of a nuanced inquiry into the ultimate question in 
determining field preemption:  whether the effect of the local ordinance is in fact 
to regulate in the very field the state has reserved to itself. 
Thus, in Cohen v. Board of Supervisors (1985) 40 Cal.3d 277, we upheld 
against a preemption challenge a local ordinance requiring a permit to provide an 
escort service.  The state had impliedly occupied the field with respect to the 
criminalization of prostitution and sexual conduct.  (See In re Lane (1962) 58 
Cal.2d 99, 103.)  Although the ordinance‘s likely purpose was to reduce vice and 
deter conduct proscribed by the state, this purpose did not support preemption:  
―An ordinance is not transformed into a statute prohibiting crime simply because 
the city uses its licensing power to discourage illegitimate activities associated 
with certain businesses.  Most licensing ordinances have a direct impact on the 
enforcement of state laws which have been enacted to preserve the health, safety 
and welfare of state and local citizens.  This fact does not deprive a municipality 
of the power to enact them.‖  (Cohen, at p. 299.)  The ordinance in actual effect 
did not enter the field of criminalizing sexual conduct, but only controlled who 
might operate an escort service, leaving the regulation of any such conduct to the 
                                              
4  
To rest preemption analysis solely on considerations of purpose would 
generate the anomalous circumstance, rejected by the United States Supreme 
Court, that one jurisdiction‘s measure might survive preemption, while another 
identical measure passed in a different jurisdiction might fall, ―merely because its 
authors had different aspirations.‖  (Shady Grove Orthopedic Associates, P.A. v. 
Allstate Ins. Co. (2010) 559 U.S. ___ [130 S.Ct. 1431, 1441].) 
 
8 
state; as such, it was not preempted.  (Id. at pp. 295-296, 299-300; see also EWAP, 
Inc. v. City of Los Angeles (1979) 97 Cal.App.3d 179, 191 [upholding an 
ordinance regulating picture arcades so as to discourage violations of state law, 
without criminalizing or imposing any new standard for sexual conduct]; cf. 
Lancaster v. Municipal Court, supra, 6 Cal.3d at pp. 809-810 [concluding an 
ordinance was preempted where its effect was to criminalize aspects of sexual 
conduct].) 
Similarly, in Bravo Vending v. City of Rancho Mirage, supra, 16 
Cal.App.4th 383, a tobacco company challenged a local ordinance forbidding 
vending machine cigarette sales.  The tobacco company contended that, because 
the ordinance was intended to reduce sales to minors and the state had expressly 
occupied the field of penal sanctions for sales to minors, the ordinance was 
preempted.  The Court of Appeal found no preemption.  While the local ordinance 
was intended to make less likely violations of the laws against sales to minors, in 
actual effect it neither expanded upon nor detracted from the state-mandated 
prohibitions and sanctions for sales.  (Id. at p. 412.) 
More recently, in Personal Watercraft Coalition v. Marin County Bd. of 
Supervisors (2002) 100 Cal.App.4th 129, the Court of Appeal rejected the 
argument that, because a municipality had adopted an ordinance banning the use 
of personal watercraft out of a concern for pollution, the ordinance was preempted 
by federal law prohibiting the adoption of state and local emission standards for 
nonroad vehicles.  The Court of Appeal correctly recognized that the purpose of 
the federal preemption provision was only to alleviate the problems that would 
arise from ―a multiplicity of conflicting state and local exhaust emission 
standards.‖  (Id. at p. 155.)  Consequently, state and local laws were preempted 
only to the extent they adopted such standards.  Laws that simply promoted the 
 
9 
same antipollution goals without setting pollution standards were entirely valid.  
(Ibid.) 
These cases are on point here.  The Retail Food Code does not preempt all 
laws that have as their purpose the promotion of food health and safety; it 
preempts only those that establish ―health and sanitation standards‖ for retail food 
establishments, so as to ensure uniformity for such facilities.  (Health & Saf. Code, 
§ 113705.)  The Retail Food Code itself dictates those uniform standards, but does 
not specify by whom they are to be carried out; as far as state law is concerned, a 
retail food store may employ whomever it likes, so long as those it employs 
comply with the state‘s standards for distributing food in a safe and healthful 
manner.  For its part, the Ordinance, like the escort service ordinance in Cohen v. 
Board of Supervisors, supra, 40 Cal.3d 277, regulates only who may be hired to 
engage in certain work, and though it may have been intended in part to reduce 
violations of state law by those workers, it does not itself add to or subtract from 
the state‘s uniform standards of conduct for whoever engages in that work.  Like 
the watercraft ordinance in Personal Watercraft Coalition v. Marin County Bd. of 
Supervisors, supra, 100 Cal.App.4th 129, the Ordinance promotes the same goals 
as the enactment of a higher governmental authority, but does so without entering 
the field that enactment preempts, i.e., the setting of specific uniform standards.  
The trial court erred in concluding that, because the Ordinance arguably was 
intended to enact ―a different approach to ensuring food safety than that crafted by 
the Legislature,‖ ipso facto it was preempted. 
Grocers argue, purpose aside, that the Ordinance goes beyond issues of 
worker retention and does impose food sanitation standards.  As foundation for 
this argument, Grocers focus on the portion of the Retail Food Code that regulates 
employee training and knowledge.  (See Health & Saf. Code, §§ 113947-
113947.6.)  Health and Safety Code section 113947, subdivision (a) requires ―[t]he 
 
10 
person in charge and all food employees [to] have adequate knowledge of, and . . . 
be properly trained in, food safety as it relates to their assigned duties.‖  The Retail 
Food Code further requires that specified food facilities have either an owner or 
employee who has received state certification in food safety (see id., §§ 113947.1, 
subds. (a), (b)(1), 113947.2, 113947.3) or otherwise be able to demonstrate to an 
enforcement officer that the employees have adequate knowledge of food safety as 
it relates to their duties (id., § 113947.1, subd. (b)(2)).  For facilities that have just 
opened, gone through a change in ownership, or otherwise lost their certified food 
safety specialist, the scheme offers a 60-day grace period.  (Id., subd. (e).)  
Grocers contend the Ordinance, too, regulates employee qualifications. 
Contrary to Grocers‘ argument, this portion of the Retail Food Code and 
the Ordinance do not overlap.  The Retail Food Code establishes standards for 
what certain employees, particularly one certified owner or supervising food 
service employee, must know or be taught, but does not regulate who must be 
hired; the Ordinance regulates the pool of nonsupervising, nonmanagerial 
employees from which a new owner temporarily must hire, but imposes no 
standards concerning what the hired employees must know or be taught about food 
safety.  Notably, the Retail Food Code‘s required certified food safety specialist is 
by definition a managerial or supervisorial employee,5 while the Ordinance by its 
terms expressly excludes from its scope all such employees6 and thus does not 
                                              
5  
See Health and Safety Code section 113947.1, subdivision (f) (―The 
responsibilities of a certified owner or employee . . . shall include the safety of 
food preparation and service, including ensuring that all employees who handle, or 
have responsibility for handling, nonprepackaged foods of any kind, have 
sufficient knowledge to ensure the safe preparation or service of the food, or 
both.‖). 
6  
See Los Angeles Municipal Code section 181.01(C) (― ‗Eligible Grocery 
Worker‘ does not include a managerial, supervisory, or confidential employee.‖). 
 
11 
regulate or restrict in any way an employer‘s freedom to hire whomever it chooses 
to satisfy that position.  As such, the Ordinance does not intrude upon the field the 
state has expressly reserved to itself and is not preempted by state law. 
II.  Federal Preemption 
 
A.  Machinists Preemption Principles 
We consider as well whether the Ordinance is preempted by the NLRA, a 
federal law enacted to protect ―the right of employees to organize and bargain 
collectively.‖  (29 U.S.C. § 151.)  The supremacy clause of the United States 
Constitution vests Congress with the power to preempt state law.  (Viva! Internat. 
Voice for Animals v. Adidas Promotional Retail Operations, Inc. (2007) 41 
Cal.4th 929, 935; see U.S. Const., art. VI, cl. 2.)  While Congress may exercise 
that power by enacting an express preemption provision, the NLRA contains no 
such provision; indeed, ―Congress has not seen fit to lay down even the most 
general of guides to construction of the Act, as it sometimes does, by saying that 
its regulation either shall or shall not exclude state action.‖  (Bethlehem Co. v. 
State Board (1947) 330 U.S. 767, 771.)  Instead, Grocers contend the Ordinance is 
impliedly preempted under the Machinists doctrine.  (Machinists v. Wisconsin 
Emp. Rel. Comm’n (1976) 427 U.S. 132 (Machinists).)  Determining whether 
Machinists preemption extends here requires that we examine its principles in 
some depth. 
In Machinists, supra, 427 U.S. 132, the United States Supreme Court 
considered whether labor or management self-help (economic pressure tactics 
such as boycotts, strikes, and lockouts used to extract concessions during the 
collective bargaining process), although neither protected nor prohibited by the 
NLRA, might nevertheless be ― ‗deemed privileged against state regulation.‘ ‖  
(Machinists, at p. 141.)  A union, seeking to pressure an employer to make 
concessions in negotiations over renewal of an expired collective bargaining 
 
12 
agreement, urged its members to refuse all overtime work.  A state labor 
commission, concluding the conduct was neither arguably protected nor arguably 
prohibited by federal labor law, enjoined the concerted activity as being in 
violation of state law, and the state supreme court upheld the injunction. 
The United States Supreme Court reversed.  It explained that even where 
the NLRA does not address a particular economic weapon, preemption may still 
apply.  ―Whether self-help economic activities are employed by employer or 
union, the crucial inquiry regarding pre-emption is the same:  whether ‗the 
exercise of plenary state authority to curtail or entirely prohibit self-help would 
frustrate effective implementation of the Act‘s processes.‘ ‖  (Machinists, supra, 
427 U.S. at pp. 147-148.)  Except insofar as the NLRA itself regulates the use of 
particular economic weapons, Congress intended a ―no-fly‖ zone, with neither 
states nor the National Labor Relations Board (NLRB) permitted to interfere in the 
bargaining process by dictating which weapons labor and management might 
employ in negotiations.  ―To sanction state regulation of such economic pressure 
deemed by the federal Act ‗desirabl[y] . . . left for the free play of contending 
economic forces, . . . is not merely [to fill] a gap [by] outlaw[ing] what federal law 
fails to outlaw; it is denying one party to an economic contest a weapon that 
Congress meant him to have available.‘ ‖  (Machinists, at p. 150.) 
In subsequent years, the United States Supreme Court has extended 
Machinists principles to other instances in which, from the text or structure of the 
NLRA, it could infer Congress intended the subject matter to be free from state or 
municipal regulation.  Thus, in Golden State Transit Corp. v. Los Angeles (1986) 
475 U.S. 608, 618, again addressing regulation of economic weapons in the 
bargaining process, the United States Supreme Court concluded the City of Los 
Angeles was preempted from conditioning renewal of a taxicab company‘s 
operating license on the company‘s settling a labor dispute.  The taxi drivers were 
 
13 
permitted under the NLRA to strike to pressure the taxi company, and the taxi 
company was permitted to resist that pressure and seek to outlast the drivers.  The 
city, by requiring the taxi company to settle in order to keep operating, was 
effectively placing a time limit on the company when none was contemplated, 
thereby interfering with its use of permitted economic weapons, and was imposing 
an obligation to agree where the text and legislative history of the NLRA 
contemplated only an obligation to bargain.  (Golden State Transit, at pp. 615-
617.) 
Most recently, in Chamber of Commerce of United States v. Brown (2008) 
554 U.S. 60, the United States Supreme Court concluded California could not 
prohibit employers who received state funding from using those funds to influence 
support for or opposition to union organizing.  (See Gov. Code, §§ 16645.2, 
16645.7.)  Reviewing the history of federal labor regulation, the court noted 
Congress had ―expressly preclude[d] regulation of speech about unionization ‗so 
long as the communications do not contain a ―threat of reprisal or force or promise 
of benefit.‖ ‘ ‖  (Brown, at p. 68; see 29 U.S.C. § 158(c).)  As well, Congress 
could have included in section 8(a) and (b) of the NLRA (see 29 U.S.C. § 158(a), 
(b)) further limits on pro- and anti-unionization advocacy; the limits it chose to 
include could thus be seen as this-much-and-no-more determinations by Congress.  
Accordingly, state law was preempted.  (Brown, at p. 69.) 
The foregoing cases each dealt with circumstances where, from the 
structure of the NLRA, it was evident Congress had spoken to a particular topic 
and no state interference could be countenanced.  A second line of post-Machinists 
decisions, by contrast, has articulated significant limits on the scope of Machinists 
preemption arising from the fact the NLRA is a regulation of process, not 
substance. 
 
