On Wednesday, April 29, 2020, the Los Angeles City Council passed a COVID-19 Right of Recall Ordinance requiring certain hospitality, janitorial, property management and tourism employers, when rehiring, to offer jobs based on seniority to certain workers laid off during the COVID-19 pandemic.  At the same time, the council also passed a COVID-19 Worker Retention Ordinance. Both ordinances are intended to assist workers in sectors which have been especially hard hit by the coronavirus crisis and both ordinances had been approved in concept in the prior week subject only to drafting the final language. 

On the same day, Mayor Garcetti announced that he signed both the right of recall and worker retention ordinances into law. 

The right of recall ordinance covers hotels and residential buildings designated for public lodging with at least 50 guest rooms or gross receipts exceeding $5 million in the past year. Restaurants situated on hotel properties are included. The ordinance also covers employers at Los Angeles airports, and those providing services to Los Angeles airport employers, but excludes airlines. 

Commercial property employers such as offices, shopping centers or factories with at least 25 janitorial, maintenance and/or security workers are covered by the ordinance, but only with respect to the janitorial, maintenance and security workers. Convention and event venues, including all concert halls and sports arenas with more than 50,000 square feet or at least 1,000 seats, are also covered by the ordinance.

The ordinance targets all persons who were laid off after March 4, 2020 as a result of a lack of business, reduction in workforce or other economic, non-disciplinary reason, who worked within the City of Los Angeles for at least two hours in a particular week and who had at least six months’ of prior service. The ordinance imposes a rebuttable presumption that all terminations occurring on or after March 4, 2020, are due to non-disciplinary reasons. Managers, supervisors and “confidential employees” are not subject to the recall requirements. A “confidential employee” is defined by Government Code section 3513 as any employee who is required to develop or present management positions with respect to employer-employee relations or whose duties normally require access to confidential information contributing significantly to the development of management positions.

Covered workers are to be rehired in the following order: (i) workers who held the same or similar position with the employer at that site at the time of the worker’s most recent separation from active employment with the employer, and (ii) workers that are or who can be qualified with the same training given to a new worker hired for that position. If more than one worker is entitled to preference, seniority would be used to establish priority. The rehire offer must be in writing and workers must be given at least five business days in which to accept or decline the offer. A written offer must be sent to the last known address, email address and text message number.

Any collective bargaining agreement in place with clear and unambiguous recall language supersedes the provisions of the ordinance.  However, any subsequently negotiated collective bargaining agreement must explicitly waive the ordinance to avoid the application of its recall provisions.

A covered employer’s failure to follow the provisions of the ordinance will expose the employer to damages or the sum of $1,000, whichever is greater, punitive damages and reasonable attorneys’ fees and costs. However, a laid off worker seeking to bring such a claim must first provide written notice to the employer along with a 15-day opportunity to cure the alleged failure. An employer who prevails in such an action can only recover reasonable attorneys’ fees and costs if a court determines that the action was frivolous. 

The worker retention ordinance covers the same businesses that are the subject of the recall ordinance, and the same collective bargaining agreement exceptions apply. The ordinance covers workers that were employed by these businesses as of March 4, 2020 with at least six months of prior service.

In substance, the worker retention ordinance requires that covered employees be hired by any successor business owner or operator following a change in control of the business. The employees to be hired must be given written offers of employment which are to be held open for a minimum of ten days. 

Once the worker is hired by the successor employer or operator, the worker must be retained for a period of 90 days following the start of employment. At the end of the 90-day period, the employer must perform a written performance evaluation of each worker and must consider providing offers of continued employment to those who receive satisfactory evaluations. These records must be maintained for a minimum of three years.

If the successor employer determines that fewer employees are needed than were employed by the prior owner following a change in control, it must provide offers to covered employees based on seniority.

Written notice of the change in control must be posted in a conspicuous place within five days of the transfer and must remain posted for six months after the business opens to the public.  The notice must include contact information for both the successor and predecessor business employers.

Failure to comply with the ordinance exposes the employer to damages including front and back pay, the value of lost benefits and reasonable attorneys’ fees and costs; employers can only recover reasonable attorneys’ fees and costs if it is proven that the action was frivolous. As with the recall ordinance, a worker seeking to bring such a claim must first provide written notice to the employer, and the employer will have a 15-day opportunity to cure the alleged failure.

The author would like to gratefully acknowledge the assistance of Joanne Warriner.

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