On April 22, 2020, the Los Angeles City Council amended and moved forward with two controversial draft ordinances aimed at regulating the order of rehiring laid-off employees and requiring retention of existing workers in the event of ownership transfers in the City of Los Angeles. The City Council had previously considered the Right of Recall and Worker Retention ordinances in late March 2020.

During his press conference on April 21, 2020, Mayor Eric Garcetti voiced support for the draft ordinances, but neither has been finalized or signed into law. At its April 22, 2020, meeting, the City Council passed a motion with several amendments to the ordinances. This motion asks the City Attorney's Office to draft amended ordinances that would narrow their scope in several ways, as described in more detail below.

Right of Recall

The March 26, 2020, draft of the Right of Recall ordinance would require Los Angeles businesses that earned gross receipts in excess of $5,000,000 in 2019 and that, on or after March 4, 2020, lay off non-supervisory employees with six months or more of service for non-disciplinary reasons to notify the employees of any job openings for which they are qualified (in writing at their last known addresses) and to offer open positions in order of seniority. There would be a rebuttable presumption that all layoffs are for non-disciplinary reasons.

The ordinance would also create a private right of action for employees, with remedies including reinstatement, all actual damages suffered by the laid-off worker and for statutory damages in the sum of $1,000 (whichever is greater), punitive damages, and attorneys' fees and costs. There is currently no expiration date for this ordinance.

Worker Retention

The March 26, 2020, draft of the Worker Retention ordinance would require Los Angeles businesses that change ownership from March 1, 2020, to March 4, 2022, for the first six months after transfer or reopening to the public, to make a written offer to hire or rehire to non-supervisory employees with six months or more of service, and to hire and retain such employees for at least 90 days. If fewer employees are needed, employees must be laid off in order of seniority.

The ordinance establishes a just-cause standard for termination for a period of 90 days after hiring or rehiring by the successor business owner. The ordinance also creates a private right of action with employee rights similar to those under the Right of Recall ordinance.

Amendments to the Draft Ordinances

At its April 22, 2020, meeting, the City Council:

  • Amended both ordinances to apply only to:
    • Hospitality workers (at hotels; hotel restaurants; large event centers used for public performances, sporting events, business meetings, and similar events; and large venues including concert halls, stadiums, sports arenas, racetracks, coliseums, and convention centers);
    • Property management service workers (at commercial properties such as offices, retail spaces, shopping centers, and industrial buildings, and including janitorial, maintenance, and security services workers); and
    • Airport workers (excluding airlines and rental car companies).
  • Removed the Urgency Clause from both ordinances (which had required both ordinances to go into effect as soon as possible).
  • Amended the Collective Bargaining Agreement language in both ordinances to read as follows:
    • A collective bargaining agreement in place on the effective date of this article that contains a Right of Recall/Retention provision shall supersede the provisions of this article. When the collective bargaining agreement expires or is otherwise open for renegotiation, the provisions of this article may only be expressly waived if the waiver is explicitly set forth in the agreement in clear and unambiguous terms. If a collective bargaining agreement is in place on the effective date of this article but the agreement does not include a Right of Recall/Retention provision, this article applies. A collective bargaining agreement may be amended at any time to explicitly waive with clear and unambiguous terms the provisions of this article.
  • Amended the Right of Recall ordinance to change the time limit in which a laid-off worker must respond to a notice-of-recall opportunity from 10 days to five business days.
  • Amended the Right of Recall ordinance to add sales to the list of workers excluded from the ordinance. This would mean that workers who "act as…manager[s], supervisor[s] or confidential employee[s], [are] not required to possess an occupational license," and are not in sales, are covered by the ordinance.

We will update this blog post as new information becomes available.

The facts, laws, and regulations regarding COVID-19 are developing rapidly. Since the date of publication, there may be new or additional information not referenced in this advisory. Please consult with your legal counsel for guidance.

DWT will continue to provide up-to-date insights and virtual events regarding COVID-19 concerns. Our most recent insights, as well as information about recorded and upcoming virtual events, are available at www.dwt.com/COVID-19.