14 
The NLRA was enacted ―to remedy ‗[t]he inequality of bargaining power 
between employees who do not possess full freedom of association or actual 
liberty of contract, and employers who are organized in the corporate or other 
forms of ownership association.‘ ‖  (Metropolitan Life Ins. Co. v. Massachusetts 
(1985) 471 U.S. 724, 753 (Metropolitan Life), quoting 29 U.S.C. § 151.)  ―One of 
the ultimate goals of the Act was the resolution of the problem of ‗depress[ed] 
wage rates and the purchasing power of wage earners in industry,‘ 29 U. S. C. 
§ 151, and ‗the widening gap between wages and profits,‘ 79 Cong. Rec. 2371 
(1935) (remarks of Sen. Wagner), thought to be the cause of economic decline and 
depression.‖  (Metropolitan Life, at p. 754.)  Congress addressed this problem not 
by directly dictating particular wage levels, but by establishing procedures for 
employee organization and collective bargaining that, it hoped, would result in 
fairer negotiations and higher wages.  (Ibid.)  The resulting law was ―concerned 
primarily with establishing an equitable process for determining terms and 
conditions of employment, and not with particular substantive terms of the bargain 
that is struck when the parties are negotiating from relatively equal positions.‖  
(Id. at p. 753.) 
The United States Supreme Court in Metropolitan Life analyzed whether 
the process-oriented NLRA was intended to have any effect on local employment 
laws of general application.  A Massachusetts law required that employee health 
care plans include certain minimum benefits, a subject that otherwise might have 
been addressed in collective bargaining.  Rejecting the argument that Machinists 
preemption applied, the Supreme Court drew a line between laws that regulate 
process and those that regulate substance:  ―No incompatibility exists . . . between 
federal rules designed to restore the equality of bargaining power, and state or 
federal legislation that imposes minimal substantive requirements on contract 
terms negotiated between parties to labor agreements, at least so long as the 
 
15 
purpose of the state legislation is not incompatible with these general goals of the 
NLRA.‖  (Metropolitan Life, supra, 471 U.S. at pp. 754-755.)  While the NLRA 
facilitates collective bargaining over the terms of employment, it does not 
dictate—nor does it preclude states from dictating—any particular substantive 
terms of employment. 
As the Supreme Court further explained, because the NLRA regulates only 
the process of organizing and bargaining, ―[f]ederal labor law in this sense is 
interstitial, supplementing state law where compatible, and supplanting it only 
when it prevents the accomplishment of the purposes of the federal Act.‖  
(Metropolitan Life, supra, 471 U.S. at p. 756.)  The NLRA operates against the 
background of the vast tapestry of substantive state regulation of employer-
employee relations—the ― ‗backdrop of state law that provided the basis of 
congressional action.‘ ‖  (Metropolitan Life, at p. 757.)  Congress did not intend 
―to disturb the myriad state laws then in existence that set minimum labor 
standards, but were unrelated in any way to the processes of bargaining or self-
organization.‖  (Id. at p. 756.)  Massachusetts thus could exercise its broad police 
powers to regulate the terms of employee health benefits without trespassing into 
any area cordoned off by the NLRA for exclusive federal regulation. 
In Fort Halifax Packing Co. v. Coyne (1987) 482 U.S. 1 (Fort Halifax), the 
United States Supreme Court extended these principles to a state law guaranteeing 
employees a severance payment in the event of a plant closing.  The high court 
reiterated that ―the NLRA is concerned with ensuring an equitable bargaining 
process, not with the substantive terms that may emerge from such bargaining.‖  
(Id. at p. 20.)  States may regulate what might otherwise be the subject of 
negotiation:  ― ‗[T]here is nothing in the NLRA . . . which expressly forecloses all 
state regulatory power with respect to those issues . . . that may be the subject of 
collective bargaining.‘ ‖  (Id. at pp. 21-22.)  Given that ― ‗Congress developed the 
 
16 
framework for self-organization and collective bargaining of the NLRA within the 
larger body of state law promoting public health and safety‘ ‖ (id. at p. 22), Maine 
could by statute provide employees some minimal economic security, in the event 
of a plant closing, without running afoul of the NLRA.  
Our own decision in Industrial Welfare Com. v. Superior Court (1980) 27 
Cal.3d 690 presaged the high court‘s later recognitions of the power of localities to 
promote public health and safety through regulation of the employer-employee 
relationship without falling prey to Machinists preemption.  We considered there 
whether federal preemption precluded the state Industrial Welfare Commission 
from issuing wage orders regulating the minimum wages, maximum hours, and 
conditions of employment for employees in a range of industries.  We rejected the 
argument out of hand, relying on what we viewed as settled precedent that ―the 
federal labor laws do not ‗preempt [] . . . the field of regulating working conditions 
. . . .‘ ‖  (Industrial Welfare Com., at p. 728, fn. 16, quoting Terminal Assn. v. 
Trainmen (1943) 318 U.S. 1, 7.)  Instead, we recognized preemption was confined 
to circumstances in which local regulation interfered with the process of 
organizing and bargaining, including the use of economic weapons to achieve 
particular bargaining goals.  (Industrial Welfare Com., at p. 728, fn. 16.) 
As these cases demonstrate, at the core of Machinists preemption is the 
principle that, in specific instances, one may discern from the text and structure of 
the NLRA a basis for inferring that Congress affirmatively intended to leave a 
particular subject free from further NLRB and state and local government 
regulation.  ―Machinists pre-emption is based on the premise that ‗ ―Congress 
struck a balance of protection, prohibition, and laissez-faire in respect to union 
organization, collective bargaining, and labor disputes.‖ ‘ ‖  (Chamber of 
Commerce of United States v. Brown, supra, 554 U.S. at p. 65, quoting 
Machinists, supra, 427 U.S. at p. 140, fn. 4.)  ―[A]s in any pre-emption analysis, 
 
17 
‗ ―[t]he purpose of Congress is the ultimate touchstone.‖ ‘ ‖  (Metropolitan Life, 
supra, 471 U.S. at p. 747.) 
Given that Congress‘s purpose was to regulate the process of establishing 
terms of employment, not the content of those terms (Metropolitan Life, supra, 
471 U.S. at p. 753; Fort Halifax, supra, 482 U.S. at p. 20), it follows that the areas 
Congress intended to leave free of local regulation are those relating to the process 
by which an employment agreement is reached:  matters of self-organization and 
collective bargaining.  (See Metropolitan Life, at p. 751.)  In sharp distinction, 
because the NLRA is not a federal code of employment law, Machinists 
preemption does not extend to local establishment of substantive employment 
terms:  ―Such regulation provides protections to individual union and nonunion 
workers alike, and thus ‗neither encourage[s] nor discourage[s] the collective-
bargaining processes that are the subject of the NLRA.‘ ‖  (Fort Halifax, at pp. 20-
21; see also Southern California Edison Co. v. Public Utilities Com. (2006) 140 
Cal.App.4th 1085, 1100 [Local employment regulation is permitted ―as long as the 
purpose of the law or regulation is not incompatible with the general goals of the 
NLRA to restore the equality of bargaining power and resolve the problem of 
depressed wages.‖].) 
With these principles in mind, we consider whether the text or structure of 
the NLRA evidences any intent to preclude worker retention ordinances such as 
the one at issue here. 
 
B.  Application to the Ordinance 
We begin with an initial presumption against preemption.  (E.g., Building 
& Constr. Trades Council v. Associated Builders & Contractors of Mass./R. I., 
Inc. (1993) 507 U.S. 218, 224.)  This presumption is particularly heavy here 
because the subject matter, the employer-employee relationship, is one 
traditionally regulated by state and local governments under their police powers.  
 
18 
(Fort Halifax, supra, 482 U.S. at p. 21 [―[P]re-emption should not be lightly 
inferred in this area, since the establishment of labor standards falls within the 
traditional police power of the State.‖].)  Thus, we consider whether there is 
evidence of a ― ‗ ―clear and manifest‖ ‘ ‖ congressional intent (Bronco Wine Co. v. 
Jolly (2004) 33 Cal.4th 943, 957) to bar at any level the regulation of employee 
retention during ownership transitions (see Metropolitan Life, supra, 471 U.S. at 
p. 749). 
Examining the text and structure of the NLRA, we discern no evidence that 
Congress affirmatively intended to leave the subject of employee retention 
unregulated by states and municipalities.  On the subject of employee hiring and 
firing, the text of the NLRA is, with one notable exception, resoundingly silent.  
It neither guarantees nor prohibits the retention of employees; it does not 
affirmatively protect new employers‘ latitude to hire and fire whomever they 
please, nor does it address in any way the power of states and localities to regulate 
the subject.  The only portion of the NLRA to speak to these matters, section 
8(a)(3), protects employees from discrimination on the basis of union affiliation; 
an employer may not use the power to hire and fire to exercise anti-union animus 
and eliminate pro-union employees from its workforce.  (See 29 U.S.C. 
§ 158(a)(3).) 
This silence leaves unrebutted the initial presumption that Congress did not 
intend preemption.  The NLRA‘s statutory text does not disturb state and local 
authority to address, as these entities see fit, matters of hiring and firing, authority 
traditionally recognized as a core incident of their police power.  (See De Canas v. 
Bica (1976) 424 U.S. 351, 356 [―States possess broad authority under their police 
powers to regulate the employment relationship to protect workers within the 
State.‖].)  Thus it is that states and localities have long been permitted to provide 
common law wrongful discharge remedies (e.g., Tameny v. Atlantic Richfield Co. 
 
19 
(1980) 27 Cal.3d 167) and enact statutes of general application regulating hiring 
and firing (e.g., Gov. Code, § 12900 et seq. [Cal. Fair Employment & Housing 
Act]) without intruding upon the NLRA‘s narrowly tailored concerns. 
The congressional silence concerning the subject matter of the Ordinance 
distinguishes this case from those where the United States Supreme Court has 
found Machinists preemption.  (See Machinists, supra, 427 U.S. 132.)  Without 
exception, preemption in each was traceable in part to specific statutory language 
evincing a congressional intent to regulate only at the federal level.  (See Chamber 
of Commerce of United States v. Brown, supra, 554 U.S. at pp. 67-69 [preempting 
a statute that effectively limited employer speech about union organizing, where 
Congress in §§ 7, 8(a), 8(b), and 8(c) of the NLRA (29 U.S.C. §§ 157, 158(a), (b), 
(c)) already had regulated the extent to which employer speech should be 
permitted]; Golden State Transit Corp. v. Los Angeles, supra, 475 U.S. at pp. 614-
618 [preempting municipal action that compelled a settlement, where Congress in 
§ 8(d) of the NLRA (29 U.S.C. § 158(d)) had imposed only a duty to bargain, not 
to agree]; Machinists, at pp. 143-151 [preempting a state bar on slowdowns, where 
Congress in § 8 of the NLRA (29 U.S.C. § 158) had already identified those 
economic weapons it found necessary to bar]; Teamsters Union v. Morton (1964) 
377 U.S. 252, 258-260 [preempting regulation of economic weapons, where 
Congress had already spoken in §§ 7 and 8 of the NLRA (29 U.S.C. §§ 157, 158) 
to the availability of economic weapons in obtaining negotiating concessions, and 
specifically to secondary boycotts in 29 U.S.C. § 187].) 
Instead, the Ordinance on its face appears of a piece with other state and 
local regulations upheld against claims of Machinists preemption, a part of the 
background tapestry of state and local laws against which unions and employers 
may negotiate when reaching the terms of a collective bargaining agreement. 
While the Ordinance regulates the existence of the employment relationship rather 
 
20 
than just its terms, this distinction is not crucial; federal courts routinely have 
upheld as not preempted under Machinists employment laws that broadly regulate 
hiring and firing.  (See St. Thomas-St. John Hotel v. Govern. of U.S. VI (3d Cir. 
2000) 218 F.3d 232, 243 [upholding a Virgin Islands wrongful termination statute 
as a minimum substantive requirement permitted under Metropolitan Life and Fort 
Halifax]; Peabody Galion v. Dollar (10th Cir. 1981) 666 F.2d 1309, 1316-1319 
[upholding an Okla. wrongful discharge statute against claimed Machinists 
preemption].)  Like the health benefits law in Metropolitan Life, supra, 471 U.S. 
724, and the severance benefits law in Fort Halifax, supra, 482 U.S. 1, the 
Ordinance regulates the terms and conditions of employment, extending the 
benefit of a potential temporary extension of employment to each employee 
individually, rather than conferring a collective right, and applying the benefit to 
all employees equally, irrespective of union or nonunion status.  (See Fort Halifax, 
at pp. 20-21; Metropolitan Life, at p. 755.)7 
What the Ordinance does not do, in contrast, is ― ‗[enter] into the 
substantive aspects of the bargaining process to an extent Congress has not 
countenanced.‘ ‖  (Machinists, supra, 427 U.S. at p. 149.)  It does not regulate the 
                                              
7  
The Ordinance‘s neutrality is essential to its validity.  Just as employment 
regulations aimed solely at unionized workers may intrude into aspects of 
organizing and bargaining Congress intended the states not to regulate, so may 
regulations that apply only to nonunionized workers and select out unionized 
workers for disfavored status be preempted as forcing employees to choose 
between exercising their right to enter a collective bargaining agreement and 
having their state-granted employment rights enforced.  (See Livadas v. Bradshaw 
(1994) 512 U.S. 107, 116-118.)  In contrast, employment regulations, such as the 
90-day retention period imposed by the Ordinance, that ―affect union and 
nonunion employees equally . . . neither encourage nor discourage the collective-
bargaining processes that are the subject of the NLRA.‖  (Metropolitan Life, 
supra, 471 U.S. at p. 755.) 
 
21 
process by which a bargaining agreement may be reached.  Nor does the 
Ordinance speak directly to the process of organizing; rather, it temporarily 
preserves the status quo, whatever that might be, whether the workforce is 
unionized or not.  (See Metropolitan Life, supra, 471 U.S. at p. 755 [―Nor do 
[local labor and employment standards] have any but the most indirect effect on 
the right of self-organization established in the Act.‖].)  And, while the Ordinance 
does confer on each employee, as an individual, certain rights the individual 
employees might otherwise have obtained only through organizing and collective 
bargaining, it is well established that so doing is no basis for Machinists 
preemption.  (See Fort Halifax, supra, 482 U.S. at pp. 21-22; Metropolitan Life, at 
pp. 751-758; Malone v. White Motor Corp. (1978) 435 U.S. 497, 504-505.)8 
While recognizing that the Ordinance on its face does not regulate 
organizing or bargaining, Grocers contends it is nevertheless preempted because 
of its indirect effects on those subjects.  Grocers‘ principal argument, accepted by 
the Court of Appeal majority, is that the Ordinance alters how the NLRB would 
                                              
8  
Grocers argue that the Ordinance cannot qualify as a generally applicable 
employment standard because it regulates only a single industry.  (See Chamber of 
Commerce of U.S. v. Bragdon (9th Cir. 1995) 64 F.3d 497, 504.)  However, the 
Ninth Circuit Court of Appeals has effectively repudiated Bragdon (see Associated 
Buil. and Contrac., Sout. Cal. v. Nunn (9th Cir. 2004) 356 F.3d 979, 990), and a 
majority of other circuits have limited Bragdon to its facts (see Rondout Elec., Inc. 
v. NYS Dept. of Labor (2d Cir. 2003) 335 F.3d 162, 169; St. Thomas-St. John 
Hotel v. Govern. of U.S. VI, supra, 218 F.3d at p. 244; but see 520 South Michigan 
Ave. Associates v. Shannon (7th Cir. 2008) 549 F.3d 1119, 1131-1137 [following 
Bragdon]).  Bragdon also has been squarely rejected by the only previous 
California decision to consider its reasoning.  (See Southern California Edison Co. 
v. Public Utilities Com., supra, 140 Cal.App.4th at pp. 1103-1104.)  Nothing in 
the NLRA indicates Congress intended to prevent states and localities from 
attacking employment problems industry by industry, as they traditionally have.  
(See, e.g., Martinez v. Combs (2010) 49 Cal.4th 35, 57 [discussing Industrial 
Welfare Com.‘s historic industry-by-industry approach to wage orders].) 
 
