Hospitality and event center workers received additional job rights protection under a new ordinance passed by the Minneapolis City Council. The new ordinance requires employers to recall those workers, if and when they are needed in reverse order of seniority. Ordinance No. 2021-12, entitled “Hospitality Worker Right to Recall,” seeks to minimize the impact on affected employees in an industry particularly hard-hit by the COVID-19 pandemic and to stabilize the workforce. The ordinance becomes effective on May 1, 2021, and will remain in effect “until one (1) year after the termination” of the emergency declarations pronounced by Mayor Frey and Minnesota Governor Tim Walz. The ordinance amends Title 2, Chapter 40 of the Minneapolis Code of Ordinances.
Under the ordinance, covered employers include hotels, which are defined as establishments with at least 50 guest rooms that are rented on a transient basis to paying guests. The ordinance also applies to “event centers,” which are defined as buildings that have more than 50,000 rentable square feet or 2,000 fixed seats that are used primarily for public events. This definition also includes businesses that operate in conjunction with such event centers, such as concessionaires, retailers, and restaurants.
Workers who are eligible for the recall rights under the ordinance include those who (1) worked for a covered employer, (2) performed work within the city “for at least eighty (80) hours in the twelve (12) months that preceded March 13, 2020,” (3) were employed “for six (6) months or more in the twelve (12) months preceding March 13, 2020,” and (4) were laid off after that date “due to a government order, lack of business, a reduction in force or other … economic, non-disciplinary reasons.”
Employers will be required to notify laid-off employees by mail, and email or text message if such information is available, of the availability of their former positions or other positions for which the workers are qualified by virtue of past experience or training that would be given to new hires. Laid-off employees will have “at least seven (7) calendar days from the date of the offer” in which to respond to the recall notice or their rights will expire. Under the ordinance, employers are required to maintain records of notices of recall for at least three years.
The Minneapolis Department of Civil Rights will enforce the ordinance and may order relief for any employer violations, including compensatory damages and penalties payable to laid-off employees and civil fines of up to $1,000 per violation payable to the department. The ordinance does not expressly provide for a private right of action. The ordinance expressly applies to “successor employers” and prohibits retaliation against—and denial or interference with—workers who exercise or attempt to exercise their rights under the ordinance.
Unionized employers will be familiar with the recall rights following a layoff as most collective bargaining agreements in the city contain such provisions. It is unclear whether the ordinance will control over relevant provisions of a collective bargaining agreement or whether federal labor law will preempt the ordinance. In some instances, the ordinance may be identical with the provisions of a collective bargaining agreement or merely extend recall rights for a period. Some employers may find the ordinance to be beneficial—and not a hindrance—to their operations.
The ordinance contains an express sunset provision, which provides that it will “continue in effect until one (1) year after the termination of both the peacetime emergency declared by the Governor … due to the COVID-19 pandemic and the Local Public Health Emergency declared by the Mayor … at which time it shall automatically terminate unless the City Council takes action to extend it.”.
The ordinance introduces into the general hospitality industry a requirement that is common in collective bargaining agreements. In this regard, it continues a trend, in Minneapolis and nationally, to legislate collective bargaining agreements for a class of employers, both unionized and nonunionized. As the economy begins to ramp up and employers seek workers in what is already a tight labor pool, the ordinance imposes additional obligations and delays in hiring that may hamper those efforts. In a unionized setting, the employer may be aided by a union that maintains contact with laid-off employees, and collective bargaining agreements in these industries may have different conditions and requirements for the recall of employees. In the end, the ordinance may have little effect as many businesses already have reached out to their laid-off employees and brought back those who can be found or who desire to return to their former employers.
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 and podcast programs.