Los Angeles Adopts COVID-19 Right of Recall and COVID-19 Worker Retention Ordinances

On April 29, 2020, the City of Los Angeles adopted the COVID-19 Right of Recall Ordinance and COVID-19 Worker Retention Ordinance. On May 3, 2020 Mayor Eric Garcetti approved the ordinances. Both ordinances go into effect on June 14, 2020.

COVID-19 Right of Recall Ordinance

The COVID-19 Right of Recall Ordinance requires “Employers” (defined below) to provide job offers to “Laid Off Workers” (defined below) who were laid off on or before March 4, 2020, in writing (to the last known mailing address, email, and phone number via text message), of any position which is or becomes available after June 14, 2020 for which the Laid Off Worker is qualified. For more information, please see below.

1.  Employer:

An “Employer” is an Airport Employer, a Commercial Property Employer, an Event Center Employer, and a Hotel Employer.

• Airport Employer: Any employer that provides any service at the Airport or provides any service to any employer servicing the Airport, and is required to comply with the Los Angeles Living Wage Ordinance, Los Angeles Administrative Code Sections 10.37 et seq. An Airport Employer does not include: an airline or an employer that is party to an agreement with the Airport that contains a worker rehire requirement.

• Commercial Property Employer: An owner, operator, manager or lessee, including a contractor, subcontractor or sublessee, of a non-residential property in the City that employs 25 or more janitorial, maintenance or security service workers. Only the janitorial, maintenance, and security service workers who perform work for a Commercial Property Employer are covered by this article.

• Event Center Employer: An owner, operator or manager of a publicly or privately owned structure in the City of more than 50,000 square feet or with a seating capacity of 1,000 seats or more that is used for public performances, sporting events, business meetings or similar events. An event center includes, but is not limited to, concert halls, stadiums, sports arenas, racetracks, coliseums, and convention centers.

• Hotel Employer: An owner, operator or manager of a residential building in the City designated or used for public lodging or other related service for the public and either contains 50 or more guestrooms or has earned gross receipts in 2019 exceeding $5 million. A Hotel Employer includes the owner, operator, manager or lessee of any restaurant physically located on hotel premises.

2. Laid Off Worker:

Any person who: (1) in a particular week, performs at least two hours of work within the geographical boundaries of the City of Los Angeles, (2) has a Length of Service with the Employer of six months or more, and (3) whose most recent separation from active employment by the Employer occurred on or after March 4, 2020, as a result of a lack of business, a reduction in work force or other economic, non-disciplinary reason.

• A Laid Off Worker is NOT a manager, supervisor, confidential employee or a person who performs as their primary job responsibility sponsorship sales for an Event Center Employer.

• Length of Service: The total of all periods of time during which a Worker has been in active service to an Employer, including periods of time when the Worker was on leave or vacation.

• Rebuttable Presumption: Any termination occurring on or after March 4, 2020, was due to a non-disciplinary reason.

3. Priority to Rehire Laid Off Workers:

A Laid Off Worker is qualified – and must be offered a position in the order of priority below – if the Laid Off Worker: (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 entitled to preference for a position, the Employer shall offer the position to the Laid Off Worker with the greatest Length of Service in (1) and then (2) with the Employer at the employment site.

4. Notice Requirement to Worker:

An Employer shall make the offer to a Laid Off Worker, in writing, to the last known mailing address, electronic mail, and text message phone number. A Laid Off Worker who is offered a position pursuant to this article shall be given no less than five (5) business days in which to accept or decline the offer.

5. Enforcement:

• A Laid Off Worker may bring an action in the Superior Court of the State of California against an Employer for violations of this article and may be awarded: (1) Hiring and reinstatement rights pursuant to this article; (2) All actual damages (including, but not limited to, lost pay and benefits) suffered by the Laid Off Worker and for statutory damages in the sum of $1,000, whichever is greater; and (3) Punitive damage, pursuant to California Civil Code Section 3294; and (4) Reasonable attorneys’ fees and costs.

• A civil action by a Laid Off Worker alleging a violation of any provision of this article shall commence only after the following requirements have been met: (1) The Laid Off Worker provides written notice to the Employer of the provisions of the article alleged to have been violated and the facts to support the alleged violation; and (2) the Employer is provided 15 days from receipt of the written notice to cure any alleged violation.

• Notwithstanding any provision of this Code, or any other ordinance to the contrary, no criminal penalties shall attach for violation of this article.