22 
decide successorship questions, i.e., whether and to what extent labor liabilities 
and bargaining or contractual obligations should follow when ownership of a 
unionized business is transferred from one entity to another. 
The NLRA does not speak to successorship.  Consequently, successorship 
questions are governed by federal common law.  (Howard Johnson Co. v. Hotel 
Employees (1974) 417 U.S. 249, 255-256.)  In a trilogy of cases (John Wiley & 
Sons v. Livingston (1964) 376 U.S. 543; NLRB v. Burns Security Services (1972) 
406 U.S. 272; Howard Johnson Co., supra, 417 U.S. 249), the United States 
Supreme Court outlined the circumstances and considerations that might lead a 
court to conclude the new owner of a business should be bound by an existing 
bargaining agreement entered into by its predecessor or have an independent duty 
to negotiate with a union that had represented the predecessor workforce.9 
A premise of Grocers‘ general argument is that these cases ratify a new 
owner‘s right, untouchable by state or local regulation, not to hire its predecessor‘s 
employees upon acquiring a new store.  The Court of Appeal majority agreed; 
reversing the trial court on this point, it embraced the existence of such a right as a 
basis for federal preemption.  Upon close examination, these authorities do not 
support Grocers‘ claim. 
The language Grocers and the Court of Appeal majority rely upon traces to 
NLRB v. Burns Security Services, supra, 406 U.S. 272.  In the course of analyzing 
                                              
9  
As the court subsequently summarized, successorship depends on a 
consideration of the ―totality of the circumstances,‖ including ―whether the 
business of both employers is essentially the same; whether the employees of the 
new company are doing the same jobs in the same working conditions under the 
same supervisors; and whether the new entity has the same production process, 
produces the same products, and basically has the same body of customers.‖  (Fall 
River Dyeing & Finishing Corp. v. NLRB (1987) 482 U.S. 27, 43.) 
 
23 
a new employer‘s legal obligations, the United States Supreme Court explained:  
―The [NLRB] has never held that the National Labor Relations Act itself requires 
that an employer who submits the winning bid for a service contract or who 
purchases the assets of a business be obligated to hire all of the employees of the 
predecessor though it is possible that such an obligation might be assumed by the 
employer.‖  (Id. at p. 280, fn. 5, italics added.)  The Supreme Court reiterated the 
point the following year, noting that ―the purchaser [of a business] is not obligated 
by the Act to hire any of the predecessor‘s employees . . . .‖  (Golden State 
Bottling Co. v. NLRB (1973) 414 U.S. 168, 184, fn. 6, italics added, citing Burns, 
at p. 280, fn. 5.) 
Notwithstanding these statements, the petitioner union in Howard Johnson 
Co. v. Hotel Employees, supra, 417 U.S. 249, contended federal common law and 
the existing collective bargaining agreement should be interpreted so that ― ‗the 
successor does not have the right not to hire . . . .‘ ‖  (Id. at p. 261, fn. 7.)  The 
Supreme Court rejected the argument:  ―What the Union seeks here is completely 
at odds with the basic principles this Court elaborated in Burns.  We found there 
that nothing in the federal labor laws ‗requires that an employer . . . who purchases 
the assets of a business be obligated to hire all of the employees of the predecessor 
though it is possible that such an obligation might be assumed by the employer.‘ ‖  
(Id. at p. 261, quoting NLRB v. Burns Security Services, supra, 406 U.S. at p. 280, 
fn. 5, and citing Golden State Bottling Co. v. NLRB, supra, 414 U.S. at p. 184, 
fn. 6.)  The court thereafter used shorthand for the principle that the NLRA and 
federal common law do not compel retention of predecessor employees.  (See 
Howard Johnson, at p. 262 [―Clearly, Burns establishes that Howard Johnson had 
the right not to hire any of the former Grissom employees, if it so desired.‖]; id. at 
p. 264 [recognizing that ―employees of the terminating employer have no legal 
right to continued employment with the new employer‖ and acknowledging ―the 
 
24 
new employer‘s right to operate the enterprise with his own independent labor 
force‖]; see also Fall River Dyeing & Finishing Corp. v. NLRB, supra, 482 U.S. at 
p. 40 [explaining that Burns held a ―successor is under no obligation to hire the 
employees of its predecessor‖].) 
That the United States Supreme Court was using ―right‖ in this instance in 
the sense of a Hohfeldian privilege10 against any asserted duty arising from federal 
common law or an existing collective bargaining agreement to hire particular 
workers, and not to describe an immunity from state or local regulation of such 
hiring,11 is clear from context.  This was what Burns had said (see NLRB v. Burns 
Security Services, supra, 406 U.S. at p. 280, fn. 5), what Golden State Bottling had 
said (see Golden State Bottling Co. v. NLRB, supra, 414 U.S. at p. 184, fn. 6), and 
what Howard Johnson itself said when it explained that ―nothing in the federal 
labor laws ‗requires‘ ‖ a business purchaser to hire predecessor employees.  
(Howard Johnson Co. v. Hotel Employees, supra, 417 U.S. at p. 261.)12  Howard 
Johnson was not a preemption case and did not at any point contemplate whether a 
successor‘s hiring choices might be regulated or restricted by sources other than an 
existing collective bargaining agreement or federal common law.  It thus does not 
                                              
10  
See Hohfeld, Fundamental Legal Conceptions as Applied in Judicial 
Reasoning and Other Legal Essays (1919) pp. 38-50 (explaining a ―privilege‖ as 
the negation of a duty to another). 
11  
As Justice Kennedy has explained, Machinists preemption arises when the 
NLRA confers on an entity in ―the familiar Hohfeldian terminology . . . an 
immunity from‖ state and local regulation.  (See Golden State Transit Corp. v. Los 
Angeles (1989) 493 U.S. 103, 115 (dis. opn. of Kennedy, J.).) 
12  
Indeed, it was what the court had said as far back as 1937.  (See Labor 
Board v. Jones & Laughlin (1937) 301 U.S. 1, 45 [―The Act does not interfere with 
the normal exercise of the right of the employer to select its employees or to 
discharge them.‖ (Italics added.)].) 
 
25 
resolve the preemption issue here.  (See R. A. V. v. St. Paul (1992) 505 U.S. 377, 
386, fn. 5 [―It is of course contrary to all traditions of our jurisprudence to 
consider the law on this point conclusively resolved by broad language in cases 
where the issue was not presented or even envisioned.‖].)13 
The dissent‘s assertion otherwise, viz., that the NLRA was founded on and 
assumes an employer‘s unfettered right to select its employees, cannot withstand 
historical scrutiny.  For decades, the United States Supreme Court had invoked 
employer liberty of contract to strike down employee-protective legislation.  (See, 
e.g., Adair v. United States (1908) 208 U.S. 161, 174 [holding unconstitutional a 
federal ban on yellow-dog contracts conditioning hiring on an agreement not to 
join a union because ―it is not within the functions of government . . . to compel 
any person in the course of his business and against his will to accept or retain the 
personal services of another . . .‖]; see also Coppage v. Kansas (1915) 236 U.S. 1, 
9-21 [invalidating a state ban on identical grounds].)  Far from yielding to such 
edicts, Congress in the NLRA defied them.  (See 29 U.S.C. § 158(a)(3) 
[prohibiting yellow-dog contracts].)14  The Supreme Court acceded to this 
                                              
13  
We observe that the United States Court of Appeals for the District of 
Columbia Circuit, considering essentially the identical claim, viz., that 
successorship principles compelled preemption of a local 90-day retention 
ordinance, has similarly concluded that nothing in the NLRA guarantees to new 
employers the right to refuse to hire predecessor employees, or even the right to 
refuse to recognize a union constituted of them; thus, ―[a]pplication of the 
successorship doctrine under [a 90-day retention ordinance] . . . would not require 
the employer to do anything that it has a right under the NLRA to refuse.‖  (Wash. 
Serv. Contractors v. Dist. of Columbia (D.C. Cir. 1995) 54 F.3d 811, 817, cert. 
den. (1996) 516 U.S. 1145.) 
14  
If an employer‘s liberty of contract to hire whom it chooses truly were a 
foundation of the NLRA, the Act‘s proponents would have mentioned as much in 
support of the measure.  They did not.  (See, e.g., Remarks of Sen. Wagner, 79 
Cong. Rec. 2371 (daily ed. Feb. 21, 1935) [the NLRA, also known as the Wagner 
 
(footnote continued on next page) 
 
26 
judgment, reversing course and holding that both Congress and the several states 
could constrict an employer‘s freedom to hire without violating liberty of contract.  
(See Labor Board v. Jones & Laughlin, supra, 301 U.S. at pp. 43-46 [rejecting 
liberty of contract challenge to the NLRA]; Lincoln Union v. Northwestern Co. 
(1949) 335 U.S. 525, 534-537 [rejecting Adair and Coppage and upholding a 
state‘s right similarly to regulate employer hiring].)  To start from the premise that 
the NLRA is founded upon employer liberty of contract, as the dissent does, is to 
stand history on its head.15 
We think the closer question is whether, as Grocers contend, the Ordinance 
is preempted because its indirect effects impermissibly intrude on successorship 
determinations that Congress intended to leave free of local regulation.  The party 
asserting preemption, Grocers, has the burden of demonstrating both the minor 
and major premises:  that the Ordinance intrudes on successorship determinations, 
                                                                                                                                                              
(footnote continued from previous page) 
Act, ―merely provides that employees, if they desire to do so, shall be free to 
organize for their mutual protection or benefit‖]; Remarks of Sen. Wagner, 79 
Cong. Rec. 6184 (daily ed. Apr. 23, 1935) [decrying employers‘ abuse of their 
ability to hire and fire as an impediment to economic recovery and describing the 
NLRA as a corrective measure]; Sen.Rep. No. 74-573, 1st Sess. pp. 1-4 (1935) 
[discussing the NLRA‘s purposes without mentioning protection of employer 
liberty of contract].)  Instead, it was the NLRA‘s opponents who invoked 
employer liberty of contract in arguing against the Act‘s constitutionality.  (See, 
e.g., Remarks of Sen. Hastings, 79 Cong. Rec. 7676-7680 (daily ed. May 15, 
1935).) 
15  
The dissent acknowledges the NLRA enacted what were new, fiercely 
contested restrictions on an employer‘s liberty of contract.  In so doing, the dissent 
implicitly surrenders the larger point as well:  the NLRA addresses employer 
liberty of contract solely to limit it; employer liberty of contract was defended 
only by those who opposed the Act.  (Ante, at fn. 14; see also Labor Board Cases 
(1937) 301 U.S. 76, 103 (dis. opn. of McReynolds, J.) [arguing the NLRA should 
be struck down for violating an employer‘s right to ―freely select[] those to whom 
his [business] operations are to be entrusted‖].) 
 
27 
and that Congress did not want such indirect effects.  (See Bronco Wine Co. v. 
Jolly, supra, 33 Cal.4th at pp. 956-957.)  Because neither premise has been 
established, we decline to find preemption on this basis as well. 
The successorship inquiry is highly fact dependent, to be decided on a case-
by-case basis after consideration of numerous factors.  (See Fall River Dyeing & 
Finishing Corp. v. NLRB, supra, 482 U.S. at p. 43; Howard Johnson Co. v. Hotel 
Employees, supra, 417 U.S. at p. 256.)  The United States Supreme Court has not 
had occasion to consider whether in assessing business continuity for 
successorship purposes a temporary, involuntary retention of a workforce is 
materially different from a permanent, voluntary retention, but language in the 
court‘s opinions supports the view that it is.  (See Fall River Dyeing, at p. 41 
[considering as relevant to successorship whether a ―new employer makes a 
conscious decision‖ to retain employees, because it demonstrates ―the employer 
intends to take advantage of the trained work force of its predecessor‖]; NLRB v. 
Burns Security Services, supra, 406 U.S. at p. 278 [upholding the imposition of a 
duty to bargain based in part on the fact a successor employer had ―selected as its 
work force the employees of the previous employer‖].) 
The NLRB likewise has not formally spoken to the effect of a 90-day 
retention ordinance on the successorship inquiry, but several of the agency‘s 
administrative law judges (ALJ‘s) have.  In United States Services Industries, Inc. 
(NLRB Dec. 13, 1995, No. 5-CA-24575 (1995 NLRB Lexis 1151, *11-*13)), an 
ALJ imposed a bargaining obligation on a new employer because there was 
substantial business continuity, as the employer had conceded.  But 
notwithstanding that concession, the employer argued it should not succeed to the 
predecessor‘s bargaining obligation because its initial hiring was dictated by a 
temporary retention ordinance.  Because the NLRB had not as yet formally 
 
28 
differentiated between voluntary and involuntary initial hiring, the ALJ, not 
feeling at liberty to establish new precedent, rejected the argument.  (Id. at p. *12.) 
More helpful in discerning the current federal rule is M&M Parkside 
Towers LLC (NLRB Jan. 30, 2007, No. 29-CA-27720 (2007 NLRB Lexis 27)).  
There, an ALJ found an obligation to bargain where the new employer was 
running the same business with the same employees, who had been initially hired 
pursuant to a 90-day retention ordinance but thereafter retained voluntarily based 
on their satisfactory performance.  (Id. at pp. *11-*14.)  Although the employer 
argued that in the absence of a retention ordinance it would not have hired the 
predecessor‘s employees, the ALJ rejected the argument inter alia for want of 
proof.  Because the employer had offered no lawful, nondiscriminatory reason for 
why it would have refused to hire the predecessor employees, it had failed to 
establish as a factual matter that the retention ordinance affected the initial hiring.  
(Id. at p. *13.) 
Of significance, the ALJ embraced the NLRB general counsel‘s argument 
that the obligation to bargain as a successor arose only after expiration of the 
initial 90-day period.  During the temporary retention period, whether the new 
employer would ultimately retain a majority, or indeed any, of the predecessor 
workforce was unclear.  Only on day 113—when the new employer was free of 
any retention ordinance restrictions, had evaluated each employee‘s performance, 
had judged each satisfactory, and had voluntarily extended to each an offer of 
permanent employment—did a bargaining obligation attach.  (M&M Parkside 
Towers LLC, supra, 2007 NLRB Lexis 27, at pp. *6-*8, *15-*18.)16 
                                              
16  
A similar result would have obtained if the employer had voluntarily 
offered permanent employment to a majority of its predecessor‘s employees 
 
(footnote continued on next page) 
 
29 
Summarizing the import of these decisions, the federal district court in 
Rhode Island Hospitality Assn. v. City of Providence (D.R.I. Mar. 31, 2011, No. 
09-527-ML) __ F.Supp.2d ___ [2011 U.S. Dist. Lexis 34821] recently concluded:  
―[E]xisting case law indicates that the successor employer will be obligated to 
bargain with [a union] only if the successor employer retains its predecessor‘s 
employees beyond the mandatory employment period or if it extends an offer for 
permanent employment prior to expiration of the mandatory retention period.‖  
(Id. at pp. *39-*40.)  We agree.  Until that point, the predecessor‘s employees are 
essentially probationary and no basis exists for concluding one of the prerequisites 
of a successorship bargaining obligation, the hiring of a majority of the 
predecessor‘s employees (see Fall River Dyeing & Finishing Corp. v. NLRB, 
supra, 482 U.S. at p. 47; NLRB v. Burns Security Services, supra, 406 U.S. at 
p. 278), will come to pass.  It follows that retention ordinances like the Ordinance 
here do not dictate the outcomes of the successorship inquiry in any way that 
would call for Machinists preemption.  (Rhode Island Hospitality Assn., at pp. 
*41-*42; see also Wash. Serv. Contractors v. Dist. of Columbia, supra, 54 F.3d at 
pp. 816-817.) 
Additionally, we can discern in the NLRA no clear and manifest 
congressional intent to foreclose indirect impacts on successorship.  As with any 
preemption question, ― ‗ ―[t]he purpose of Congress is the ultimate touchstone‖ ‘ ‖ 
(Metropolitan Life, supra, 471 U.S. at p. 747), and on this point we find neither 
textual nor historical support.  Successorship is a question of federal common law 
because ―[n]o provision of the [NLRA] even mentions successorship.‖  (McLeod, 
                                                                                                                                                              
(footnote continued from previous page) 
before expiration of the 90 days.  (M&M Parkside Towers LLC, supra, 2007 
NLRB Lexis 27, at p. *17.) 
 
