LOS ANGELES SECURITY COMPANIES WILL BE SUBJECT TO NEW RIGHT OF RECALL AND WORKER RETENTION ORDINANCES

Jaimee K. Wellerstein, Esq. & Annette M. Barber, Esq., Bradley & Gmelich LLP, CALSAGA Legal Advisor

After much discussion and several modifications, on April 29, 2020, the Los Angeles City Council voted to adopt two controversial new Ordinances aimed at regulating the order of rehiring laid-off employees due to the COVID-19 pandemic and requiring retention of existing workers for up to 6 months in the event of ownership transfers in Los Angeles. The Mayor is expected to approve both. [Although these only apply to the City of Los Angeles, we suspect this will grow into a statewide trend.]

The Ordinances will apply to all security companies with 25 or more employees who provide security services to commercial properties.  It also applies to all businesses in the hospitality sectors (includes hotels, event centers and sports venues), property management services, and airport services. It includes those contractors and subcontractors with 25 or more employees who provide janitorial, maintenance and security services to those sectors, as well.

The Ordinances provide a worker the right to bring a private cause of action against an Employer for violating either Ordinance after providing the Employer with an opportunity to cure the alleged violation. Workers can be awarded reinstatement rights, front and back pay, benefits they would have received, attorneys’ fees and costs, and punitive damages for violation of the Right of Recall Ordinance only. The Ordinances are set to be reviewed again on March 1, 2022.

Right of Recall Ordinance

The Right of Recall Ordinance would require Los Angeles businesses that earned gross receipts in excess of $5,000,000 in 2019 and that laid off non-supervisory employees with six months or more of service for non-disciplinary reasons on or after March 4, 2020, to notify the employees (in writing) of any job openings for which they are qualified, and to offer open positions in order of seniority.

Being qualified is defined as holding the same or similar position at the same site of employment at the time of separation; or the laid-off worker can become qualified with the same training that would be provided to a new hire for that position. If more than one laid-off worker is qualified, the employer would have to offer the position to the worker with the most seniority at the employment site. The laid-off worker then has five (5) business days to respond to the offer.

The Ordinance also creates a rebuttal presumption that all layoffs and terminations occurring on or after March 4, 2020 were for non-disciplinary reasons.

 

Worker Retention Ordinance

The Worker Retention Ordinance would apply to businesses that have or will change ownership or control from March 1, 2020 through March 1, 2022, requiring them to provide seniority preference to certain workers if there is a change in business ownership within two years of the pandemic emergency declaration.

Under this Ordinance, within 15 business days following the change in control, the “Incumbent Business Employer” would be required to post written notice advising workers of the change in control in a conspicuous place. The notice must remain posted for six (6) months after the “Successor Business Employer” takes over.

A “Worker” is covered under the Ordinance if:

• they worked for the Incumbent Business Employer for at least six (6) months prior to the change in ownership;
• their primary place of employment is a covered business subject to a change in control;
• they are employed or contracted to perform work functions directly by the Incumbent Employer Business or by one with whom it contracts; and
• they worked for the Incumbent Employer Business on or after March 1, 2020 and before the execution of the transfer document.

The Successor Business Employer shall be required to hire covered workers of the Incumbent Business Employer for six (6) months after transfer of the business, and make a written offer of employment to each.  The offer must be kept open for ten business days.  If the Successor Business Employer requires fewer workers than the Incumbent Business Employer, workers must be retained by seniority within job classifications. Each worker hired must be retained for no fewer than 90 days, but can be discharged for cause. At the end of the 90 day period, the worker must be given a written performance evaluation for a permanent position.

Lessons for Employers:  If your business operates in the City of Los Angeles and you are restarting your business after layoffs, be prepared to recall laid-off workers by seniority. Also, if you assume ownership of a business in the next two years, be prepared to offer employment to the workers from the incumbent business for at least 90 days, keeping seniority in mind.

Need assistance with managing your workforce during COVID-19?  Contact the attorneys at Bradley & Gmelich LLP.

 

Jaimee K. Wellerstein is a Partner at Bradley & Gmelich LLP, and the Head of the firm’s Employment Department. Jaimee concentrates her practice in representing employers in all aspects of employment law, including defense of wage and hour class actions, PAGA claims, discrimination, retaliation, harassment, wrongful discharge, misclassification, and other employment related lawsuits. She also provides employment counseling and training in all of these areas.

Jaimee routinely represents employers in federal and state courts and in arbitration proceedings throughout the state, as well as at administrative proceedings before the Equal Employment Opportunity Commission, the California Department of Labor Standards Enforcement, the United States Department of Labor, and other federal and state agencies. Jaimee assists as a Legal Advisor to CALSAGA, and is a member of ASIS International. She is rated AV-Preeminent by Martindale Hubbell, the highest peer rating available. jwellerstein@bglawyers.com / 818-243-5200.

 

 

 

Annette M. Barber is Special Counsel on Bradley & Gmelich LLP’s Employment Team.  She represents clients providing employment advice and counsel in all aspects of hiring, performance management, training, compensation, and termination. Annette spent 17 years working with a global security company of 100,000 U.S. employees as an employment law attorney and then as Corporate Vice President directing HR Compliance nationwide for all 50 states, Puerto Rico and Guam.

Annette drafts and revises policies, handbooks, and extensive training materials for the firm’s clients. She provides workplace trainings, as well as workplace investigations. She is a member of the Association of Workplace Investigators, numerous bar associations and employment law sections.  abarber@bglawyers.com / 818-243-5200.

 

 

Bradley & Gmelich LLP is 25-attorney AV-Preeminent rated law firm who, for the past 20 years, has represented business clients in all matters of civil litigation, business law, and employment matters. Its Employment Department represent employers in all aspects of employment law, including defense of wage and hour class actions, PAGA claims, discrimination, retaliation, harassment, wrongful discharge, misclassification, and other employment related lawsuits. It also provides employment counseling and training in all of these areas. Visit www.bglawyers.com.