Law360 (October 20, 2020, 8:39 PM EDT) -- As millions of U.S. workers remain on unemployment rolls, California is once again serving as the proving ground for a novel type of employment law that may spread outside the Golden State: "right of recall" statutes, which make certain employers rehire laid-off workers when business resumes.
Major California cities including Los Angeles, Oakland and San Francisco have granted recall rights to workers in the hospitality industry and related fields in recent months, and labor unions are lobbying policymakers in Las Vegas, Massachusetts and other jurisdictions to provide laid-off workers a right to return to their jobs.
"The law is changing, and a lot of these [statutes] are being proposed or talked about," said September Rea, a principal in management-side employment firm Polsinelli PC's Los Angeles office.
Lawmakers in cities and states around the country have rolled out new protections for workers during the COVID-19 pandemic, such as new entitlements to sick time and leaves of absence, safety requirements, and presumptions that workers who contract the virus may collect workers' compensation while they're sidelined. A small handful of jurisdictions have adopted rights of recall, but this group could grow.
Los Angeles became the first municipality to provide recall rights when Mayor Eric Garcetti signed an ordinance in early May requiring certain businesses that let workers go during the pandemic to rehire them down the line. The Right of Recall Ordinance requires airports and airport employers, property managers, event center businesses, and hotels that laid off workers on or after March 4 to restore their jobs when business resumes, rather than tap new workers to fill their roles.
The California cities of Long Beach, San Diego, Oakland and San Francisco have since followed Los Angeles' lead. Their ordinances vary in scope, mechanics and duration, but in general, they require businesses in the hard-hit hospitality and entertainment sectors to bring back laid-off workers when the time comes.
"COVID-19 caused a lot of layoffs in that [hospitality] industry," said Bruce Sarchet, a Littler Mendelson PC attorney who represents employers in California employment policy talks. "I think the thinking behind these laws is 'we don't want business owners to take advantage of this' by picking and choosing, using subjective criteria, as to who's to be called back from layoffs."
Recall rights are a fixture of union contracts, which often include language requiring employers that lay off workers in rocky stretches to rehire them when business picks up. But these requirements are new to nonunion employers, and they're posing challenges for the businesses subject to them, management attorneys say.
Rea said she's observed "a lot of pushback" from businesses because these measures add red tape to something they're already doing. It makes business sense to rehire skilled veterans, so employers typically call on existing workers first when it's time to reopen, she said. Regulating this process — and empowering workers to sue employers if they botch it — further complicates an already complicated situation, she said.
"It's a lot more administrative paperwork … and I don't think it's going to necessarily benefit employees," she said. "I think it's going to cause businesses a little bit of hesitation about when to reopen."
These right to recall ordinances have so far been isolated to California, where state or city lawmakers often roll out first-of-their-kind worker protections that other progressive jurisdictions later adopt. Workers advocates outside the Golden State are already calling on lawmakers to adopt similar measures.
In August, a group of Las Vegas labor unions launched the Save Our Jobs Coalition to push the Clark County Commission — whose jurisdiction includes the gambling destination — to provide recall rights.
The pandemic has been especially tough on workers in Las Vegas, said Bethany Khan, communications director for Culinary Workers Union Local 226, an affiliate of the Unite Here hospitality workers union. Ninety-eight percent of the union's 60,000 members were furloughed when the state government shut down casinos at the height of the pandemic in March; seven months later, "maybe 50%" of the union's members are back to work, Khan said.
Most union workers in Las Vegas have recall rights for up to two years following their layoff, but many workers don't enjoy this protection. Their employers have not all been generous, Khan said.
This is the case at Station Casinos, where Local 226 represents workers but has not yet reached a first contract providing recall rights, Khan said. The company has recalled some workers, making them reapply and in some cases paying rehired workers less than they previously earned, she said.
"We don't think [this] is right," Khan said. "Workers should not be abandoned after working so many years as a loyal employee."
The coalition has staged a series of demonstrations outside the commission, and some members of the body have publicly backed the idea. The commission has not yet introduced a proposal, though, and the effort's primary supporter on the commission did not respond to requests for information about plans for a proposal.
Unite Here's Boston local is similarly pushing policymakers in Massachusetts and Providence, Rhode Island, to provide workers recall rights.
"Political leadership in both Massachusetts and Rhode Island did the right thing by shutting the state down," Unite Here Local 26 President Carlos Aramayo told Law360. Now, the union is in talks with lawmakers to make sure the largely nonwhite and immigrant workers who lost their jobs "get those jobs back when those jobs do come back," he said.
Talks are further along in Providence, where a city councilor introduced a proposal Thursday requiring hotels to rehire laid-off workers before rehiring other job candidates. In Massachusetts, recall rights are on the back burner while lawmakers deal with an acute budget crisis, but the union is optimistic about the plan gaining traction in the new year, Aramayo said.
Sarchet, the Littler attorney, said he's skeptical that recall ordinances will catch on more than they already have, pointing to California Gov. Gavin Newsom's recent veto of a statewide mandate.
In August, the California Legislature approved a proposal that would have required tourism, hospitality and certain other industries to alert laid-off workers to job openings and give them preference in hiring. Newsom shot down the plan this month, saying the bill places "too onerous a burden on employers navigating these tough challenges." These concerns could resonate with lawmakers outside of California, Sarchet said.
But these measures are not as daunting for businesses as their opponents make them out to be, Aramayo said. They don't raise labor costs or mandate that struggling businesses reopen positions; they only require that workers get back their old jobs if and when they're restored, he said. And the issues they address are widespread.
"There's no market in our industry that hasn't been deeply, deeply affected by the pandemic and the economic consequences of the pandemic," Aramayo said. "I fully expect that this question is going to be raised in many, many, many places."
--Editing by Aaron Pelc and Orlando Lorenzo.
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