Los Angeles Adopts Right of Recall and Worker Retention Ordinances in Response to COVID-19 Pandemic

May 1, 2020
On April 29, 2020, the Los Angeles City Council adopted a Right of Recall Ordinance and a Worker Retention Ordinance, both aimed at protecting hospitality, janitorial, and tourism workers “facing significant job and economic insecurity” due to the COVID-19 pandemic.  That same day, Mayor Garcetti announced that he had signed the two Ordinances into law.
 
Right of Recall Ordinance
  • Covered Employers.  The Right of Recall Ordinance applies only to certain businesses, as defined by the Ordinance: 
    • Airport employers;
    • Commercial property employers that employ 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 (those with 50 or more guestrooms or gross receipts exceeding $5 million in 2019).  Restaurants physically located on hotel premises are also covered.
       
  • Laid Off Workers.  The Ordinance applies only to “laid off worker[s],” meaning any person who, in a particular week, performs at least two hours of work within the geographical boundaries of the City of Los Angeles for a covered employer, has worked for the employer for at least six months, and was discharged on or after March 4, 2020, due to lack of business, a reduction in work 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 due to a non-disciplinary reason. 
     
  • Exceptions.  The 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.
  • Right of Recall.  The Ordinance requires employers to offer qualified 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.
     
  • Meaning of Qualified.  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.”  If 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.
     
  • Time to Accept.  A laid off worker who is offered a position pursuant to this Ordinance must be given at least five business days to accept or decline the offer.
     
  • Retaliatory Action Prohibited.  An employer may not discharge, reduce in compensation, or otherwise discriminate against any worker for opposing any practice proscribed by the Ordinance, for participating in proceedings related to the Ordinance, for seeking to exercise his or her rights under the Ordinance by any lawful means, or for otherwise asserting rights under the Ordinance.
     
  • Enforcement.  After providing written notice to the relevant employer of an alleged violation of the Ordinance and allowing the employer 15 days to cure the alleged violation, a laid off worker may file a civil suit to seek reinstatement, the greater of actual damages or $1,000 in statutory damages, and punitive damages.  The Ordinance provides that a court shall award “reasonable attorneys’ fees and costs” to (1) a laid off worker who prevails in a civil suit to enforce the Ordinance, and (2) to an employer who prevails in such a civil suit, if the court determines that the laid off worker’s civil suit was “frivolous.”

Worker Retention Ordinance
  • Covered Employers.  The Worker Retention Ordinance applies to the same businesses as the Right of Recall Ordinance.
     
  • Employer’s Responsibilities.  The Worker Retention Ordinance seeks to protect workers’ jobs when there is a change of ownership or control within two years following the declaration of emergency resulting from the COVID-19 pandemic.  Specifically, within 15 days of the execution of a “transfer document” as defined in the Ordinance, 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 the workers on a preferential hiring list.  The successor business employer must hire from that list, beginning with execution of the transfer document and continuing for six months after the business is open to the public under the successor business employer.  Verification of any offer of employment to a worker must be retained for three years.
     
  • Covered Workers.  The Ordinance applies to workers employed by a covered incumbent business employer: 
    • (1) who have worked for the incumbent business employer for six months or more;
    • (2) whose primary place of employment is a business subject to a change in control;
    • (3) 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
    • (4) who worked for the incumbent business employer on or after March 4, 2020, and prior to the execution of the transfer document.
       
  • Workers Not Covered.  The Ordinance does not apply to managerial, supervisory, or confidential employees.
     
  • Time to Accept.  A worker who is offered a position during the transition employment period pursuant to this Ordinance must be given a written offer of employment and at least 10 business days to accept or decline the offer. 
     
  • Transition Employment Period.  Any worker hired pursuant to this Ordinance must be retained by the successor business employer for at least 90 days, unless the successor business employer has cause to discharge the worker.  After 90 days, 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 years. 
     
  • Limited Positions.  If, within six 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 to the worker in the same occupational classification who had the greatest length of service with the incumbent business employer.
     
  • Notice of Change in Control.  Within five 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 the location of the affected business.  This notice must remain posted during any closure of the business and for six months after the business is open to the public under the successor business employer.
     
  • Retaliatory Action Prohibited.  As under the Right to Recall Ordinance, an employer may not discharge, reduce in compensation, or otherwise discriminate against any worker for opposing any practice proscribed by the Ordinance, for participating in proceedings related to the Ordinance, for seeking to exercise his or her rights under the Ordinance by any lawful means, or for otherwise asserting rights under the Ordinance.
     
  • Enforcement.  After providing written notice to the relevant employer of an alleged violation of the Ordinance and allowing the employer 15 days to cure the alleged violation, a worker may file a civil suit to seek reinstatement for the 90-day transition employment period under the Ordinance, front and back pay and the value of the benefits the worker would have received under the successor business employer’s benefits plan.
As the COVID-19 situation continues to develop, and federal, state, and local governments issue additional guidance, employers need to be cognizant of new guidance and requirements.  For more information, please visit S&C’s page regarding Coronavirus updates.