Update July 22: This blog has been updated to reflect current guidance about Oakland's right to recall for laid-off hospitality workers.
Oakland passed the Hospitality and Travel Worker Right to Recall Ordinance, giving recently laid off employees priority when businesses resume operations. These new obligations will survive bankruptcy proceedings and transfers of ownership and add more complexity to business operations during COVID-19.
The ordinance took effect on July 23, 2020, but will not be enforced until August 15, 2020. The text of the ordinance can be found here.
Who Is Covered by the Ordinance?
The ordinance applies to employees who were: (1) employed for at least six months in the 12 months preceding January 31, 2020; and (2) laid off after January 31, 2020, for economic, non-disciplinary reasons. Such reasons include a reduction in force, or lack of business due to a stay-at-home order. According to the text, the ordinance also applies to layoffs resulting from a bankruptcy.
The ordinance only applies to certain businesses:
- Airport Hospitality Operations: Businesses that provide food, beverage, retail, or other consumer goods or services to the public at the Oakland International Airport. This does not include air carriers.
- Airport Service Providers: Businesses that contract with a passenger air carrier to perform food and beverage catering functions or functions on the Oakland International Airport property that are directly related to air transportation for persons, property, or mail.
- Event Centers: Structures with more than 50,000 square feet or 5,000 seats used for public performances, sporting events, business meetings, or similar events. This includes contracted, leased, or sublet premises connected to or operated in conjunction with an event center’s purpose (including food preparation facilities, concessions, retail stores, restaurants, bars, and parking facilities).
- Hotels: Buildings with 50 or more guest rooms, including any contracted, leased, or sublet premises connected to or operated in conjunction with the building’s purpose or providing services at the building.
- Restaurants: This includes full-service restaurants, limited service restaurants and cafes, fast food restaurants, and alcoholic beverages sales locations.
- Covered Restaurant Employers: Any entity that directly or indirectly owns or operates a restaurant (full service restaurants, limited-service restaurants and cafes, fast food restaurants, and alcoholic beverages sales locations) that also employs more than 500 employees, whether through franchisor/franchisee relationships or a network of franchises.
The ordinance does not apply to the City of Oakland or the Port of Oakland. The provisions of the ordinance may be waived by explicit, clear, and unambiguous language in a collective bargaining agreement.
When Are Employees Entitled to Right of Recall?
Laid-off employees are entitled to be recalled into positions if:
- (1) The available position is the same as or substantially similar to the position held by the employee at the time of layoff; or
- (2) The employee can be qualified for the position with the same training that would be provided to a newly hired employee in that position.
If more than one employee is qualified for a position, offers of recall must be made based on seniority (including periods of leave). Offers must be made in writing by registered mail, as well as by email and text message if the employer possesses such contact information. Employees must be given at least 10 days to accept or reject the offer, calculated from the latest date that the letter, text, or email was sent.
If an employer declines to recall an employee based on lack of qualifications, the employer must send the laid-off employee a written notice of non-selection within 30 days of hiring a different employee for the position. The employer must document the reasons for the decision and maintain a written record for at least three years.
Changes in Ownership
If a business is purchased or otherwise experiences a change in control, the original employer must provide the successor a recall list identifying the name, address, email, phone number, date of hire, and classification of each laid-off employee. The successor employer must comply with the ordinance for 120 days.
The successor employer must retain recalled employees for at least 45 days unless there is cause for discharge. After the 45-day period, the successor must provide a written performance evaluation, and if performance is satisfactory must consider offering continued employment. The successor must retain records of the performance evaluations for at least three years.
What Employers Need to Do Now
Employers will need to assess immediately whether the ordinance applies to their business and, if so, whether the information relevant to the ordinance is being tracked. Employers should develop a compliance plan that will:
- Track new positions to ensure eligible employees are offered or considered for such positions as required by the ordinance;
- Review and potentially update job descriptions and qualifications for purposes of minimizing compliance issues or disputes, while ensuring compliance;
- Create a checklist or protocol for tracking delivery, acceptance, and rejection or expiration of offers; and
- Review document retention plans to ensure all notices and related communications are maintained for the required preservation periods.
Employers are advised to continue to monitor guidance as available from the City concerning this ordinance, which may be issued after August 15, 2020.
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.