Mayor Signs City of Los Angeles Right of Recall and Worker Retention Ordinances Into Law

On May 3, 2020, Los Angeles Mayor Eric Garcetti signed the Right of Recall and Worker Retention ordinances passed by the Los Angeles City Council on April 27, 2020. (See our last blog post on these ordinances here.) Both ordinances go into effect on June 14, 2020, and will likely have substantial impacts on employers in the City as businesses begin to rehire workers or initiate changes in ownership.

Right of Recall Ordinance

What Is the Effect of the Ordinance?

When covered employers seek to reopen their businesses and/or hire additional workers, they must offer to certain laid-off workers any position which is or becomes available, for which the worker is qualified. A laid-off worker is considered qualified for a position if the individual:

1. Held the same or similar position at the same site of employment at the time of the worker’s most recent separation from active service with the employer; or


2. Is or can be qualified for the position with the same training that would be provided to a new worker hired into that position.

If more than one laid-off worker is entitled to preference for a position, the employer must offer the position to the worker based on seniority. An offer must be sent to a covered laid-off worker by mail, email, and text message. The worker must be given at least five business days to accept or decline the offer.

Does the Ordinance Apply to My Business?

The ordinance applies to:

1. Hotel Employers – Owners, operators, and managers of residential buildings that: (a) are designated or used for public lodging or other related service for the public; and (b) have at least 50 guest rooms or gross receipts exceeding $5,000,000 in 2019. Hotel Employers also include restaurants located on hotel premises.


2. Airport Employers – Employers that provide any service either: (a) at the City of Los Angeles Department of Airports or any of the airports it operates in the City of Los Angeles; or (b) for any employer that services the City of Los Angeles Department of Airports or any of the airports it operates in the City of Los Angeles.
   
   Airlines are not considered Airport Employers. Employers already having agreements with the City of Los Angeles Department of Airports or any of the airports it operates in the City are exempt if these agreements contain worker rehire provisions.


3. Event Center Employers – Owners, operators, and managers of event centers, defined as any structure that is: (a) at least 50,000 square feet in size or has a seating capacity of at least 1,000; and (b) is used for public performances, sporting events, conventions, business meetings, and similar events.


4. Commercial Property Employers – Owners, operators, managers, lessees, contractors, subcontractors, and sublessees of non-residential properties employing 25 or more janitorial, maintenance, or security service workers. Only the janitorial, maintenance, and security service workers who perform work for Commercial Property Employers are covered by this ordinance. 

Who Are the Workers Covered by This Ordinance?

Covered workers are those:

1. Who perform at least two hours of work per week within the City of Los Angeles for a Hotel Employer, Airport Employer, Event Center Employer, or Commercial Property Employer;


2. Who have worked for a covered employer for at least six months (including any periods of time when the worker was on leave or vacation); and


3. Whose most recent separation from employment occurred on or after March 4, 2020, and resulted from a lack of business, a reduction in force, or another economic, non-disciplinary reason.

There is a rebuttable presumption that any termination occurring on or after March 2020 was due to a non-disciplinary reason.

Workers who act as managers, supervisors, or confidential employees, or who primarily do sponsorship sales for an Event Center Employer are not covered by this ordinance.

What Is the Effect of a Collective Bargaining Agreement?

If a collective bargaining agreement (CBA) that is in effect on June 14, 2020, contains a right of recall provision, that provision supersedes this ordinance.

Once a CBA expires or is otherwise open for renegotiation, this ordinance may only be waived if the waiver is explicitly set forth in clear and unambiguous terms.

Can Employers Require Workers to Sign a Waiver of Rights?

No. Any waiver by a worker of any or all provisions of this ordinance is unenforceable.

Anti-Retaliation Provision

The ordinance prohibits employers from terminating, discriminating against, or reducing the pay of any worker who exercises their rights under the ordinance.

What Are the Consequences of Not Following the Ordinance?