6. Collective Bargaining Agreement:

An employer with a collective bargaining agreement in place on June 14, 2020 that contains a right of recall provision will be exempt from this ordinance. When the collective bargaining agreement expires or is otherwise open for renegotiation, the provisions of this article may only be waived if the waiver is explicitly set forth in the agreement in clear and unambiguous terms. If a collective bargaining agreement is in place on the effective date of this article but the agreement does not include a right of recall provision, this article applies. A collective bargaining agreement may be amended at any time to explicitly waive with clear and unambiguous terms the provisions of this article.

7. No Waiver of Rights:

Other than in connection with the bona fide negotiation of a collective bargaining agreement, (1) any waiver by a worker of any or all provisions of this article shall be deemed contrary to public policy and shall be void and unenforceable, and (2) any request by an Employer to a worker to waive rights given by this article shall constitute a violation of this article.

COVID-19 Worker Retention Ordinance

The COVID-19 Worker Retention Ordinance complements the COVID-19 Right of Recall Ordinance. It impacts “Businesses” (defined below) that experience a “Change in Control” (defined below) from a previous Employer (i.e., “Incumbent Business Employer”) to a new Employer (i.e., “Successor Business Employer”). The ordinance requires:

• (1) the previous Employer to provide to the new Employer, within 15 days after execution of a “Transfer Document” (defined below), the name, address, date of hire, and occupation classification of each Worker (the “List”);

• (2) the new Employer to maintain the List and to hire from the List for a period of time beginning upon the execution of the Transfer Document and continuing for six months after the Business is open to the public under the new Employer, and if the new Employer chooses not to retain everyone on the List during the aforementioned time period, the new Employer must retain workers based on seniority;

• (3) workers who receive an offer of employment from the new Employer to be (a) retained for 90 days, (b) fired only with cause during the 90-day time period, (c) provided with a new offer letter during the 90-day time period, and (d) provided with a written performance evaluation at the end of the 90-day time period; and

• (4) notice to be provided to Workers that a “Change in Control” is occurring.

For more information, please see below.

1. Business: A “Business” is an Airport Business, a Commercial Property Business, an Event Center Business, and a Hotel Business.

• Airport Business: A business that provides any service at the Airport or provides any service to any business servicing the Airport, and is required to comply with the Los Angeles Living Wage Ordinance, Los Angeles Administrative Code Sections 10.37 et seq. An “Airport Business” does not include: an airline or a business that is party to an agreement with the Airport that contains a worker rehire requirement.

• Commercial Property Business: An owner, operator, manager, or lessee, including a contractor, subcontractor, or sublessee, of a non-residential property in the City that employs 25 or more janitorial, maintenance, or security service workers. Only the janitorial, maintenance, and security service workers who perform work for a Commercial Property Business are covered by this article.

• Event Center Business: An owner, operator, or manager of a publicly or privately owned structure in the City of more than 50,000 square feet or with a seating capacity of 1,000 seats or more that is used for public performances, sporting events, business meetings, or similar events. An “Event Center Business” includes, but is not limited to, concert halls, stadiums, sports arenas, racetracks, coliseums, and convention centers.

• Hotel Business: An owner, operator or manager of a residential building in the City designated or used for public lodging or other related service for the public and either contains 50 or more guestrooms or has earned gross receipts in 2019 exceeding $5 million. A “Hotel Business” includes the owner, operator, manager, or lessee of any restaurant physically located on hotel premises.

2. Worker:

An individual employed by the Incumbent Business Employer: (1) who has a Length of Service with 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 is 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.

• A “Worker” does NOT include a managerial, supervisory, or confidential employee.

• Length of Service: The total of all periods of time during which a Worker has been in active service to an employer, including periods of time when the Worker was on leave or vacation.

3. Other Definitions:

• Incumbent Business Employer: The Person who owns, controls, or operates a Business prior to the Change in Control

• Successor Business Employer: The Person who owns, controls, or operates a Business after the Change in Control.

• Change of Control: Any sale, assignment, transfer, contribution, or other disposition of all or substantially all of the assets used in the operation of a Business, or a discrete portion of a Business that continues to operate as the same type of Business of the Incumbent Business Employer, or any Person who controls the Incumbent Business Employer.

• Transfer Document: The purchase agreement or other documents creating a binding arrangement to effect the Change in Control.

4. Requirements Between Incumbent and Successor Business Employer:

• Provide a List of Workers: The Incumbent Business Employer shall, within 15 days after execution of a Transfer Document, provide to the Successor Business Employer the name, address, date of hire, and occupation classification of each Worker (the “List”)

• Priority to Hire Workers From the List: The Successor Business Employer shall maintain the List, and shall be required to hire from the List for a period of time beginning upon the execution of the Transfer Document and continuing for six months after the Business is open to the public under the Successor Business Employer.