30 
Rekindling Labor Law Successorship in an Era of Decline (1994) 11 Hofstra Lab. 
L.J. 271, 342, fn. 289.)  By ignoring entirely the issue of successorship, Congress 
left no indication of any views on the matter.  Accordingly, nothing suggests it 
intended states and their subdivisions to be displaced from regulating in any 
otherwise permissible way that could affect, even incidentally, how a federal court 
or agency ultimately might decide an individual successorship question.17 
In a related vein, Grocers contend the Ordinance affects successorship by 
preserving unionized workplaces intact, preventing a new owner from hiring 
without regard to union status, and placing new owners at risk from unfair labor 
practice charges if they elect not to retain a significant portion of the workforce 
after expiration of the temporary 90-day window.  What these arguments omit is 
that the Ordinance applies equally to unionized and nonunionized workplaces.  It 
does not selectively preserve or favor unionization or unionized workers; it simply 
preserves, temporarily, the status quo, whatever that might be.  Just as an 
employer taking over a formerly unionized workplace might, if left to its own 
devices, hire a less union-friendly workforce through regression to the mean, 
                                              
17  
We do not deal here with legislation whereby a state or locality has 
specifically regulated the collective bargaining process, either by imposing on 
state-defined successors a duty to bargain and assessing state law sanctions for the 
refusal to bargain (Com. Edison Co. v. Intern. Broth. of Elec. Workers (N.D.Ill. 
1997) 961 F.Supp. 1169, 1181-1183) or by obligating state-defined successors to 
agree to the terms of existing bargaining agreements on a going-forward basis 
rather than negotiate their own terms with any duly authorized bargaining 
representative (United Steelworkers v. St. Gabriel’s Hosp. (D.Minn. 1994) 871 
F.Supp. 335, 342-344).  (See Rhode Island Hospitality Assn. v. City of Providence, 
supra, __ F.Supp.2d at p. ___ [2011 U.S. Dist. Lexis 34821, at pp. *41-*42] 
[distinguishing retention ordinances from such direct regulations of the bargaining 
process].)  Such regulations of the very subject matter Congress expressly did 
choose to regulate in enacting the NLRA understandably are preempted. 
 
31 
rather than because of any animus, so might an employer taking over a formerly 
nonunionized or even anti-union workplace through a similar effect tend to wind 
up with a more pro-union workforce in the absence of the Ordinance.  In the 
aggregate, a new owner hiring nonmanagement employees from the pool dictated 
by the Ordinance is neither more nor less likely to wind up with pro-union workers 
than if it were to hire freely from the workforce at large, assuming anti-union 
animus truly plays no part in its hiring decisions, as the NLRA demands.  
(29 U.S.C. § 158(a)(3); Howard Johnson Co. v. Hotel Employees, supra, 417 U.S. 
at p. 262, fn. 8; NLRB v. Burns Security Services, supra, 406 U.S. at pp. 280-281, 
fn. 5; Phelps Dodge Corp. v. Labor Board (1941) 313 U.S. 177, 183-185.) 
Nor does the Ordinance place the new owner at greater risk of an unfair 
labor practice charge than were there no Ordinance.  Irrespective of the Ordinance, 
a new owner would be subject to an unfair labor practice charge if it manipulated 
its hiring specifically to discriminate against union members and avoid 
successorship obligations.  (Great Lakes Chemical Corp. v. N.L.R.B. (D.C. Cir. 
1992) 967 F.2d 624, 627-628; see Howard Johnson Co. v. Hotel Employees, 
supra, 417 U.S. at p. 262, fn. 8.)  In deciding whom to hire from the Ordinance 
pool and whom to retain or dismiss at the conclusion of the 90-day period, a new 
owner has the same freedom to choose employees without regard to union status 
or sentiment, and the same theoretical exposure to an unfair labor practice charge 
if it were to allow anti-union animus to enter its decisionmaking, as it would 
without the Ordinance.18 
                                              
18  
More generally, there is, as the District of Columbia Circuit has recognized, 
no federal right to a nonunion workplace.  (See Wash. Serv. Contractors v. Dist. of 
Columbia, supra, 54 F.3d at p. 817.)  What matters under the NLRA is the 
employees‘ choice of a bargaining representative (or no representative).  (E.g., 
Labor Board v. Jones & Laughlin, supra, 301 U.S. at p. 33 [The NLRA 
 
(footnote continued on next page) 
 
32 
Grocers posit the hypothetical of a union organizing and being named 
bargaining representative for the workplace within the first 90 days, then filing an 
unfair labor practice charge if many or most of the employees are discharged and 
the new employer refuses to recognize the union.  They do not explain how this 
scenario is a particular risk occasioned by the Ordinance.  If the retained workers 
were already represented by a union, there would be no occasion for an immediate 
organizing drive, while if they were not, a union could mount the very same 
organizing drive absent the Ordinance and would be as likely to file the very same 
unfair labor practice charge if the response was to dismiss employees en masse. 
We are not the first court to consider these questions.  The City is not 
unique in California in enacting a worker retention ordinance, nor is California 
alone in having its municipalities do so.19  A small but growing number of federal 
courts have considered the argument that such ordinances are preempted under 
Machinists (see Machinists, supra, 427 U.S. 132); to a one, they have concluded, 
as we do, that neither indirect effects on successorship nor any other aspect of the 
ordinances gives rise to preemption.  (See Wash. Serv. Contractors v. Dist. of 
Columbia, supra, 54 F.3d at pp. 817-818 [D.C. retention ordinance does not 
―disturb[] the process established by the NLRA for resolving labor disputes‖ and 
is permissible ―substantive employee protective legislation having nothing to do 
with rights to organize or bargain collectively‖]; Rhode Island Hospitality Assn. v. 
                                                                                                                                                              
(footnote continued from previous page) 
―safeguard[s] the right of employees to self-organization and to select 
representatives of their own choosing for collective bargaining or other mutual 
protection without restraint or coercion by their employer.‖].)  Whether its 
employees prefer representation is, as a purely legal matter, of no moment to an 
employer, and whatever its employees choose, an employer under the NLRA is 
bound to respect.  (See 29 U.S.C. §§ 158(a)(2), (5).) 
19  
See ante, footnote 1. 
 
33 
City of Providence, supra, __ F.Supp.2d at p. ___ [2011 U.S. Dist. Lexis 34821, at 
p. *42] [Providence retention ordinance ―is primarily designed to provide 
temporary job protection to both unionized and nonunionized employees[,] which 
does not constitute a significant intrusion into the equitable collective bargaining 
process established by the NLRA‖]; Alcantara v. Allied Properties, LLC 
(E.D.N.Y. 2004) 334 F.Supp.2d 336, 345 [N.Y.C. retention ordinance ―does not 
conflict with or inhibit the bargaining or dispute resolution process established by 
the NLRA,‖ nor does it ―regulate economic self-help activities‖].)  We join the 
developing consensus. 
We close with an observation concerning our role.  ―In labor pre-emption 
cases . . . our office is not to pass judgment on the reasonableness of state [or 
local] policy . . . .‖  (Livadas v. Bradshaw, supra, 512 U.S. at p. 120.)  When 
evaluating claims of NLRA preemption, we may not substitute our own views of 
sound economic policy for those of the elected branches.  (See St. Thomas-St. 
John Hotel v. Govern. of U.S. VI, supra, 218 F.3d at p. 246 [rejecting the 
―unsettling supposition‖ that courts should use preemption to strike down local 
hiring and firing laws as impermissible intrusions into ―an area that has 
traditionally been left to the freedom of contract between an employer and an 
employee‖].)  Rather, we inquire solely into whether the challenged regulation is 
one Congress sought to preclude; if the text and structure of the NLRA 
demonstrate an affirmative intent to leave the subject matter of the Ordinance 
untouched by state and local regulation, only then may we find it preempted.  
Having found no such indication, we conclude the presumption against 
preemption has not been rebutted and Machinists does not apply. 
III.  Equal Protection 
As an alternate basis for affirmance, Grocers contend the Ordinance 
violates the equal protection clauses of both the state and federal Constitutions.  
 
34 
(U.S. Const., 14th Amend.; Cal. Const., art. I, § 7(a).)  We consider the question 
de novo.  (E.g., Garcia v. Four Points Sheraton LAX (2010) 188 Cal.App.4th 364, 
381.)  We conclude the Ordinance is constitutional. 
 
A.  Constitutional Principles 
As the trial court concluded, and as all parties agree, because the Ordinance 
involves neither suspect classifications nor fundamental rights or interests it is 
subject only to ―rational basis‖ or ―rational relationship‖ review.  (See Hernandez 
v. City of Hanford (2007) 41 Cal.4th 279, 299.)  ― ‗[I]n areas of social and 
economic policy, a statutory classification that neither proceeds along suspect 
lines nor infringes fundamental constitutional rights must be upheld against equal 
protection challenge if there is any reasonably conceivable state of facts that could 
provide a rational basis for the classification.‘ ‖  (Warden v. State Bar (1999) 21 
Cal.4th 628, 644, quoting FCC v. Beach Communications, Inc. (1993) 508 U.S. 
307, 313 (italics added by Warden).)  So long as the challenged distinction 
―bear[s] some rational relationship to a conceivable legitimate state purpose‖ 
(Westbrook v. Mihaly (1970) 2 Cal.3d 765, 784; accord, Hernandez, at p. 299; 
Warden, at p. 641), it will pass muster; once we identify ― ‗ ―plausible reasons‖ for 
[the classification] ―our inquiry is at an end‖ ‘ ‖ (Warden, at p. 644, quoting FCC 
v. Beach Communications, Inc., at p. 313).  Of significance to our inquiry, 
―because we never require a legislature to articulate its reasons for enacting a 
statute, it is entirely irrelevant for constitutional purposes whether the conceived 
reason for the challenged distinction actually motivated the legislature.‖  (FCC v. 
Beach Communications, Inc., at p. 315.)  The burden is on Grocers, as the party 
challenging the Ordinance, to negate any such rational basis or relationship to a 
conceivable legitimate purpose.  (FCC v. Beach Communications, Inc., at p. 315; 
Hernandez, at p. 299.) 
 
35 
 
B.  Application 
Subject to a union‘s and employer‘s ability to opt out through collective 
bargaining (L.A. Mun. Code, § 181.06), the Ordinance applies to retail stores over 
15,000 square feet in size that primarily sell household food for offsite 
consumption—in other words, large grocery stores (id., § 181.01(E); see also id., 
§ 12.24(U)(14)(a) [excluding membership stores]).  Grocers take issue with four 
distinctions implicit in this scope:  (1) between nonmember grocery stores and 
membership stores; (2) between grocery stores more than and less than 15,000 
square feet in size; (3) between grocery stores and restaurants; and (4) between 
grocery stores where a unionized workforce has agreed to different terms and 
those where it has not. 
In evaluating the City‘s determination of the scope of the Ordinance, we are 
mindful that the decision how broadly and in what manner to attack perceived 
problems is for the elected branches in the first instance.  Past decisions by both 
this court and the United States Supreme Court ―establish that, under the rational 
relationship test, the state may recognize that different categories or classes of 
persons within a larger classification may pose varying degrees of risk of harm, 
and properly may limit a regulation to those classes of persons as to whom the 
need for regulation is thought to be more crucial or imperative.‖  (Warden v. State 
Bar, supra, 21 Cal.4th at p. 644, citing American Bank & Trust Co. v. Community 
Hospital (1984) 36 Cal.3d 359, 371, and Williamson v. Lee Optical Co. (1955) 348 
U.S. 483, 489.)  ―Evils in the same field may be of different dimensions and 
proportions, requiring different remedies.  Or so the legislature may think.  
[Citation.]  Or the reform may take one step at a time, addressing itself to the 
phase of the problem which seems most acute to the legislative mind.‖  
(Williamson, at p. 489.)  Such line-drawing is the province of legislative bodies, 
and ―the precise coordinates of the resulting legislative judgment [are] virtually 
 