Any worker claiming a violation of the ordinance may be awarded: (a) hiring and reinstatement rights; (b) the greater of $1,000 in statutory damages or the worker’s actual damages (including, but not limited to, back pay and benefits); (c) punitive damages; and (d) attorneys’ fees and costs.

A worker must meet the ordinance’s notice requirements before filing a civil action for a violation of the ordinance.

How Long Is the Ordinance In Effect?

The ordinance contains no official expiration date, but instead requires a report by March 1, 2022, at which time the City will determine whether it needs to remain in place.

Worker Retention Ordinance

What Is the Effect of the Ordinance?

Generally, covered Los Angeles businesses that change ownership must offer to hire or rehire certain covered workers who worked for the initial owner of the business.

Within five days of the effective date of the change in ownership, the initial business owner (Incumbent Business Employer) must post in a conspicuous place a written notice stating:

1. The name and contact information of the Incumbent Business Employer;


2. The name and contact information of the new business owner (Successor Business Employer); and


3. The effective date of the change in ownership.

This written notice must remain posted during any closure of the business and for the first six months in which the business is open to the public under the Successor Business Employer.

Within 15 days of the effective date of the change in ownership, the Incumbent Business Employer must provide the Successor Business Employer with a list of the names, addresses, dates of hire, and position titles of certain workers covered by this ordinance. The Successive Business Employer is required to rehire from this list for the first six months of the business being open to the public. If the Successive Business Employer does not require as many workers as the Incumbent Business Employer, workers must be laid off in order of seniority.

A Successor Business Employer that extends an offer of employment to a worker must: (a) leave the offer open for at least 10 business days; and (b) retain written documentation of the offer for at least three years from the date of the offer.

Workers who are hired or rehired by the Successor Business Employer may not be terminated without cause for the first 90 days of their employment.

At the end of this 90-day period, the Successor Business Employer must prepare a written performance evaluation for the worker and offer the worker continued employment if their performance has been satisfactory. Successor Business Employers must retain written documentation from this 90-day period for at least three years.

Does the Ordinance Apply to My Business?

The ordinance applies to Hotel Businesses, Airport Businesses, Event Center Businesses, and Commercial Property Businesses, defined in the same manner as in the Right of Recall Ordinance.

Who Are the Workers Covered by This Ordinance?

Covered workers are those:

1. Who were employed by the Incumbent Business Employer for at least six months;


2. Whose primary place of employment is subject to a change in ownership;


3. Who is employed or contracted to perform work by the Incumbent Business Employer or by an entity that services the Incumbent Business Employer; and


4. Who worked for the Incumbent Business Employer on or after March 4, 2020, and before the change in ownership went into effect.

Workers who act as managers, supervisors, or confidential employees are not covered by this ordinance.

What Is the Effect of a Collective Bargaining Agreement?

If a CBA that is in effect on June 14, 2020 contains a worker retention provision, that provision supersedes this ordinance.

Once a CBA expires or is otherwise open for renegotiation, this ordinance may only be waived if the waiver is explicitly set forth in clear and unambiguous terms.

Can Employers Require Workers to Sign a Waiver of Rights?

No. Any waiver by a worker of any or all provisions of this ordinance is unenforceable.

Anti-Retaliation Provision

The ordinance prohibits Incumbent and Successor Business Employers from terminating, discriminating against, or reducing the pay of any worker who exercises their rights under the ordinance.

What Are the Consequences of Not Following the Ordinance?

Any worker claiming a violation of the ordinance may be awarded: (a) hiring and reinstatement rights; (b) front or back pay for each day the violation continues; (c) the value of the benefits the worker would have received under the Successor Business Employer’s benefits plan; and (d) attorneys’ fees and costs.

A worker must meet the ordinance’s notice requirements before filing a civil action for a violation of the ordinance.

How Long Is the Ordinance in Effect?

The ordinance contains no official expiration date, but instead requires a report by March 1, 2022, at which time the City will determine whether it needs to remain in place.

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.