How is this legal? Long Beach city council goes after the grocery stores. How do you put people out of work? You pass a law that forces companies to pay an additional $4.00 an hour. But only companies that have 300 or more employees nationwide.
Ralphs and Food 4 Less, both owned by the parent company Kroger, announced Monday that they will be closing 25% of their stores in Long Beach after the city council passed an ordinance requiring companies with over 300 employees nationwide to pay employees an extra $4 per hour.
The California Grocers Association also has filed a lawsuit against the city, claiming the ordinance is unconstitutional because it skirts a collective bargaining agreement between supermarket companies and unionized workers. A hearing is scheduled for February 19.
“Extra pay mandates will have severe unintended consequences on not only grocers, but on their workers and their customers,” said Ron Fong, the trade group’s president and CEO, said in a statement to CBS MoneyWatch.