On June 23, the San Francisco Board of Supervisors voted to approve “right to reemployment” legislation that requires large employers to first offer laid-off workers their old jobs back before offering employment to new applicants (“Ordinance”). It will become effective immediately upon Mayor London Breed’s signature and will expire upon the 61st day following enactment unless extended.

Advocates of the Ordinance argued the requirement is necessary to ensure employers don’t use the pandemic as an opportunity to simply replace old workers with new employees who are younger and less expensive. Organizations lobbying against the Ordinance argued that it is overly burdensome; violates core constitutional principles; runs counter to several federal and state laws; and is extremely vulnerable to abuse. Similar legislation has surfaced in Los Angeles County as well. More on that to come.

Covered Employers

“Covered employers” are defined as for-profit and non-profit employers that directly or indirectly own or operate a business in the City or County of San Francisco and employ, or have employed, 100 or more employees on or after February 25, 2020.

Eligible Workers

“Eligible Workers” are those who were employed for at least 90 days in the preceding calendar year and separated from their employment due to a covered layoff. (Note that the Ordinance does not apply to workers covered by a bona fide collective bargaining agreement to the extent that the requirements of the Ordinance are expressly waived in the collective bargaining agreement in clear and unambiguous terms.)

Covered Layoffs

Not all layoffs are subject to this new obligation. A covered layoff is any separation of 10 or more employees in any 30-day period starting from February 25, 2020 until the expiration of the Ordinance. Importantly, the layoff must have been caused by (1) the employer’s lack of funds and/or (2)  the lack of work for its employees due to the COVID-19 Public Health Emergency and any Shelter-in-Place Order.

Employer Obligations Under the Ordinance

  1. Requirement to Make Offers of Reemployment to the Same or “Substantially Similar” Positions

Employers seeking to hire for positions formerly held by an eligible worker must first offer the position back to the eligible worker before offering the position to another person. Likewise, employers seeking to hire for any positions that are “substantially similar” to an eligible worker’s former position to be held in San Francisco must first offer that position to the eligible worker before offering the position to others.

If there is more than one eligible worker with the same classification, employers must make offers of reemployment based on seniority, which is determined by the eligible workers’ earliest date of hire.

  1. Written Notice of Layoff and Right to Reemployment to Eligible Workers

Employers implementing layoffs must provide each eligible worker with written notice, in a language the worker understands, either at the time of or before the layoff. If the layoff has already occurred, employers must provide the notice to each eligible worker within 30 days of the effective date of the Ordinance.

The written notice must include:

  • A notice of the layoff and the effective date;
  • A summary of the right to reemployment under this Ordinance; and
  • The telephone number for a hotline to be operated by the Office of Economic and Workforce Development (OEWD).
  1. Written Notice to the City

Employers must also provide written notice of the layoff to the OEWD within 30 days of the date it initiates the layoff. If an employer does not anticipate or foresee that there will be a layoff, it must provide written notice within seven days of the layoff date of the 10th affected eligible worker in 30 days.

The written notice must include:

  • The total number of employees located in San Francisco affected by the layoff;
  • The job classifications for each affected eligible worker;
  • The original hire date for each affected eligible worker; and
  • The date of separation for each affected eligible worker.

Employers must also notify the OWED in writing of all offers of reemployment, including all acceptances and rejections.

  1. Retention of Records

For at least two years, employers must retain the following records for each eligible worker:

  • Full legal name;
  • Job classification at the time of separation;
  • Date of hire;
  • Last known address of residence;
  • Last known email address;
  • Last known telephone number; and
  • Copy of the written notice regarding the layoff.

Penalties for Noncompliance

Eligible workers may bring an action in the Superior Court of the State of California against an employer for violating this emergency ordinance, and may be awarded the following relief:

  • Hiring and reinstatement rights;
  • Back pay for each day of the violation and front pay for each day during which the violation will continue;
  • The value of the benefits the eligible worker would have received under the employer’s benefit plan had the violation not occurred;
  • Reasonable attorneys’ fees and costs.

The Ordinance also does not limit an eligible worker’s other rights and remedies, including the right to bring claims for wrongful termination and unlawful discrimination.

Exceptions

Under the Ordinance, employers may withhold offers of reemployment for three reasons:

  1. Misconduct. Employers are not required to offer reemployment if, based on information learned subsequent to the layoff, the employer learns that the eligible worker engaged in any act of dishonesty, violation of law, violation of policy or rule of the employer or other misconduct during their employment.
  2. Severance Agreement. Employers are not required to offer reemployment to workers who separated as part of a layoff between February 25, 2020 and the effective date of the Ordinance and who executed a severance agreement that included a general release of claims against the employer and adequate consideration.
  3. Rehiring. Employers are not required to offer reemployment to workers who separated as part of a layoff between February 25, 2020 and the effective date of the Ordinance so long as, prior to the effective date of the Ordnance, the employer had hired another person.

Next Steps

The Ordinance has been subject to a large amount of criticism by the business community and will likely be challenged. Please contact your Baker McKenzie employment lawyer with questions.