36 
unreviewable, since the legislature must be allowed leeway to approach a 
perceived problem incrementally.‖  (FCC v. Beach Communications, Inc., supra, 
508 U.S. at p. 316.) 
Here, the City elected to impose temporary job retention requirements on 
large grocery stores, but not on, e.g., restaurants or membership clubs that also sell 
food.  (See L.A. Mun. Code, §§ 12.24(U)(14)(a), 181.01(E).)  The City believed 
supermarkets function as community anchors, a judgment it is not our role to 
question.  (See id., § 181.00 [―Supermarkets and other grocery retailers are the 
main points of distribution for food and daily necessities for the residents of Los 
Angeles and are essential to the vitality of any community.‖].)  Given their 
perceived significance, the City rationally could conclude it was more important to 
ensure stability and continuity at such entities than at restaurants or members-only 
stores that arguably do not serve a similarly crucial function.  The trial court 
correctly rejected Grocers‘ equal protection argument on these grounds. 
As to the constitutionality of the Ordinance‘s size distinction, the 
Ordinance on its face has as one of its purposes the promotion of job security and 
the minimization of community disruption that arises from job losses and changes.  
(See L.A. Mun. Code, § 181.00 [―Through this ordinance, the City seeks to sustain 
the stability of a workforce that forms the cornerstones of communities in Los 
Angeles.‖].)  The City rationally could conclude both that disruptions at larger 
stores, involving larger workforces, would have a larger impact on the community, 
and that larger stores would be more readily positioned to absorb any short-term 
burdens the Ordinance‘s requirements might impose on employers.  (See Garcia v. 
Four Points Sheraton LAX, supra, 188 Cal.App.4th at p. 384 [upholding size 
classification as rationally related to a business‘s ability to bear regulatory 
burdens].)  Both Congress and the state Legislature frequently, and 
constitutionally, have incorporated exceptions for smaller employers when 
 
37 
regulating the employment relationship.  (See, e.g., 42 U.S.C. § 2000e(b) [tit. VII 
small-employer exception]; Gov. Code, § 12926, subd. (d) [Cal. Fair Employment 
& Housing Act small-employer exception].)  So long as we can identify a rational 
relationship between a classification and at least one legitimate purpose of an 
enactment, the classification will pass constitutional muster.  (See Hernandez v. 
City of Hanford, supra, 41 Cal.4th  at pp. 299-302 [rejecting an equal protection 
challenge to a store size classification because size was rationally related to 
community impact].) 
Finally, concerning the Ordinance‘s opt-out provision (L.A. Mun. Code, 
§ 181.06), the United States Supreme Court has made clear that affording 
employers and unions the right to opt out and negotiate their own terms increases 
the likelihood a given regulation will be found not preempted by the NLRA.  (Fort 
Halifax, supra, 482 U.S. at p. 22.)  An opt-out provision thus is rationally related 
to the desire to enact valid (nonpreempted) legislation, as well as to the legitimate 
goal of ―balanc[ing] the desirability of a particular substantive labor standard 
against the right of self-determination regarding the terms and conditions of 
employment.‖  (Ibid.; see also Viceroy Gold Corp. v. Aubry (9th Cir. 1996) 
75 F.3d 482, 490-491 [upholding labor protections subject to a collective 
bargaining opt-out provision because the Legislature rationally could have 
believed unionized workers are competent to negotiate their own protections]; 
Garcia v. Four Points Sheraton LAX, supra, 188 Cal.App.4th at pp. 385-386 
[applying Viceroy‘s rationale to uphold an L.A. Mun. Code collective bargaining 
opt-out provision identical to the one at issue here].) 
 
38 
DISPOSITION 
For the foregoing reasons, we reverse the Court of Appeal‘s judgment and 
remand this case for further proceedings consistent with this opinion. 
WERDEGAR, J. 
WE CONCUR: 
CANTIL-SAKAUYE, C. J. 
KENNARD, J. 
BAXTER, J. 
CHIN, J. 
CORRIGAN, J. 
 
 
1 
 
 
 
 
 
 
 
 
 
DISSENTING OPINION BY GRIMES, J. 
 
I respectfully dissent, finding City of Los Angeles Ordinance No. 177,231 
is preempted by the National Labor Relations Act (NLRA) (29 U.S.C. § 151 et 
seq.). 
 
In my view, the ordinance intrudes on the collective bargaining process in 
an extraordinary and fundamental way, at its very source.  It determines the 
individual workers who will comprise a new employer‘s work force for the first 90 
days of its operation.  During those 90 days, the new employer must provide 
employment to a group of workers it did not choose.  In addition, the new 
employer must provide to this mandated work force specified benefits (such as 
termination for cause only) for which the workers did not bargain and to which the 
new employer did not agree.  I recognize that governments, including states and 
municipalities, have the authority to impose minimum employment standards of 
general application – including restrictions on hiring and firing.  Consequently, an 
employer has no absolute right to choose its employees by, for example, 
discriminating on the basis of some group characteristic or union membership.  
But federal labor law does not permit a government mandate that an employer hire 
either a particular worker or a specific group of workers based on a group 
characteristic (or on anything else).  That fundamental choice is left under federal 
law to the employer and employee, that is, to the free play of economic forces.  
This has been clear since the Supreme Court first upheld the constitutionality of 
the NLRA in Labor Board v. Jones & Laughlin (1937) 301 U.S. 1, 45 (Jones & 
 
2 
Laughlin), when the high court said that the NLRA ―does not interfere with the 
normal exercise of the right of the employer to select its employees or to discharge 
them.‖ 
 
The point – that the NLRA does not interfere with an employer‘s selection 
of its work force – has been reiterated many times by the high court:  in NLRB v. 
Burns Security Services (1972) 406 U.S. 272, 294 (Burns) [an employer ―is 
ordinarily free to set initial terms on which it will hire the employees of a 
predecessor‖]; in Howard Johnson Co. v. Hotel Employees (1974) 417 U.S. 249, 
262 (Howard Johnson) [―Clearly, Burns establishes that [the new employer] had 
the right not to hire any of the former [employer‘s] employees, if it so desired‖]; 
and in Fall River Dyeing & Finishing Corp. v. NLRB (1987) 482 U.S. 27, 40 (Fall 
River Dyeing) [―[w]e further explained [in Burns] that the successor is under no 
obligation to hire the employees of its predecessor . . .‖].   
The majority says these high court precedents establish only a principle of 
federal common law, and have no bearing on the authority of state and local 
governments to require the hiring for 90 days of a particular bloc of workers.  
With this I cannot agree.  Under the preemption doctrine established in Machinists 
v. Wisconsin Emp. Rel. Comm’n (1976) 427 U.S. 132 (Machinists) and its 
progeny, the salient inquiry is ―whether Congress intended that the conduct 
involved be unregulated because left ‗to be controlled by the free play of 
economic forces.‘‖  (Id. at p. 140.)  The implicit right of the employer to select its 
employees in the first instance – recognized by the high court since 1937 – is, it 
seems to me, as fundamental to the structure of the NLRA as is the correlative 
express right of those selected employees to organize to secure the redress of 
grievances and to promote agreements with the employer on working conditions.  
(See Jones & Laughlin, supra, 301 U.S. at pp. 43-44.)  State or municipal 
regulation that directly interferes with that right is preempted by the NLRA under 
Machinists doctrine as surely as is regulation that is directed at the collective 
bargaining process itself.  And, even if we ignore the employer‘s right to select its 
 
3 
work force as a fundamental premise of the NLRA, the impact of the ordinance on 
the determination whether the new employer is a successor – and thus bound to 
bargain with the union selected by the predecessor‘s employees – likewise is an 
unpermitted intrusion on the collective bargaining process. 
1. 
The ordinance 
 
The City of Los Angeles (City) adopted the Grocery Worker Retention 
Ordinance in 2005.  (L.A. Ord. No. 177,231, adding ch. XVIII, § 181.00 et seq. to 
L.A. Mun. Code.)  The ordinance is described fully in the majority opinion.  In 
brief, it applies to grocery stores exceeding a specified size that undergo a change 
of ownership.  It gives nonmanagerial employees of the former owner who have 
worked for that owner for at least six months the right to demand employment by 
the new owner:  the new employer must select its employees from among that 
group, by seniority, and must retain them for 90 days, discharging them only for 
cause.  After 90 days, the new employer must prepare a written performance 
evaluation for each such employee and consider offering continued employment to 
those with satisfactory evaluations.  As the majority notes, other municipalities in 
California and elsewhere have adopted similar ordinances. 
2. 
The NLRA 
The NLRA ―is a comprehensive code passed by Congress to regulate labor 
relations in activities affecting interstate and foreign commerce.  As such it is of 
course the law of the land which no state law can modify or repeal.‖  (Nash v. 
Florida Industrial Commission (1967) 389 U.S. 235, 238.)  The NLRA declares 
the policy of the United States:  ―to eliminate . . . obstructions to the free flow of 
commerce . . . by encouraging the practice and procedure of collective bargaining 
and by protecting the exercise by workers of full freedom of association, self-
organization, and designation of representatives of their own choosing, for the 
purpose of negotiating the terms and conditions of their employment or other 
mutual aid or protection.‖  (29 U.S.C. § 151.) 
 
4 
The need for the NLRA flowed from a free market economy in which 
equality of bargaining power did not exist.  Employers were (and are) ―organized 
in the corporate or other forms of ownership association‖ and employees ―[did] 
not possess full freedom of association or actual liberty of contract . . . .‖  (29 
U.S.C. § 151.)  Congress found it unnecessary to say in the NLRA that the 
composition of an employer‘s work force is a matter of the employer‘s choice, but 
in our country, hiring has always occurred on an individual basis, one employee at 
a time:  the employer advertises, prospective workers apply, and the employer 
selects. 
The Supreme Court recognized this underlying premise of the NLRA 
almost immediately, when it said in 1937 that the NLRA ―does not prevent the 
employer ‗from refusing to make a collective contract and hiring individuals on 
whatever terms‘ the employer ‗may by unilateral action determine.‘‖  (Jones & 
Laughlin, supra, 301 U.S. at p. 45.)  The NLRA prohibits specified unfair labor 
practices by employers and unions (29 U.S.C. § 158) and empowers the National 
Labor Relations Board (NLRB) to prevent anyone from engaging in those unfair 
labor practices.  (29 U.S.C. § 160.)  The point of the NLRA was to ―restor[e] 
equality of bargaining power between employers and employees‖ (29 U.S.C. § 
151) by requiring an employer to bargain with ―representatives of [the workers‘] 
own choosing‖ (ibid.) – and not to ―interfere with the normal exercise of the right 
of the employer to select its employees or to discharge them.‖  (Jones & Laughlin, 
supra, 301 U.S. at p. 45.)   
Thus, the very foundation of the NLRA lies in a workplace composed of 
individuals selected by the employer.  The NLRA protects the rights of those 
individuals whom the employer has chosen to hire, to associate with each other, to 
organize themselves, and to designate representatives of their choosing to 
negotiate the terms and conditions of their employment.  (29 U.S.C. § 151.)  If the 
workers vote to select a union to represent them, the employer must negotiate with 
the union in a good faith effort to reach agreement on wages, hours and other 
 
5 
terms of employment.  The NLRA does not mandate that the parties reach 
agreement, only that they try to agree.  If they cannot agree, the NLRA establishes 
the rules of the battleground, protecting certain pressure tactics and prohibiting 
others, to keep the process fair. 
The NLRA specifies the single circumstance under which the NLRB may 
interfere with the employer‘s selection of its workers:  the employer cannot hire or 
fire based on union membership.  The NLRA specifies that an employer commits 
an unfair labor practice ―by discrimination in regard to hire or tenure of 
employment or any term or condition of employment to encourage or discourage 
membership in any labor organization . . . .‖  (29 U.S.C. § 158 (a)(3).)  Jones & 
Laughlin, after stating that the NLRA does not interfere with the employer‘s right 
to select or discharge its employees, tells us that ―[t]he employer may not, under 
cover of that right, intimidate or coerce its employees with respect to their self-
organization and representation, and, on the other hand, the Board is not entitled to 
make its authority a pretext for interference with the right of discharge when that 
right is exercised for other reasons than such intimidation and coercion.‖  (Jones & 
Laughlin, supra, 301 U.S. at pp. 45-46.)  Twelve years after deciding Jones & 
Laughlin, the high court announced the corollary principle that states may prohibit 
discrimination in hiring and firing against non-union workers.  (Lincoln Union v. 
Northwestern Co. (1949) 335 U.S. 525, 537 [―Just as we have held that the due 
process clause erects no obstacle to block legislative protection of union members, 
we now hold that legislative protection can be afforded non-union workers.‖].) 
The majority is mistaken in saying I have expressed here the view that the 
NLRA was founded on an employer‘s absolute right to select its employees.  
Plainly, the NLRA was not founded on an employer‘s liberty to discriminate 
against either union or non-union members because they are such.  In my view, 
regulations prohibiting unlawful discrimination and imposing minimum 
employment standards in no way undermine the foundation of the NLRA that each 
 
6 
workplace may be composed of individuals selected by the employer for reasons 
other than discrimination. 
The NLRA does not transform the fundamentally individual nature of the 
employment relationship.  Its focus is on the right of individual workers to band 
together, if they so choose, and to select representatives of their own choosing, to 
bargain with the employer who has hired them.  This is the base upon which the 
NLRA is constructed and from which all of its provisions flow.  Just as Jones & 
Laughlin made it clear that Congress did not intend in the NLRA to change the 
fundamental, individual nature of the employer-employee relationship, including 
―the right of the employer to select its employees‖ (Jones & Laughlin, supra, 301 
U.S. at p. 45), I conclude it necessarily follows that Congress did not intend to 
allow any other governmental entity to do so either.  To permit a city to mandate 
that a new employer hire the predecessor‘s employees as a group violates the 
fundamental structure of the NLRA and necessarily hands weapons of economic 
power to a group the employer did not choose to hire.  It is preempted under the 
doctrine established in Machinists and its progeny, to which I now turn. 
3. 
Machinists preemption 
Machinists examined the history of labor law preemption under the NLRA 
and identified two lines of preemption analysis.  The first is based on the primary 
jurisdiction of the NLRB to regulate conduct that is a protected right under section 
7 (29 U.S.C. § 157) or conduct that is an unfair labor practice in violation of 
section 8 of the NLRA (29 U.S.C. § 158).  State regulation of conduct that is 
protected under section 7 or an unfair labor practice under section 8 is preempted 
under what is now called Garmon preemption.  (San Diego Unions v. Garmon 
(1959) 359 U.S. 236, 244.)  Because the City‘s ordinance does not ―‗regulate 
activity that the NLRA protects, prohibits, or arguably protects or prohibits‘‖ 
(Chamber of Commerce of United States v. Brown (2008) 554 U.S. 60, 65 
(Brown)) under sections 7 and 8, there is no Garmon preemption. 
 
