L.A. Mayor Eric Garcetti has signed two new ordinances, the Right of Recall Ordinance and the Worker Retention Ordinance, each effective June 14, 2020, which place heavy burdens on certain Los Angeles employers that reopen and rehire employees after laying off or furloughing employees due to the financial strain caused by the COVID-19 pandemic.
Right of Recall Ordinance
The Right of Recall Ordinance requires airport, commercial property, event center, and hotel employers (as defined here) to offer a laid off worker any position that becomes available after June 14, 2020, for which the laid off worker is qualified. Laid off workers are qualified for a position if they:
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; or
Are or can be qualified with the same training that would be provided to a new worker in that position.
The offer must be made in writing to the laid off worker’s last known mailing address, email, and text message phone number.
If more than one laid off worker is qualified for a position, and is therefore entitled to an offer of employment, the employer must offer the position to the worker with the greatest length of service in the same or similar position at the employer’s site. If neither worker held the same or similar position, the position should be offered to the laid off worker with the greater length of service with the employer at the employment site where the hiring is taking place. Workers who are offered the position must be given at least five business days in which to accept or decline the offer.
Laid off workers who believe their former employer has violated the Right of Recall Ordinance may bring an action in state court only after the laid off worker first provides written notice to the employer of the alleged violations, along with factual support, and the employer is allowed 15 days to cure any alleged violation. Remedies for violations include reinstatement, actual damages, punitive damages, and reasonable attorneys’ fees.
The Right of Recall Ordinance cannot be waived by any worker, so covered employers must provide an offer of employment, regardless of whether an individual agrees to waive his or her rights under the ordinance. The ordinance also contains an exemption for workers whose employment was subject to a valid collective bargaining agreement that already contained a right to recall clause. In such instances, employers should comply with the directives in the collective bargaining agreement.
The Office of Wage Standards of the Bureau of Contract Administration is tasked with drafting Rules and Regulations associated with the provisions of the Right to Recall Ordinance.
Worker Retention Ordinance
The Worker Retention Ordinance requires employers in the same industries listed above to provide preference to workers employed by an incumbent business in the event that an incumbent business sells its business or otherwise changes ownership to a successor business in the wake of the COVID-19 pandemic.
Incumbent businesses must, within 15 days of executing a transfer document, provide a list of every worker, along with their address, date of hire, and occupation classification to the successor business. A “worker” is a non-managerial, supervisory, or confidential employee who worked for the business after March 4, 2020, and who has a length of service of six months or more. Successor businesses must maintain a preferential list of workers and are required to hire from that list for a period of six months after the business is open to the public following execution of the transfer of the business. A worker hired by a successor employer must be retained for at least 90 days after the commencement of employment, unless the employee is terminated “for cause.”
Hiring of successor employees must be done based on seniority, meaning that if a successor employer does not have enough positions to employ all workers from the incumbent employer, the employees with the greatest length of service with the incumbent employer must be given offers of employment before those employees with less service time.
Importantly for successor employers, at the end of the 90 day period following the opening of business after the transfer, the employer must perform written performance evaluations for all workers retained pursuant to the Worker Retention Ordinance. These performance evaluations must be kept by the successor employer for at least three years.
Los Angeles employers that have either sold or purchased a new business during the COVID-19 pandemic must be aware of the nuances of the Worker Retention Ordinance and should consult with legal counsel to ensure compliance.