Two New Los Angeles Ordinances Create New Worker Recall and Retention Protections… For Select Businesses

Written by Jeremy Mittman and Bethanie Thau 

On May 4, 2020, Mayor Garcetti signed two new city ordinances creating recall and retention protections for non-supervisory workers in certain industries deemed severely impacted by the COVID-19 pandemic and “Safer at Home” declarations by Governor Newsom and Mayor Garcetti. The COVID-19 Right of Recall Ordinance and COVID-19 Worker Retention Ordinance become effective June 14, 2020, but cover workers laid off on or after March 4, 2020.

Covered Businesses.  Both Ordinances impact the following Los Angeles businesses:

• Airport Businesses. Coverage is limited to airport businesses governed by the Los Angeles Living Wage Ordinance that provide services at any Los Angeles airport, or to a business servicing a Los Angeles airport. The Ordinances exclude airlines and any business already party to an agreement with the airport containing worker rehire/retention provisions.
• Commercial Property Businesses. Property owners, operators, managers, or lessees of any Los Angeles non-residential property employing 25 or more janitorial, maintenance, or security service workers must comply with the Ordinances with respect to janitorial, maintenance and security employees only.
• Event Center Businesses. Coverage is limited to businesses that own, operate or manage an event structure of over 50,000 square feet or with a seating capacity of 1,000 or more seats.  These businesses include concert halls, stadiums, sports arenas, racetracks, coliseums, and convention centers.
• Hotel Businesses. Coverage is limited to hotels with 50 or more guestrooms or gross receipts of more than $5 million in 2019.  Covered hotel businesses expressly include any restaurant physically located on the property.

The Right of Recall Ordinance.  This Ordinance requires covered businesses to offer recall to qualifying non-supervisory workers.  Laid off workers qualifying for recall include workers who: (1) worked for the employer for six months or more; (2) performed at least two hours of work a week in Los Angeles; and (3) were separated from employment on or after March 4, 2020, for economic (not disciplinary) reasons.

Once the worker’s same or similar position reopens, the employer must offer recall in writing and allow the worker a minimum of five business days to consider the offer.  Recall rights also extend to any position which the worker can be qualified for with the same training provided to any new worker.  The Ordinance spells out recall priority where more than one worker may be entitled to recall.

The Worker Retention Ordinance.  This Ordinance applies to any change in control of a covered business from March 4, 2020 through March 4, 2022.  The Ordinance mandates that the successor business hire workers from its predecessor’s recall list for at least six months after opening under new ownership.

Within five business days after execution of the change in control agreement, the businesses must post a notice of the change in control at the location of the sold business and maintain that posting for the duration of any closure and for six months after re-opening.

Within 15 days after execution of the agreement, the selling business must provide the successor with a hiring list of non-supervisory workers.  This list includes workers: (1) who worked for the selling employer for six months or more; (2) whose primary place of employment was the seller’s business; (3) who were employed by, or contracted to perform services for, the selling employer; and (4) who worked for the selling employer on or after March 4, 2020.

The Ordinance requires the successor business to hire from the hiring list from the date of the execution of the change in control agreement through six months after the business is open to the public under the successor business.  The successor business is not required to maintain the same number of workers as its processor if it determines it requires fewer workers.  In such cases, the business must offer positions based on length of service.

Hiring offers must be in writing and held open for at least 10 business days from the date of the offer.  The employer must maintain offer records for a minimum of three years.

The successor business must retain workers hired under this Ordinance for a minimum of 90 days and only may terminate them for cause.  After the 90-day period, the successor business must conduct written performance evaluations and consider offering employment to satisfactory workers.  Employers must retain these performance evaluations for three years.

Exclusions.  The Right of Recall Ordinance excludes Event Center sponsorship sales employees, and both Ordinances exclude managerial, supervisory, and confidential employees.  Both Ordinances also carve out union employees covered by collectively-bargained worker retention and recall provisions.

Enforcement:  Both Ordinances permit workers to file suit in California Superior Court for violation of the Ordinances, but only after providing the employer with written notice and 15-day opportunity to cure.  Available remedies include hiring and reinstatement rights, economic damages, and attorneys’ fees.  The Right of Recall Ordinance also provides for punitive damages.