7 
But Machinists recognized ―a second line of pre-emption analysis . . . 
developed in cases focusing upon the crucial inquiry whether Congress intended 
that the conduct involved be unregulated because left ‗to be controlled by the free 
play of economic forces.‘‖  (Machinists, supra, 427 U.S. at p. 140.)  As Brown put 
it, Machinists preemption forbids both the NLRB and states from regulating 
conduct Congress intended be unregulated:  ―Machinists pre-emption is based on 
the premise that ‗―Congress struck a balance of protection, prohibition, and 
laissez-faire in respect to union organization, collective bargaining, and labor 
disputes.‖‘‖  (Brown, supra, 554 U.S. at p. 65; see id. p. 66 [holding statutes 
preempted under Machinists ―because they regulate within ‗a zone protected and 
reserved for market freedom‘‖].) 
Under Machinists, ―congressional intent to shield a zone of activity from 
regulation is usually found only ‗implicit[ly] in the structure of the Act,‘ [citation], 
drawing on the notion that ‗―[w]hat Congress left unregulated is as important as 
the regulations that it imposed,‖‘ [citation].‖  (Brown, supra, 554 U.S. at p. 68.)  
This is just such a case.  An employer‘s right to select the members of the work 
force with whose representatives it will be required to bargain, if they so choose, is 
the foundation on which the NLRA was built, unstated but implicit in its structure.  
This is a paradigm of the principle that what Congress left unregulated is fully as 
important as the regulations it imposed.  In my view, this alone is reason enough 
to conclude the City‘s ordinance, which stands in direct contradiction to one of the 
building blocks of the NLRA, cannot stand.   
Machinists arose from the collective bargaining process itself and the 
pressure tactics employed by both sides during that process.  In Machinists, the 
court found the state could not enjoin a union and its members from refusing to 
work overtime as part of a union effort to put economic pressure on the employer 
during contract negotiations.  (Machinists, supra, 427 U.S. at p. 133.)  The court 
observed that many of its past decisions concerning conduct ―left by Congress to 
the free play of economic forces‖ (id. at p. 147) involved union and employee 
 
8 
activities, but that ―self-help is of course also the prerogative of the employer 
because he, too, may properly employ economic weapons Congress meant to be 
unregulable.‖  (Ibid.)  Thus, ―‗[r]esort to economic weapons‘‖ was the right of 
both employer and employee, ―and the State may not prohibit the use of such 
weapons or ‗add to an employer‘s federal legal obligations in collective 
bargaining‘ any more than in the case of employees.‖  (Ibid.)  So, ―[w]hether self-
help economic activities are employed by employer or union, the crucial inquiry 
regarding pre-emption is the same:  whether ‗the exercise of plenary state 
authority to curtail or entirely prohibit self-help would frustrate effective 
implementation of the Act‘s processes.‘‖  (Id. at pp. 147-148.)  Congress meant 
that these activities ―were not to be regulable by States any more than by the 
NLRB‖ (id. at p. 149), and sanctioning state regulation of economic pressure 
―deemed by the federal Act ‗desirabl[y] . . . left for the free play of contending 
economic forces‘‖ amounts to ―‗denying one party to an economic contest a 
weapon that Congress meant him to have available.‘‖  (Id. at p. 150.)  Machinists 
concluded that such regulation by the state was ―impermissible because it ‗―stands 
as an obstacle to the accomplishment and execution of the full purposes and 
objectives of Congress.‖‘‖  (Id. at p. 151.) 
The majority concludes from Machinists and subsequent cases that the 
areas Congress intended to leave free of local regulation are confined to those 
relating to the process by which an agreement is reached on the terms of 
employment and not on the substance of those terms.  Certainly, it is true that the 
NLRA is not concerned with the substance of the parties‘ agreement, and cases 
since Machinists have made it clear that state or federal regulations establishing 
minimum terms of employment that protect union and nonunion workers alike 
―‗neither encourage[] nor discourage[] the collective-bargaining processes that are 
the subject of the NLRA‘‖ and are not preempted.  (Fort Halifax Packing Co. v. 
Coyne (1987) 482 U.S. 1, 21 (Fort Halifax) [Me. statute requiring employers to 
provide a one-time severance payment to employees in the event of a plant closing 
 
9 
was not preempted; ―establishment of a minimum labor standard does not 
impermissibly intrude upon the collective-bargaining process‖ (id. at p. 23)]; see 
also Metropolitan Life Ins. Co. v. Massachusetts (1985) 471 U.S. 724, 757 
(Metropolitan Life) [―[w]hen a state law establishes a minimal employment 
standard not inconsistent with the general legislative goals of the NLRA, it 
conflicts with none of the purposes of the Act‖; state law requiring that minimum 
mental health benefits be provided under certain insurance policies was not 
preempted (id. at p. 758)].) 
 But in my view, the ordinance profoundly interferes with the collective 
bargaining process.  We are not here concerned with local regulation ―establishing 
minimum terms of employment.‖  (Metropolitan Life, supra, 471 U.S. at p. 754.)  
Nor are we concerned with state regulations ―prescribing the minimum wages, 
maximum hours, and standard conditions of employment . . . .‖  (Industrial 
Welfare Com. v. Superior Court (1980) 27 Cal.3d 690, 698.)  The ordinance does 
not merely impose a term or condition of employment, in the sense of requiring 
mental health insurance coverage as in Metropolitan Life, or a severance payment 
in the event of a plant closing as in Fort Halifax, or minimum wages and 
maximum hours as in Industrial Welfare Com.—benefits that apply across the 
board to every individual employee among the employer‘s selected work force. 
We are concerned with a local regulation that creates employment by 
dictating which individuals the new grocery owner must hire, and then establishes 
minimum standards for those workers.  It is the initial requirement to hire, not the 
minimum standards applied to those hired, that causes the ordinance to be 
preempted under Machinists.  The requirement to hire, of course, is not a part of 
the collective bargaining process at all.  But it necessarily subverts that process, 
because it determines the members of the work force who will decide the matters 
of ―self-organization and collective bargaining‖ (Metropolitan Life, supra, 471 
U.S. at p. 751) that are concededly the exclusive province of the NLRA.   
 
10 
As the majority points out, the ordinance does not, on its face, regulate 
organizing or bargaining.  But the ordinance does indeed regulate the economic 
contest, in at least two basic ways.  (See Machinists, supra, 427 U.S. at p. 150 
[state regulation of economic pressure, deemed by the NLRA to be left to the free 
play of contending economic forces, is ―‗denying one party to an economic contest 
a weapon that Congress meant him to have available‘‖].) 
First, the fact that the employer‘s choice of employees who will comprise 
its work force necessarily precedes any ―‗―union organization, collective 
bargaining, and labor disputes‖‘‖ (Brown, supra, 554 U.S. at p. 65) does not 
reduce the significance of that choice to the regulatory scheme Congress fashioned 
in the NLRA, which was created to provide ―a framework for self-organization 
and collective bargaining.‖  (Metropolitan Life, supra, 471 U.S. at p. 751.)  The 
people who comprise the work force are an integral part of that framework, and 
the employer‘s right to select its employees, one by one, was left undisturbed in 
the NLRA, as Jones & Laughlin explicitly tells us.  So, I cannot accept the notion 
that states are left free to do what the NLRA does not do simply because the 
conduct in question – hiring the employees who will launch the new employer‘s 
grand opening – precedes the collective bargaining process. 
Second, while the City‘s ordinance is not expressly aimed at the collective 
bargaining process, I think it is fair to say that the ordinance itself is an economic 
weapon—not a weapon wielded by either of the parties to a labor dispute, but one 
superimposed by the City that necessarily ―‗upset[s] the balance that Congress has 
struck between labor and management in the collective-bargaining relationship.‘‖  
(Metropolitan Life, supra, 471 U.S. at p. 751.)  An ordinance that dictates whom a 
new employer must hire denies that new employer the ability to choose the 
employees it deems most suited to ensuring the success of its enterprise, and does 
so during the critical first 90 days of its operation.  This is a matter of considerable 
moment to new owners with their own management styles, the implementation of 
which depends on selecting employees one by one. 
 
11 
The trial testimony demonstrates this point, showing that the first 90 days 
of a new grocery owner‘s operation are the most important to establish the new 
owner‘s image and to ―deliver‖ to new customers.  One witness said, ―The 
supermarket business is a very competitive business, and if you don‘t deliver to 
the customers in the first 90 days, you‘ve probably lost them.‖  Another witness 
testified it was critical to his company, when acquiring a new store, to bring in 
experienced personnel from the grocer‘s other stores who understand the 
company‘s business philosophy.  The company tries to hire from the community 
(and if a predecessor‘s employee were the right fit for the company, it would hire 
him or her to work in one of its other stores), but the company had significant 
concerns about retaining a bloc of employees without the option ―to determine 
whether they would fit, have the work ethic, the work history that would fit our 
organizational style as a collective group‖; ―we would have more difficult[y] 
running that store from day one in the style and fashion that we require . . . .‖  One 
witness indicated his company‘s need to ―hire our own crew‖ because the 
company wanted bilingual employees to fully serve the shoppers to which it 
catered.  In short, new owners of previously faltering grocery stores have sound 
reasons for the ―normal exercise‖ of their right under federal law to select their 
own work forces.  (Jones & Laughlin, supra, 301 U.S. at p. 45.)  The ordinance, 
stripping away the new employer‘s choices in hiring during the critical first 90 
days, operates as an economic weapon and directly affects the economic activities 
of the employer.  To say that it is not a form of economic pressure that alters the 
collective bargaining relationship is, in my view, fundamentally erroneous. 
The economic pressure is not imposed by the employees as union members 
during collective bargaining, but it is government-imposed on their behalf during a 
time when they are free to engage in the process of self-organization governed by 
the NLRA.  The ordinance mandates which individuals are to comprise the work 
force that will decide how or whether to bargain with the employer.  To deny that 
an economic weapon is in play between contending economic forces as a result of 
 
12 
the ordinance is to ignore the fundamental relationship between labor and 
management upon which the NLRA is constructed.  The requirement to hire a 
specific bloc of employees, it seems to me, necessarily ―has altered the economic 
balance between labor and management.‖  (New York Tel. Co. v. New York Labor 
Dept. (1979) 440 U.S. 519, 532; see also Burns, supra, 406 U.S. at p. 288 [―The 
congressional policy manifest in the Act is to enable the parties to negotiate for 
any protection either deems appropriate, but to allow the balance of bargaining 
advantage to be set by economic power realities.‖].)  Work force selection is 
perforce one of the most basic ―economic power realities.‖ 
The majority‘s view is that the ordinance is of a piece with other state and 
local regulations broadly regulating hiring and firing, and that it does not regulate 
bargaining or speak directly to the process of organizing; instead the ordinance 
temporarily preserves the status quo, whatever that may be (whether the work 
force is unionized or not).  (Maj. opn. ante, at pp. 19-21.)  But the flaw in the 
City‘s ordinance lies in the mandated selection of an employer‘s work force in the 
first instance, a sui generis form of regulation.  And, in my view, the temporary 
nature of the ordinance is entirely irrelevant; either Congress intended that the 
employer‘s right to select its work force be unregulated, or it did not; I do not see 
how there can be any middle ground on congressional intent.  (See Metropolitan 
Life, supra, 471 U.S. at p. 749 [the ―second [Machinists] pre-emption doctrine 
protects against state interference with policies implicated by the structure of the 
Act itself, by pre-empting state law . . . concerning conduct that Congress intended 
to be unregulated‖; while ―[a]n appreciation of the State‘s interest in regulating a 
certain kind of conduct may still be relevant in determining whether Congress in 
fact intended the conduct to be unregulated‖ (id. at pp. 749-750, fn. 27), such 
preemption ―does not involve in the first instance a balancing of state and federal 
interests, . . . but an analysis of the structure of the federal labor law to determine 
whether certain conduct was meant to be unregulated‖ (ibid., italics added)].)   
 
13 
In the end, the majority frames the question as whether there is evidence 
that Congress affirmatively intended to leave the subject of employee ―retention‖ 
during ownership transitions unregulated by states and municipalities, and finds 
the NLRA ―resoundingly silent.‖  (Maj. opn. ante, at p. 18.)  In my view, this 
misstates the question, which is whether Congress intended to leave unregulated 
the employer‘s initial selection – not the retention – of its work force.  And the 
NLRA is indeed silent on both questions; there is nothing in the text of the NLRA 
about hiring or firing (except to prohibit doing either based on union affiliation).  
But the silence is hardly surprising; the high court has told us that congressional 
intent to shield a zone of activity from regulation in most cases is found ―only 
‗implicit[ly] in the structure of the Act‘‖ (Brown, supra, 554 U.S. at p. 68), not in 
its text.  The NLRA was founded on, and everything in it assumes, the existence of 
a freely formed employer-employee relationship.  (Jones & Laughlin, supra, 301 
U.S. at p. 45.)  It would be anomalous to conclude that, despite this foundation, 
Congress did not intend to prevent states and localities from doing the very thing 
that it declined to do:  interfere with an employer‘s selection of the people who 
will conduct its business. 
For the foregoing reasons alone, I would find the City‘s ordinance 
preempted.  But there is more, because the ordinance does have a direct impact on 
the collective bargaining process.  The ordinance‘s requirement that the new 
owner hire the predecessor‘s work force necessarily influences whether or not the 
new employer will be considered a successor to the former employer, and thus 
bound to bargain with the union selected by the predecessor‘s employees – a direct 
intrusion on the collective bargaining process. 
4. 
The successorship doctrine 
If a new employer is deemed a successor of the old employer and hires a 
majority of its employees from the predecessor‘s work force, the new employer 
has a duty to recognize and bargain with the union representing the predecessor‘s 
employees.  This ―successorship doctrine‖ developed through several high court 
 
