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City of Los Angeles Right of Recall and Worker Retention Ordinances Take Effect (US)

In the midst of the COVID-19 pandemic, Los Angeles, California Mayor Eric Garcetti signed the Right of Recall and Worker Retention Ordinances into law to protect employees in some of the industries hardest hit by the economic fallout caused by the coronavirus.  The Los Angeles County Board of Supervisors is considering extending these ordinances to the more than 120 unincorporated areas of Los Angeles County, but they currently only are effective within the geographical boundaries of the City of Los Angeles.  Here is what Los Angeles employers in the airport, commercial property, event center, and hotel industries need to know now.

Covered Employers

The Right of Recall and Worker Retention Ordinances each apply to:

  • airport employers (but not airlines);

  • commercial property employers employing 25 or more janitorial, maintenance, or security service workers;

  • event center employers, including concert halls, stadiums, sports arenas, convention centers, and racetracks; and

  • hotel employers with 50 or more guestrooms or gross receipts exceeding $5 million in 2019 (includes restaurants physically located on covered hotel premises).

Right of Recall Ordinance

Employer Obligations

The Right of Recall Ordinance requires employers to offer laid off employees, in writing, any position that is or becomes available after the effective date of the Ordinance for which the laid off worker is qualified.  A laid off worker who is offered a position pursuant to this Ordinance must be given at least five (5) business days to accept or decline the offer.  The Right to Recall Ordinance will be in effect in Los Angeles until at least March 1, 2022.

Covered Employees

For purposes of the Right of Recall Ordinance, a “laid off worker” is any person who, in a particular week, performs at least two hours of work for a covered employer within the City of Los Angeles, has worked for the employer for at least six (6) months, and was discharged on or after March 4, 2020, due to lack of business, a reduction in force, or other economic, non-disciplinary reason. The Ordinance also creates a rebuttable presumption that any termination occurring on or after March 4, 2020, was for a non-disciplinary reason.

A laid off worker is “qualified” if he or she: (1) “held the same or similar position at the same site of employment” at the time of the laid off 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.”  In the event that more than one laid off worker is qualified for a position, the employer must offer the position to the laid off worker with the greatest length of service with the employer at the employment site, first to those laid off workers qualified in (1) above and then to those qualified in (2) above.

The Right of Recall Ordinance does not apply to managers, supervisors, confidential employees, and persons who perform sponsorship sales for an event center employer as their primary job responsibility.

Enforcement

After providing written notice to the employer of an alleged violation of the Right to Recall Ordinance, the employer has fifteen (15) days to cure the alleged violation.  If the alleged violation is not cured, the laid off worker may file a civil suit to seek reinstatement, actual damages or $1,000 in statutory damages (whichever is greater), and punitive damages.  Additionally, a court shall award reasonable attorney fees and costs to a laid off worker who prevails in a suit to enforce the Ordinance and/or to an employer who prevails in such a civil suit if the court determines the laid off worker’s suit was frivolous.

Worker Retention Ordinance

Employer Obligations

The Worker Retention Ordinance seeks to protect workers’ jobs when there is a change of ownership or control within two (2) years following the declaration of an emergency resulting from the COVID-19 pandemic.  Specifically, within fifteen (15) days of the execution of a “transfer document” the incumbent business employer must provide a list of its workers (including name, address, date of hire, and occupation classification) to the successor business employer, who is required to place those workers on a preferential hiring list.  The successor business employer must hire from that list, beginning from the date of execution of the transfer document and continuing for six (6) months after the business is open to the public under the successor business employer.

A worker must be given a written offer of employment under this Ordinance and at least ten (10) business days to accept or decline the offer.  Verification of any offer of employment to a worker must be retained for three (3) years.

Within five (5) days following execution of the transfer document, the incumbent business employer must post written notice of the change in control in a conspicuous place at a location of the affected business.  This notice must remain posted during any closure of the business and for six (6) months after the business is open to the public under the successor business employer.

Covered Employees

The Worker Retention Ordinance applies to workers employed by a covered incumbent business employer:

  • who have worked for the incumbent business employer for a six (6) months or more;

  • whose primary place of employment is a business subject to a change in control or ownership;

  • who are employed or contracted to perform work functions directly by the incumbent business employer, or by a person who has contracted with the incumbent business employer to provide services at the business subject to the change in control; and

  • who worked for the incumbent business employer on or after March 4, 2020, and prior to the execution of the transfer document.

Like the Right of Recall Ordinance, the Worker Retention Ordinance does not apply to managerial, supervisory, or confidential employees.

Additional Requirements for Successor Employers

Any worker hired pursuant to this Ordinance must be retained by the successor business employer for at least ninety (90) days, unless the successor business employer has cause to terminate the worker.  This 90-day period is referred to by the Ordinance as the “Transition Employment Period.”  After the Transition Employment Period expires, the successor business employer must perform a written performance evaluation for each worker retained under the Ordinance and, if the worker’s performance is satisfactory, consider offering the worker continued employment.  A record of the written performance evaluation must be kept for three (3) years.

If, within six (6) months of reopening, the successor business employer determines that it requires fewer workers than were required by the incumbent business employer, it must offer the position in question to the worker in the same occupational classification who had the greatest length of service with the incumbent business employer.

Enforcement

After providing written notice to the relevant employer of an alleged violation of the Worker Retention Ordinance, the employer has fifteen (15) days to cure the alleged violation.  If the alleged violation is not cured, the employee may file a civil suit to seek reinstatement for the 90-day Transition Employment Period, front and back pay and the value of the benefits the worker would have received under the successor business employer’s benefits plan.

Retaliation Prohibited

Employers may not discharge, reduce in compensation, or otherwise discriminate against any worker for opposing any practice prohibited by either the Worker Retention or Right to Recall Ordinances.  Nor may employers discriminate against workers for participating in proceedings related to either ordinance or seeking to exercise their rights under either ordinance.

© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume X, Number 133

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About this Author

Partner

Carmen Cole is a partner in the Labor & Employment Practice Group. Carmen works with employers to navigate complex employment law issues. Her prior experience as a human resources professional places her in a unique position to understand clients’ issues from a legal and business perspective. Carmen provides advice and counseling to employers on workplace issues, such as compliance with wage and hour laws, reductions in force, recruitment and hiring, employee classification, leave laws and terminations.


Carmen’s practice also consists of litigation defense and counseling....

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