Nov 16

Santa Monica’s Hotel Worker Living Wage Refuses to Die

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Santa Monica’s 2,000 hotel workers haven’t always gotten a fair shake. In 2001, many hotel workers in the city were earning $6.25 per hour even as certain hotels were charging guests up to $1,500 a night for a room with an ocean view. For that reason, supporters of a living wage put up a ballot initiative to require luxury beach hotels grossing more than $5 million per year to pay their employees a modest  living wage of $10.50 per hour with health benefits or $12.25 without them. In November 2002, Santa Monica voters rejected Measure JJ by 745 votes. Fortunately, Santa Monica hotel workers can now make more than $10.50 per hour – without Measure JJ.

Santa Monica Hotel Development Agreements

For years, the City of Santa Monica has backdoored the living wage through its Land Use and Circulation Elements (LUCE) Ordinance. Under LUCE, any developer who wants to build a project over 32 feet high to negotiate a development agreement with the City. LUCE enables the City to bargain for a “living wage” provision in return for a variance from the height and other zoning restrictions. Because most hotels are over 32 feet high, most hotel developers must enter into development agreements with the City. In effect, LUCE enables the City to resurrect Measure JJ on a case-by-case basis.

Generally, hotel developers have agreed to a “living wage” provision. For example, the development agreement between the City, Palmetto Hospitality of Santa Monica, and 501 Colorado Investors for the development of the Hampton Inn & Suites at 501 Colorado Avenue requires the Hampton to pay $12.85 plus health benefits to most hotel workers who spend most of their working hours on-premises. Every July 1, the City will adjust the living wage by an amount equal to the consumer price index for the previous year. Certain employees of third-party contractors, including valets, bicycle attendants, and security guards, are exempt from the “living wage” provision.

But all the recent hype about the L.A. City Council’s adoption of a $15-per-hour super-minimum wage (which doesn’t actually take effect until 2020, when $15 per hour will be the equivalent of $9.75 in today’s dollars, 75 cents higher than the current statewide minimum wage) now has the Santa Monica City Council feeling upstaged. Consequently, the Santa Monica City Council commissioned a “study” in June 2015 – the first (and probably last) step towards digging up Measure JJ. (The City Council has tabled discussion of a new “living wage” ordinance until December 2015.) The revival of the citywide “living wage” ordinance would give the City even more leverage in negotiating future hotel development agreements.

Santa Monica’s Anti-Retaliation Ordinance

Not all development agreements will have a “living wage” provision. Some hotel workers will continue to earn $9.00 per hour. Fortunately, Santa Monica’s anti-retaliation ordinance prohibits anyone from discharging, demoting, or otherwise “penalizing” an employee for “supporting or opposing legislation governing wages or employee benefits.”1 But the ordinance doesn’t describe what constitutes “supporting or opposing legislation.” Conceivably, the ordinance might protect leafleting on the Third Street Promenade, blogging about a “living wage” proposal, or even picketing in front of a hotel owner’s home.2

The anti-retaliation ordinance permits “any person” to bring a civil action for a violation. In any civil action, a rebuttable presumption of retaliation arises where the plaintiff establishes that: (1) he or the subject worker was an employee of the defendant; (2) he or the subject worker advocated for or against minimum wages or benefits; and (3) the defendant terminated, demoted, or otherwise penalized him or the subject worker within 60 days after such advocacy. The defendant then has the burden of proving that he had a legitimate, non-retaliatory reason for the action.3 (Presumably, the burden returns to the plaintiff to prove the defendant’s reason was pretextual.)

Generous remedies are available to an employee for a violation of the anti-retaliation ordinance. The ordinance permits “any person” obtain an injunction compelling an employer to reinstate an employee; furnish back pay, front pay, and/or lost benefits; or “take any other action necessary to make an aggrieved employee whole.”4 The plaintiff can obtain the injunction by showing the employer violated or proposed to violate the ordinance.5 Significantly, a plaintiff can obtain an injunction to compel the payment of money. That’s an oxymoronic remedy, however, as an injunction is only supposed to be available when money would be an inadequate remedy.6

The anti-retaliation ordinance also allows “any person” to recover an enormous award of monetary damages for aiding and abetting.7 Specifically, any person who violates or “aids or incites” another person to violate the ordinance is liable for “each and every” such offense for actual damages, statutory damages of $500 per occurrence, and for such attorney’s fees and costs as the court “may …determine[]…in addition thereto.” (The ordinance isn’t clear about whether the inciter can be an employee. In retaliation cases generally, only a non-employee can be liable for aiding and abetting.8 Moreover, the court may award punitive damages in an appropriate case.

  1. SMMC §4.64.010. 

  2. However, any picketing activity against a Santa Monica residence has to be 50 feet from the residence or on the sidewalk on the opposite side of the street. SMMC §4.08.790. 

  3. SMMC §4.64.030. 

  4. SMMC §4.64.020(c). 

  5. SMMC §4.64.020(c). 

  6. Code Civ. Proc. §526(a)(4). 

  7. SMMC §4.64.020(d). 

  8. Reno v. Baird, 18 Cal.4th 640, 660 (1998). 

Ben Rothman, Esq.

Ben Rothman is a Los Angeles-based attorney practicing in the areas of personal injury, employment, and workers' compensation on a "no recovery, no fee" basis. Call him at (424) 465-2948 for a free, no-obligation consultation.