14 
cases.  The first of these, John Wiley & Sons v. Livingston (1964) 376 U.S. 543 
(John Wiley), involved the disappearance by merger of a corporate employer and 
the wholesale transfer of its employees to the company into which the corporate 
employer merged.  The union representing the predecessor‘s employees asserted 
that the new employer (Wiley) was obligated to recognize certain rights of the 
employees under its collective bargaining agreement with Wiley‘s predecessor; 
Wiley asserted the merger terminated the collective bargaining agreement for all 
purposes; and the union sought to compel arbitration.  (Id. at pp. 545-546.) 
The high court first observed that ―[f]ederal law, fashioned ‗from the policy 
of our national labor laws,‘ controls.‖  (John Wiley, supra, 376 U.S. at p. 548.)  It 
then held that the disappearance by merger of a corporate employer that had 
entered into a collective bargaining agreement did not automatically terminate all 
rights of the employees covered by the agreement, and that, ―in appropriate 
circumstances, present here, the successor employer may be required to arbitrate 
with the union under the agreement.‖  (Ibid.)  The court elaborated:  ―The 
objectives of national labor policy, reflected in established principles of federal 
law, require that the rightful prerogative of owners independently to rearrange 
their businesses and even eliminate themselves as employers be balanced by some 
protection to the employees from a sudden change in the employment relationship. 
The transition from one corporate organization to another will in most cases be 
eased and industrial strife avoided if employees‘ claims continue to be resolved by 
arbitration rather than by ‗the relative strength . . . of the contending forces,‘ 
[citation].‖  (Id. at p. 549.) 
The court found Wiley‘s obligation to arbitrate the dispute ―in the 
[predecessor‘s] contract construed in the context of a national labor policy.‖  (John 
Wiley, supra, 376 U.S. at pp. 550-551; see id. at p. 550 [―the impressive policy 
considerations favoring arbitration are not wholly overborne by the fact that Wiley 
did not sign the contract being construed‖].)  But the court cautioned:  ―We do not 
hold that in every case in which the ownership or corporate structure of an 
 
15 
enterprise is changed the duty to arbitrate survives. . . . .  [T]here may be cases in 
which the lack of any substantial continuity of identity in the business enterprise 
before and after a change would make a duty to arbitrate something imposed from 
without, not reasonably to be found in the particular bargaining agreement and the 
acts of the parties involved.‖  (Id. at p. 551.)  In John Wiley, the required 
―similarity and continuity of operation across the change in ownership [was] 
adequately evidenced by the wholesale transfer of [the predecessor‘s] employees 
to the Wiley plant . . . .  (Ibid.) 
Next, the high court decided Burns, supra, 406 U.S. 272, holding that an 
employer that hired a majority of its predecessor‘s employees had an obligation to 
bargain with the union that represented those employees, but could not be required 
to observe the terms of the union‘s collective bargaining agreement with the 
predecessor.  (Id. at pp. 278, 286-287.)  In Burns there was no relationship 
between the new employer and its predecessor.  The new employer replaced the 
predecessor when it bid for and obtained a service contract to provide plant 
protection services.  (Id. at pp. 274-275.)  The new employer‘s obligation to 
bargain with the union ―stemmed from its hiring of [the former employer‘s] 
employees and from the recent election and Board certification.‖  (Id. at pp. 278-
279.)  ―[I]t would be different if Burns had not hired employees already 
represented by a union certified as a bargaining agent . . . .‖  (Id. at p. 280.) 
The Burns court noted that the NLRB ―has never held that the National 
Labor Relations Act itself requires that an employer who submits the winning bid 
for a service contract or who purchases the assets of a business be obligated to hire 
all of the employees of the predecessor though it is possible that such an obligation 
might be assumed by the employer.‖  (Burns, supra, 406 U.S. at p. 280, fn. 5.)  
But while the new employer had a duty to bargain, it could not be required to 
honor the terms of the previous employer‘s collective bargaining agreement.  ―The 
source of its duty to bargain with the union is not the collective-bargaining 
contract but the fact that it voluntarily took over a bargaining unit that was largely 
 
16 
intact and that had been certified within the past year.  Nothing in its actions, 
however, indicated that Burns was assuming the obligations of the contract, and 
‗allowing the Board to compel agreement when the parties themselves are unable 
to agree would violate the fundamental premise on which the Act is based – 
private bargaining under governmental supervision of the procedure alone, without 
any official compulsion over the actual terms of the contract.‘‖  (Id. at p. 287.)  
And, Burns said, a successor employer ―is ordinarily free to set initial terms on 
which it will hire the employees of a predecessor . . . .‖  (Id. at p. 294.) 
Then came Howard Johnson, supra, 417 U.S. 249, where the court held 
that the new employer, who hired only a small fraction of the predecessors‘ 
employees, could not be compelled to arbitrate, under its predecessors‘ collective 
bargaining agreements, the extent of its obligations under those agreements to the 
predecessors‘ employees.  (Id. at pp. 250, 264.)  In Howard Johnson, the new 
employer leased restaurant and motor lodge premises from the old employer, and 
purchased all the personal property used in their operations.  (Id. at p. 251.)  The 
seller notified its employees their employment would terminate when operations 
were transferred.  Upon the sale, the new employer began operations with 45 
employees, only nine of whom had been employed by the seller, and the union 
sued, seeking arbitration, which the trial court granted under John Wiley.  
(Howard Johnson, at pp. 252-253.) 
The high court held that Burns principles applied.  The court acknowledged 
some inconsistencies in reasoning between John Wiley and Burns, but found it 
unnecessary to decide whether an irreconcilable conflict existed, because the facts 
in John Wiley were entirely different from those before the court in Howard 
Johnson.  (Howard Johnson, supra, 417 U.S. at pp. 255-256.)  In addition to the 
fact (among others) that the seller remained a viable entity after the asset sale, 
―[e]ven more important, in Wiley the surviving corporation hired all of the 
employees of the disappearing corporation,‖ making no substantial changes in the 
operation of the business.  (Howard Johnson, at p. 258.)  ―It was on this basis that 
 
17 
the Court in Wiley found that there was the ‗substantial continuity of identity in the 
business enterprise,‘ [citation], which it held necessary before the successor 
employer could be compelled to arbitrate.‖  (Howard Johnson, at p. 259.)   
By contrast, the new employer in Howard Johnson ―decided to select and 
hire its own independent work force . . . .‖  (Howard Johnson, supra, 417 U.S. at 
p. 259.)  The union‘s position was that the new employer was bound by the 
seller‘s collective bargaining agreement to hire all of the seller‘s former 
employees.  (Id. at p. 260.)  This position, the high court said, was ―completely at 
odds with the basic principles this Court elaborated in Burns.‖  (Id. at p. 261.)  The 
court said:  ―Clearly, Burns establishes that Howard Johnson had the right not to 
hire any of the former [employer‘s] employees, if it so desired.‖  (Id. at p. 262.)  
The continuity of identity in the business enterprise that John Wiley required 
―necessarily includes, we think, a substantial continuity in the identity of the work 
force across the change in ownership.‖  (Howard Johnson, at p. 263.) 
Moreover:  ―This interpretation of Wiley is consistent also with the Court‘s 
concern with affording protection to those employees who are in fact retained in 
‗[t]he transition from one corporate organization to another‘ from sudden changes 
in the terms and conditions of their employment . . . .  At the same time, it 
recognizes that the employees of the terminating employer have no legal right to 
continued employment with the new employer . . . .  This holding is compelled, in 
our view, if the protection afforded employee interests in a change of ownership 
by Wiley is to be reconciled with the new employer‘s right to operate the 
enterprise with his own independent labor force.‖  (Howard Johnson, supra, 417 
U.S. at p. 264, italics added.)  
Finally, there was Fall River Dyeing, where the court held that a 
successor‘s obligation to bargain was not limited to a situation where (as in Burns) 
the union had recently been certified; instead, where a union has a rebuttable 
presumption of majority status, that status continues through a change in 
employers if ―the new employer is in fact a successor of the old employer and the 
 
18 
majority of its employees were employed by its predecessor.‖  (Fall River Dyeing, 
supra, 482 U.S. at p. 41, italics added.)  Fall River Dyeing repeated the principles 
established in Burns:  ―We further explained that the successor is under no 
obligation to hire the employees of its predecessor . . . .  If the new employer 
makes a conscious decision to maintain generally the same business and to hire a 
majority of its employees from the predecessor, then the bargaining obligation of § 
8(a)(5) is activated.  This makes sense when one considers that the employer 
intends to take advantage of the trained work force of its predecessor.‖  (Fall River 
Dyeing, at pp. 40-41, citations omitted.)  Thus ―[t]he ‗triggering‘ fact for the 
bargaining obligation was this composition of the successor‘s work force.‖  (Id. at 
p. 46; see id. at p. 47 [adopting NLRB rule that the determination of the 
composition of the successor‘s work force is to be made when a transitioning 
successor has employed a ―‗substantial and representative complement‘‖ of its 
work force; ―[i]f, at this particular moment, a majority of the successor‘s 
employees had been employed by its predecessor, then the successor has an 
obligation to bargain with the union that represented these employees‖].) 
 
The majority sees nothing in these successorship cases (which presented no 
preemption issue) to suggest that Congress intended in the NLRA to prevent states 
and localities from interfering with the employer‘s right to choose its employees.  I 
cannot agree.  From John Wiley to Fall River Dyeing, these cases show that the 
employer‘s free selection of employees has always been a fundamental part of 
national labor policy.  John Wiley and Howard Johnson could hardly have been 
more clear:  John Wiley tells us that the ―objectives of national labor policy, 
reflected in established principles of federal law, require that the rightful 
prerogative of owners independently to rearrange their businesses‖ be balanced 
―by some protection to the employees from a sudden change in the employment 
relationship‖ (John Wiley, supra, 376 U.S. at p. 549, italics added), and Howard 
Johnson tells us that the high court in John Wiley was ―concern[ed] with affording 
protection to those employees who are in fact retained in ‗[t]he transition from one 
 
19 
corporate organization to another‘ from sudden changes in the terms and 
conditions of their employment . . . .‖  (Howard Johnson, supra, 417 U.S. at p. 
264, italics added.) 
In short, it seems to me incontrovertible that the ―objectives of national 
labor policy,‖ as stated by the high court, have always included the employer‘s 
prerogative to select its work force (subject to the prohibition on discrimination on 
the basis of union membership).  As Howard Johnson put it, ―the employees of the 
terminating employer have no legal right to continued employment with the new 
employer . . . .‖  (Howard Johnson, supra, 417 U.S. at p. 264.)  Consequently, 
states or cities are not free to regulate to the contrary.  (See John Wiley, supra, 376 
U.S. at p. 548 [―Federal law, fashioned ‗from the policy of our national labor 
laws,‘ controls.‖]; cf. Howard Johnson, supra, 417 U.S. at p. 255 [observing that 
federal common law regarding enforcement of collective-bargaining agreements 
―must be ‗fashion[ed] from the policy of our national labor laws‘‖].) 
 
The City conceded in oral argument that the ordinance would be preempted 
by the NLRA if it expressly declared the new owner to be a successor within the 
meaning of the successorship doctrine, but the City asserted the express 90-day 
limitation avoids preemption.  If the ordinance were unlimited in duration, I think 
there would be little doubt, under the terms of the ordinance itself, that it would 
dictate the successorship outcome.  The new employer – defined in the ordinance 
as the person ―that owns, controls, and/or operates the Grocery Establishment‖ 
(L.A. Mun. Code, § 181.01, subd. I) after the transfer of ―all or substantially all of 
the assets or a controlling interest‖ (id., § 181.01, subd. B) of the old employer – 
would necessarily be a successor, and would necessarily be bound to bargain with 
the union representing the workers that the new employer has been required 
(indefinitely under this scenario) to retain.  This scenario would present an 
 
20 
obvious intrusion into the collective bargaining process, requiring the employer to 
bargain with a work force it did not choose.1   
In my view, the ordinance seeks to do indirectly that which the City 
acknowledges it cannot do directly, because the practical effect of the ordinance is 
to visit upon the new owner all the obligations of a successor under the 
successorship doctrine.  The majority, however, concludes, based on existing 
NLRB decisions by the agency‘s administrative law judges (ALJ‘s) and a federal 
district court decision, that the new employer will be obligated to bargain ―only if 
the successor employer retains its predecessor‘s employees beyond the mandatory 
employment period . . . .‖  (Rhode Island Hospitality Assn. v. City of Providence 
(D.R.I. Mar. 31, 2011, No. 09-527-ML) 2011 U.S. Dist. Lexis 34821, *39-*40 
(Rhode Island Hospitality).)2  (Maj. opn. ante, at pp. 26-28)  In other words, 
                                              
1  
In Wash. Serv. Contractors v. Dist. of Columbia (D.C. Cir. 1995) 54 F.3d 
811, 816, the court, upholding a retention ordinance of unlimited duration against 
a preemption claim, stated that this argument contains a ―logical flaw,‖ because 
the NLRB may decide not to require the new employer to bargain with the union 
in circumstances where a statute or ordinance requires the employer to retain its 
predecessor‘s employees.  According to the court, if the NLRB decides not to 
require bargaining, then the problem disappears and there is no intrusion in the 
bargaining process.  And if the NLRB does require bargaining, that would mean 
that in the NLRB‘s judgment, the ordinance is congruent with the aims of the 
NLRA.  (Wash. Serv. Contractors, at pp. 816-817.)  In my view, both scenarios 
miss the mark.  The first (not requiring bargaining) would intrude on the 
employees‘ rights to representatives of their own choosing, and the second 
presumes that the NLRB‘s judgment would presage that of the high court, a 
conclusion I find to be unwarranted.  In either case, the ordinance has an impact 
on, and ―‗upset[s] the balance that Congress has struck between labor and 
management in the collective-bargaining relationship.‘‖  (Metropolitan Life, 
supra, 471 U.S. at p. 751.) 
 
2  
In Rhode Island Hospitality, the federal district court upheld the 
enforcement of a municipal ordinance similar to the one challenged here.  The 
ordinance required a new employer in the hospitality business to retain the 
previous employer‘s workers for three months, subject to a ―good cause‖ right to 
 
(footnote continued on next page) 
 
21 
because the ordinance does not in so many words require the employer to maintain 
the predecessor‘s work force after 90 days, the ordinance does not dictate the 
outcome of the successorship inquiry (maj. opn. ante, at p. 28) (and therefore does 
not intrude on the processes of organization, collective bargaining, or labor 
disputes). 
I cannot agree with this analysis.   
First, it is entirely uncertain that the obligation to bargain will not arise 
unless the new employer voluntarily retains the work force after the 90 days.  As 
the Rhode Island Hospitality court acknowledged, the two NLRB decisions on the 
issue are not of a single mind (though both concluded the new employer under a 
mandatory retention ordinance was a successor with an obligation to bargain).  
One of them rejected the new employer‘s contention that it was forced to hire its 
predecessor‘s employees (and therefore did not ―consciously decide[] to take 
advantage of its predecessor‘s trained workforce‖); the ALJ observed that the 
NLRB had ―never formally adopted a requirement that a successor employer must 
consciously decide to avail itself of its predecessor‘s trained workforce in order to 
                                                                                                                                                              
(footnote continued from previous page) 
discharge.  (Rhode Island Hospitality, supra, 2011 U.S. Dist. Lexis 34821, at pp. 
*11-*12.)  The court acknowledged that the NLRB had ―not yet developed a 
consistent position‖ on when the duty to bargain would accrue when there is a 
mandatory retention ordinance (id. at pp. *39-*40), that ―[t]his is a close case‖ (id. 
at p. *40), and that the ordinance could not be ―simply characterized as a 
‗minimum labor standard.‘‖  (Id. at p. *41.)  But, because the ordinance did not 
preclude an employer from making its own hiring decisions after 90 days, did not 
compel a successor employer to honor the terms of a collective bargaining 
agreement negotiated by its predecessor, and allowed the new employer to set 
employment terms (id. at pp. *41-*42), the district court concluded that the 
ordinance was ―primarily designed to provide temporary job protection to both 
unionized and nonunionized employees which does not constitute a significant 
intrusion into the equitable collective bargaining process established by the 
NLRA.‖  (Id. at p. *42.) 
 