• Priority to Retain Most Senior Workers: If during the aforementioned period of time, the Successor Business Employer determines that it requires fewer Workers than were required by the Incumbent Business Employer, the Successor Business Employer shall offer the position to the Worker in the same occupational classification with the greatest Length of Service with the Incumbent Business Employer. In other words, the Successor Business Employer must retain employees based on seniority. 

• Documentation Requirement: If the Successor Business Employer extends an offer of employment to a Worker, the Successor Business Employer shall retain written verification of that offer for no fewer than three years from the date the offer was made. The verification shall include the name, address, date of hire, and occupation classification of each Worker.

5. 90-Day Transition Employment Period:

If the Successor Business Employer chooses to extends an offer of employment to a Worker, the Successor Business Employer shall be subject to a 90-Day Transition Employment Period.

• Must Retain Employee for 90 Days: A Successor Business Employer shall retain each Worker hired pursuant to this article for no fewer than 90 days following the Worker’s Employment Commencement Date.

• May ONLY Terminate Workers’ Employment With Cause: During the 90-day transition employment period, the Successor Business Employer shall not discharge without cause a Worker retained pursuant to this article.

• Must Provide New Offer Letter: During the 90-day transition employment period, a Worker shall be employed under reasonable terms and conditions of employment or as required by law. The Successor Business Employer shall provide a Worker with a written offer of employment for the transition period. This offer shall remain open for at least ten business days from the date of the offer.

• Must Provide Written Performance Evaluation: At the end of the 90-day transition employment period, the Successor Business Employer shall perform a written performance evaluation for each Worker retained pursuant to this article. If the Worker’s performance during the 90-day transition employment period is satisfactory, the Successor Business Employer shall consider offering the Worker continued employment under the terms and conditions established by the Successor Business Employer or as required by law.

• Documentation Requirement: The Successor Business Employer shall retain a record of the written performance evaluation period of no fewer than three years.

6. Notice Requirement to Workers:

• Notice Time Period: The Incumbent Business Employer shall post written notice of the Change in Control at the location of the affected Business within five business days following the execution of the Transfer Document. Notice shall 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.

• Notice Content: Notice shall include, but not be limited to, the name of the Incumbent Business Employer and its contact information, the name of the Successor Business Employer and its contact information, and the effective date of the Change of Control

• Notice Location: Notice shall be posted in a conspicuous place at the Business visible to Workers, other employees, and applicants for employment.

7. Enforcement:

• A Worker may bring an action in the Superior Court of the State of California against an Incumbent Business Employer or the Successor Business Employer for violations of this article and may be awarded: (1) Hiring and reinstatement rights pursuant to this article; (2) front or back pay for each day the violation continues, which shall be calculated at a rate of compensation not less than the higher of: (a) the average regular rate of pay received by the Worker during the last three years of their employment in the same occupation classification or (b) the most recent regular rate received by the Worker while employed by either the Business, Incumbent Business Employer, or the Successor Business Employer; (3) value of the benefits the Worker would have received under the Successor Business Employer’s benefits plan.

• A civil action by a Worker alleging a violation of any provision of this article shall commence only after the following requirements have been met: (1) The Worker provides written notice to the Incumbent Business Employer and/or the Successor Business Employer of the provisions of this article alleged to have been violated and the facts supporting the alleged violation; and (2) The Incumbent Business Employer and/or the Successor Business Employer is provided 15 days from receipt of the written notice to cure any alleged violation.

• The court shall award reasonable attorneys’ fees and costs to a Worker who prevails in any such enforcement action and to a Business employer who prevails and obtains a court determination that the Worker’s lawsuit was frivolous.

• Notwithstanding any provision of this Code, or any other ordinance to the contrary, no criminal penalties shall attach for violation of this article.

8. Collective Bargaining Agreement:

An employer with a collective bargaining agreement in place on June 14, 2020 that contains a worker retention provision will be exempt from this ordinance. When the collective bargaining agreement expires or is otherwise open for renegotiation, the provisions of this article may only be waived if the waiver is explicitly set forth in the agreement in clear and unambiguous terms. If a collective bargaining agreement is in place on the effective date of this article, but the agreement does not include a worker retention provision, this article applies. A collective bargaining agreement may be amended at any time to explicitly waive with clear and unambiguous terms the provisions of this article.

9. No Waiver of Rights:

Other than in connection with the bona fide negotiation of a collective bargaining agreement, (1) any waiver by a worker of any or all provisions of this article shall be deemed contrary to public policy and shall be void and unenforceable, and (2) any request by an Employer to a worker to waive rights given by this article shall constitute a violation of this article.

Contact your Payne & Fears attorney to discuss how this ordinance applies to your business.