Settlement reached with California Labor Commissioner in first legal action under state “return-to-work” law for workers laid off during the pandemic

Rancho Palos Verdes, CA-  The California Labor Commissioner’s Office has reached a $1.52 million settlement with the Terranea Resort to resolve a citation the agency issued in March to the ritzy resort alleging that it violated state law by failing to timely recall laid-off workers to their former positions.  The company also agreed to recall several veteran employees.

The settlement resolves the first case ever under California’s recently-enacted return-to-work law.  Signed into law last year, SB-93 requires hotels, event centers, and other hospitality businesses to offer employees whom they laid off due the COVID-19 downturn in tourism an opportunity to return to work in open positions for which they are qualified in order of seniority. The statute provides job protections to some 700,000 housekeepers, cooks, waiters, and other laid off workers.

David Gomez Martinez, who was laid off by the Terranea after working 10 years at the resort, said: “Being laid off during the pandemic has been devastating for me and my family. We’ve struggled to pay our bills and keep food on the table. I am really glad to know I will be getting my job back. Sad it took the state stepping in to make sure Terranea followed the law.”

The state agency, which is led by California’s Labor Commissioner Lilia Garcia-Brower, conducted an investigation in response to complaints from workers alleging violations of the recall law. More than a dozen Terranea workers–including servers, cooks, and room attendants–filed complaints.

The Labor Commissioner’s investigation found that the resort failed to recall, or to timely recall, 57 former employees.  Each of these 57 workers will receive a share of the $1.52 million settlement, with the average payout approximately $26,500 per worker.  Under the statute, damages are calculated based on the number of days a worker waits to be offered open positions for which they are qualified. The company will also pay $5,300 in civil penalties to the State of California.

Terranea workers were at the forefront of the campaign to enact SB-93. The company terminated most of its employees without making a binding commitment to rehire them and cut off their healthcare at the beginning of the pandemic.

Kurt Petersen, co-president of UNITE HERE Local 11, the hospitality workers’ union that fought for the law and helped the workers file complaints, said: “This is a tremendous victory for the Terranea’s workers, who fought to win and then to enforce their right to return to their jobs and provide for their families.  This massive settlement sends a powerful message to the entire hospitality industry that these worker protections have real teeth and that companies may violate them at their peril.  We commend the Labor Commissioner’s office for conducting such a thorough and effective investigation of the workers’ complaints.”

“My legislative colleagues and I fought to pass a law where hardworking long time employees who were laid off during the pandemic could return to their jobs,” said State Senator Maria Elena Durazo. “This outcome shows what can happen when workers, like those at the Terranea Resort, stand up for their rights and we in government listen and act.  I congratulate the California Labor Commissioner and her staff for their tremendous work to enforce this critical law.”