 
22 
be considered a Burns‘ successor employer . . . .‖  (United States Service 
Industries, Inc. (NLRB Dec. 13, 1995, No. 5-CA-24575 (1995 NLRB Lexis 1151, 
*11-*12)) (Service Industries).)3  In the other case, the ALJ found that 
successorship obligations attach on the date the new employer makes offers of 
permanent employment to the workers (or, if no offers are made, at a reasonable 
time after the expiration of the 90-day period).  (M&M Parkside Towers LLC 
(NLRB Jan. 30, 2007, No. 29-CA-27720 (2007 NLRB Lexis 27, *15-*17)) (M&M 
Parkside).) 4 
                                              
3  
In Service Industries, a union filed a charge with the NLRB and a 
complaint was issued alleging the employer refused to recognize and bargain with 
the union.  The employer‘s predecessor provided janitorial services to buildings in 
the District of Columbia and had recognized the union as the exclusive bargaining 
representative of its janitorial employees.  The predecessor lost its contract to 
clean a particular building.  The new employer contracted with the building‘s 
management, and hired 24 janitorial employees, 15 of whom had been employed 
by the predecessor.  (Service Industries, supra, 1995 NLRB Lexis 1151, at pp. *8-
*9.)  The union requested bargaining on the terms and conditions of employment, 
but the new employer refused.  (Id. at p. *10.)  The ALJ found substantial 
continuity in the employing enterprises, but the new employer contended that it 
was forced to hire its predecessor‘s employees by the district‘s Displaced Workers 
Protection Act.  (Id. at p. *11.)  The ALJ rejected the argument, and found the new 
employer‘s refusal to recognize and bargain with the union was an unfair labor 
practice.  (Id. at p. *14.) 
 
4  
M&M Parkside, decided 11 years after Service Industries, involved a New 
York City ordinance requiring a purchaser of apartment buildings and commercial 
property to retain all employees for 90 days (and to offer permanent employment 
to employees who received a satisfactory written evaluation after 90 days).  
(M&M Parkside, supra, 2007 NLRB Lexis 27, at pp. *3-*4.)  After the 90-day 
period ended, the purchaser in M&M Parkside, while claiming not to be a 
successor, retained all the seller‘s employees, established new terms and 
conditions of employment, and declined the union‘s request to negotiate and 
execute a collective bargaining agreement.  (Id. at pp. *8-*9.)  In the ensuing 
proceeding alleging unfair labor practices, the ALJ found the new employer‘s 
business was unchanged and the predecessor‘s employees were the entirety of the 
work force, so the new employer had a legal obligation to recognize and bargain 
 
(footnote continued on next page) 
 
23 
This uncertainty as to when the obligation to bargain attaches, it seems to 
me, itself demonstrates that the ordinance impermissibly intrudes on the processes 
of self-organization and collective bargaining that are the exclusive province of 
the NLRA.  The fact is that under the current state of the law, a ―[s]uccessor 
[g]rocery [e]mployer‖ (defined in the ordinance) (L.A. Mun. Code, § 181.01, 
subd. I) in a unionized workplace would not know whether it is obliged to bargain, 
at the request of the union representing the employees it was forced to hire, during 
that 90-day retention period.  The new employer is, at a minimum, exposed to 
charges of an unfair labor practice if it refuses to bargain. 
An obvious illustration of this point would be the case of an employee who 
files a grievance with the union because he was fired within the first 90 days.  The 
right to continue employment unless there is good cause for termination is a 
significant benefit ordinarily conferred, if at all, only after the employer and union 
have negotiated all other terms of employment, and the union has made 
concessions to offset the employer‘s ―termination for cause only‖ agreement.  The 
ordinance bestows this benefit upon a unit of employees whom the successor has 
not chosen to hire.  The successor did not obtain concessions from the predecessor 
in exchange for the promise to hire the predecessor‘s employees, nor did the 
successor exercise its right to choose which employees to hire from among the 
predecessor‘s work force.  Yet if the successor were to fire any employee in the 
first 90 days (or any time thereafter), it is likely the employee will file a grievance, 
and if the successor refuses to go through grievance procedures under the 
                                                                                                                                                              
(footnote continued from previous page) 
with the union.  (Id. at pp. *10-*11.)  The ALJ rejected the notion that the local 
ordinance compelling the employer to retain the employees for 90 days should 
mitigate against a successorship finding, viewing the argument as a nonsequitur, 
since the issue was whether the employer had an obligation to bargain after it 
chose, for whatever reason, to hire the predecessor‘s employees.  (Id. at pp. *12-
*14.) 
 
 
24 
predecessor‘s collective bargaining agreement, the successor risks being found 
guilty of an unfair labor practice.  If the successor were to implement new wages, 
hours, and benefits without bargaining with the union, the employees might file 
grievances, demand union negotiation and arbitration, and even walk out or call a 
strike. 
Of course no one can foresee what will occur in any particular case.  But 
the exposure to unfair labor practice charges caused by the ordinance illustrates its 
intrusion into an area reserved for market freedom.  Machinists tells us that, just as 
the state may not prohibit the use of economic weapons such as strikes, lockouts 
and other ―self-help economic activities,‖ the state ―may not . . . ‗add to an 
employer‘s federal legal obligations in collective bargaining . . . .‘‖  (Machinists, 
supra, 427 U.S. at p. 147.)  It seems to me that the City‘s ordinance does just that, 
effectively ―‗upset[ting] the balance that Congress has struck between labor and 
management in the collective-bargaining relationship.‘‖  (Metropolitan Life, 
supra, 471 U.S. at p. 751.) 
The ordinance does not on its face prevent the new employer, after 90 days, 
from terminating the workers it was forced to employ and hiring its own 
independent work force.  But, once an employment relationship is established, it is 
not easy to terminate, certainly not without substantial risk.  For one thing, it is 
highly impractical to terminate an entire work force at once, and virtually 
impossible to do so without business disruption and damage to the new employer‘s 
reputation in the community.  For another, it is easy to imagine the litigation 
consequences that would ensue if the employees in a previously unionized 
workplace are terminated en masse after working for the new employer for 90 
days.  The likelihood of unfair labor practice charges alleging union animus would 
be high, as would the likelihood of wrongful termination claims.  The majority 
finds that similar consequences, at least in terms of unfair labor practice charges, 
would ensue if there were no ordinance and the new employer were free to hire an 
 
25 
entirely new work force at the time of acquisition.  I disagree.  We need not blind 
ourselves to probable consequences that ordinary experience suggests will occur. 
Moreover, it seems obvious that a new employer free to hire as it chooses 
before going into business does not have to discharge anyone, much less terminate 
en masse, in order to employ the people it wants to conduct its business, so its 
exposure to claims necessarily will be significantly different.  In effect, the City‘s 
ordinance requires a new grocery employer to step into a morass of litigation – and 
to function during the important initial period of its operations with a work force it 
deems, for entirely legitimate reasons, unsuitable for its planned operations – if it 
wishes to exercise its right, recognized under federal labor policy, to hire its own 
independent work force.  (Indeed, this impact was demonstrated at trial, at least in 
part, by the evidence that, since the City‘s ordinance was enacted, three different 
grocers have declined to buy stores in Los Angeles because of the importance to 
them of choosing their work force.)  This is not a result within the contemplation 
of the NLRA.   
In short, the facially temporary nature of the ordinance‘s interference with 
an employer‘s right to select its work force does nothing, in my view, to change 
the core facts.  It is simply unrealistic to believe the temporary nature of the 
ordinance will not materially affect the successorship inquiry.  In reality, whether 
the obligation to recognize the union ripens on day one, or on day 91, or on some 
later date, may depend on the various circumstances of each successor grocer‘s 
workplace.  But there is little room for doubt that, under the law as applied by the 
NLRB in the decades since John Wiley and Burns, many successor grocers will be 
deemed obligated to recognize and bargain with the union at some point, as a 
direct consequence of complying with the ordinance. 
Thus, under any of the scenarios that may occur under the ordinance, there 
is an impact, to a greater or lesser degree, on collective bargaining:  either the new 
employer is a successor who must bargain with the union during the 90-day period 
and/or shortly thereafter, or the employer must terminate employees en masse after 
 
26 
the 90-day period, exposing it to business consequences and legal claims that 
would otherwise not exist, if it wishes to choose its own work force.  The 
ordinance legislates in an area that federal labor law, clearly articulated by the 
high court, left unregulated:  ―the normal exercise of the right of the employer to 
select its employees‖ (Jones & Laughlin, supra, 301 U.S. at p. 45), ―‗the rightful 
prerogative of owners independently to rearrange their businesses‘‖ (Burns, supra, 
406 U.S. at p. 301, quoting John Wiley, supra, 376 U.S. at p. 549), and a new 
employer‘s ―right not to hire any of the former [employer‘s] employees, if it so 
desire[s]‖ (Howard Johnson, supra, 417 U.S. at p. 262).  To me, the ineluctable 
conclusion is that the ordinance is preempted under Machinists because it 
regulates ―within ‗a zone protected and reserved for market freedom.‘‖  (Brown, 
supra, 554 U.S. at p. 66.) 
5. 
Summary and conclusion 
The high court in Burns identified the freedom of contract as a fundamental 
premise on which the NLRA is based—―‗private bargaining under governmental 
supervision of the procedure alone, without any official compulsion over the 
actual terms of the contract.‘‖  (Burns, supra, 406 U.S. at p. 287, quoting H.K. 
Porter Co. v. NLRB (1970) 397 U.S. 99, 108.)  In the nearly 40 years since Burns 
was decided, the high court has continued to recognize the freedom of every 
employer and union to reach agreement, or not, in their negotiation of the terms 
and conditions of employment.  This case presents a very different, far more 
fundamental issue than the freedom of parties who choose to work together to 
agree on the terms of employment.   
The very different question presented here is whether the NLRA evinces an 
intent to prohibit regulations that interfere with an employer‘s freedom to choose 
whether to enter into any employment relationship at all with a particular 
employee or bloc of employees.  In my view, the absence of high court precedent 
saying in so many words that the intent of the NLRA is to preserve the freedom of 
choice for employees and employers alike to decide whether to form an 
 
27 
employment relationship does not mean states and municipalities are free to enact 
so-called worker ―retention‖ ordinances.  Rather, the high court has not yet had 
occasion to address this truly extraordinary intrusion upon the freedom of contract, 
one that threatens to upend the very foundation of our national labor laws and 
policies.  Perhaps this case will offer the high court the occasion to address the 
question now. 
 
 
 
 
 
 
 
 
 
 
 
GRIMES, J.
                                              
  
Associate Justice of the Court of Appeal, Second Appellate District, 
Division Eight, assigned by the Chief Justice pursuant to article VI, section 6 of 
the California Constitution. 
 
 
 
 
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. 
 
Name of Opinion California Grocers Association v. City of Los Angeles 
__________________________________________________________________________________ 
 
Unpublished Opinion 
Original Appeal 
Original Proceeding 
Review Granted XXX 176 Cal.App.4th 51 
Rehearing Granted 
 
__________________________________________________________________________________ 
 
Opinion No. S176099 
Date Filed: July 18, 2011 
__________________________________________________________________________________ 
 
Court: Superior 
County: Los Angeles 
Judge: Ralph W. Dau 
 
__________________________________________________________________________________ 
 
Counsel: 
 
Rockard J. Delgadillo and Carmen A. Trutanich, City Attorneys, Laurie Rittenberg, Assistant City 
Attorney, John A. Carvalho and Gerald Masahiro Sato, Deputy City Attorneys, for Defendant and 
Appellant. 
 
Schwartz, Steinsapir, Dohrmann & Sommers, Margo A. Feinberg and Henry M. Willis for Intervener and 
Appellant. 
 
Altshuler Berzon, Michael Rubin, Scott Kronland and Jennifer Sung for American Federation of Labor and 
Congress of Industrial Organizations and Service Employees International Union as Amici Curiae on 
behalf of Defendant and Appellant and Intervener and Appellant. 
 
Jones Day, Richard S. Ruben, Craig E. Stewart and Nathaniel P. Garrett for Plaintiff and Respondent. 
 
Deborah J. La Fetra and Timothy Sandefur for Pacific Legal Foundation as Amicus Curiae on behalf of 
Plaintiff and Respondent. 
 
Mitchell Silberberg & Knupp, Adam Levin, Tracy L. Cahill, Taylor S. Ball; National Chamber Litigation 
Center, Inc., Robin S. Conrad and Shane B. Kawka for Employers Group and Chamber of Commerce of 
the United States of America as Amici Curiae on behalf of Plaintiff and Respondent. 
 
Davis, Cowell & Bowe, Richard G. McCracken and Andrew J. Kahn for East Bay Alliance for a 
Sustainable Economy and Unite Here as Amici Curiae. 
 
 
 
 
 
 
 
Counsel who argued in Supreme Court (not intended for publication with opinion): 
 
Gerald Masahiro Sato 
Deputy City Attorney 
916 City Hall East 
200 North Main Street 
Los Angeles, CA  90012-4129 
(213) 473-6875 
 
Henry M. Willis 
Schwartz, Steinsapir, Dohrmann & Sommers 
6300 Wilshire Boulevard, Suite 2000 
Los Angeles, CA  90048-5202 
(323) 655-4700 
 
Craig E. Stewart 
Jones Day 
555 California Street, 26th Floor 
San Francisco, CA  94104 
(415) 626-3939