The September 11, 2001 terrorist attacks caused a wave of fear that led to an economic downturn and mass layoffs in the hospitality industry. The wave rippled all the way to Santa Monica as “terror alerts” and talk of future attacks gripped the country. In the wake of the 9/11 attacks, the Santa Monica City Council passed an ordinance giving “qualified laid-off employees” of high-end businesses in the city’s Coastal Zone and Extended Downtown Core the right of “recall” to (i.e., reinstatement in) their former positions of employment. Fourteen years later, the “recall” ordinance remains in effect, raising questions about whether it can still protect the jobs of Santa Monica’s qualified laid-off employees.
I. Who Does the “Recall” Ordinance Cover?
The ordinance applies in only two of the city’s districts: the Coastal Zone and the Extended Downtown Core. The ordinance defines the Coastal Zone’s western boundary as the Pacific Ocean and the eastern boundary as (1) Lincoln Blvd. south of Pico Blvd. to the city’s southern border and (2) Fourth St. north of Pico to the city’s northern border.1 (Le Meridien Delfina, which is on Pico between Fourth and Fifth, is thus outside the Coastal Zone.) The Extended Downtown Core is easier to describe: Ocean Ave. on the west, Wilshire Blvd. on the north, Fifth St. on the east and Colorado Blvd. on the south. In other words, just about any pleasant Santa Monica geographic location other than Montana Ave. is subject to the ordinance.
The express purpose of the ordinance was to protect “low-income Santa Monica workers” in “visitor-serving industries” after the post-9/11 drop in tourism.2 But the ordinance applies to all “employers” doing business at a location in the Coastal Zone or Extended Downtown Core with “gross receipts over $5,000,000 in the year 2000 for that location.”3 (Evidently, the City Council set the revenue threshold at $5 million to avoid tangling with businesses that were using cash accounting to understate income.) Thus, the ordinance not only covers swanky hotels, but possibly the Barnes & Noble, as the store is an “employer” doing business in the Extended Downtown Core (Third and Wilshire) and grossed $5 million per year at that location in 2000.
For the ordinance to cover an employee of a covered employer, both of the following must be true: (1) he was on the employer’s payroll for six months or more (including leaves of absence and vacation) and (2) his most recent separation from active service from that employer occurred “after” September 11, 2001, and was “due to” (a) lack of business, (b) a reduction in force, or (c) other, economic, non-disciplinary reason. The ordinance excludes managers, supervisors, confidential employees and those whose jobs require them to possess an occupational license – e.g., attorney, cosmetologists, plumbers, etc. Thus, the ordinance mostly (though not exclusively) applies to hotel workers and servers.
II. The Right of “Qualified Laid-Off Employees” to “Recall”
The right of “recall” extends only to a laid-off employee who is “qualified” for a position with a covered employer. The ordinance describes an employee as “qualified” for a position if he falls into one of two categories: (1) he held the “same or similar position” at the same site of employment at the time of his most recent separation from active service with the employer; or (2) he is or can become qualified for the position with the same training that the employer would provide to a new employee who the employer has hired for that position. The ordinance doesn’t elaborate on when a position is “similar” to a position that a laid-off employee formerly held or when a laid-off employee “is or can become qualified” for a different position.
The ordinance requires a covered employer to make a qualified laid-off employee a written offer of employment for all positions that are or will become available and for which he is qualified.4 The employer must mail the offer to the employee’s last-known address.5 The employer must offer positions to qualified laid-off employees in an order of preference corresponding to categories (1) and (2).6 If more than one employee is entitled to preference for a position, the employer must offer the position to the employee with the greatest length of service with the employer at the employment site.7 The employee has at least 10 days (presumably not just business days) to accept or decline the offer.8
The “recall” ordinance authorizes “any person” to sue “any person who violates or aids another person to violate” the ordinance.9 For “each and every” offense, the defendant is liable for the plaintiff’s actual damages or $500, whichever is greater, together with the plaintiff’s attorneys’ fees and costs.10 The court “may also” award punitive damages against: (1) an individual or corporation whose officer, director, or “managing agent” is “personally guilty” of malice, fraud, or oppression; or (2) a corporation whose officer, director, or “managing agent” either (a) knew a particular employee was “unfit” yet employed him in conscious disregard of others’ rights or (b) authorized or ratified his conduct.11
III. Is the “Recall” Ordinance Still in Effect?
The status of the “recall” ordinance is uncertain. On the one hand, the ordinance doesn’t expressly exclude an employee who started working after 9/11 or who did not lose his job “due to” the 9/11 attacks. The plain language of the ordinance merely provides that a qualified laid-off employee’s most recent separation from active service must’ve occurred “after” September 11, 2001 and been “due to” an economic and other non-disciplinary reason. Moreover, the ordinance doesn’t contain a sunset clause. Therefore, the ordinance appears to live on, even though the original emergency that gave rise to it – mass layoffs after the post-9/11 drop in tourism – has long since ended.
On the other hand, the ordinance only covers employers doing business at a location in the Coastal Zone or Extended Downtown Core that grossed over $5 million “in the year 2000” for that location. The ordinance thus leaves out employees of all the hotels that didn’t open until 2001 or later – and that is a lot of hotels. In reality, the ordinance wouldn’t apply to those hotels anyway because none of them (with the exception of Le Meridien) grosses more than $5 million per year. Moreover, hotels can, and increasingly do, “opt out” of the ordinance by entering collective bargaining agreements and getting the unions to waive the ordinance – something unions are all to happy to do in return for the power to deduct union dues from their members’ paychecks.12