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

On May 4, 2020, Mayor Eric Garcetti signed two new ordinances governing employee right of recall and worker retention in the City of Los Angeles. The ordinances provide certain rights and preferences to various workers whose employment has been affected by the COVID-19 crisis. The ordinances become effective on June 14, 2020.

COVID-19 Right of Recall Ordinance

The COVID-19 Right of Recall ordinance (No. 186602, Article 4-72J-A) requires certain employers to rehire employees laid off from work on or after March 4, 2020, pursuant to specific rehire procedures. The ordinance applies to employees who worked for an “Airport Employer;” a “Commercial Property Employer” (limited to janitorial, maintenance, and security services employees); an “Event Center Employer”; and a “Hotel Employer.”

Summary

The Right of Recall ordinance requires employers to make a written offer of employment to “laid off workers” for any available position for which the laid-off employee qualifies after the effective date of the ordinance. The employer must give the worker at least five business days to accept the offer.

The ordinance defines “Laid Off Workers” as those (1) who, in a particular week, performed at least two hours of work within the City of Los Angeles; (2) who have at least six months or more of service with the employer (including vacation and leave time); and (3) who were discharged on or after March 4, 2020, because of lack of business, a reduction in force, or other economic, non-disciplinary reasons. The ordinance “creates a rebuttable presumption that any termination occurring on or after March 4, 2020, was due to a non-disciplinary reason.”

To qualify for rehire, the laid-off worker must:

1. have “held the same or similar position at the same site of employment at the time of . . . separation”; or
2. “qualif[y] for the position with the same training that would be provided to a new worker hired into that position.”

The ordinance gives hiring preference to the worker with the greatest length of service at the same worksite.

Exceptions

The ordinance also contains several exceptions, including the following:

1. Laid-off workers do not include managers, supervisors, confidential employees, or persons whose “primary job responsibility [is] sponsorship sales” for an event center employer.
2. A collective bargaining agreement in place as of June 14, 2020, that contains a right of recall provision supersedes the Right of Recall ordinance.

Penalties

Laid-off workers may file a lawsuit against employers that fail to comply with the requirements of the ordinance, but only after (1) the employee has provided written notice to the employer of the alleged violations, and (2) the employer has failed to cure such violations within 15 days from receipt of the notice. Under the ordinance, workers may be awarded reinstatement, lost pay and benefits, punitive damages, and reasonable attorneys’ fees and costs.

COVID-19 Worker Retention Ordinance

The COVID-19 Worker Retention ordinance (No. 186603, Article 4-72J-B) applies to the same categories of employers as does the Right of Recall ordinance when selling or transferring an applicable business.

Summary

Within 15 days of an ownership transfer, the seller (or “Incumbent Business”) must provide the buyer (or “Successor Business”) with a list of its workers—including name, address, date of hire, and classification—so the incumbent business’s employees receive hiring priority. For the first six months after the successor business opens, it must make written employment offers to workers on the list before making offers to other individuals. The successor business must keep the offer open for at least 10 business days.

After hiring a worker from the list, the successor business must employ the worker for a 90-day transition employment period during which the employer can terminate the employment relationship only for cause. The successor business must provide each worker with a written performance evaluation at the end of the 90-day transition period and the business must consider continuing their employment if their performance is satisfactory or above.

If the successor business determines it will operate with fewer employees than the incumbent business, it must give priority to the most senior employees on the list in the same classification.

The ordinance also requires that successor businesses retain all written offers and performance evaluations for a period of not less than three years, and that incumbent businesses post a “Notice of Change in Control” at the affected location(s) within five business days of the ownership transfer.

Exceptions

The ordinance also contains several exceptions, including the following:

1. For purposes of classifying individuals employed by the incumbent business, the term “worker” excludes managers, supervisors, and confidential employees from the retention requirements.
2. A collective bargaining agreement in place as of June 14, 2020, that contains a retention provision supersedes the Worker Retention ordinance.

Penalties

Affected workers may file a lawsuit against either the incumbent business or successor business for violations of the ordinance; however, a 15-day cure period is available after notice of an alleged violation. Penalties include reinstatement, front pay, back pay, lost benefits, and reasonable attorneys’ fees and costs.

Both ordinances strictly prohibit retaliation.

Ogletree Deakins will continue to monitor and report on developments with respect to the COVID-19 pandemic and will post updates in the firm’s Coronavirus (COVID-19) Resource Center as additional information becomes available. Important information for employers is also available via the firm’s webinar programs.