Terranea Resort to pay $3.3 million for failing to rehire laid-off workers

State regulators have fined the upscale Terranea Resort nearly $3.3 million for failing to offer jobs to 53 workers who were laid off during the pandemic downturn once business picked up again in 2021.

The California Labor Commissioner’s Office issued the citation Wednesday, March 2, saying the Rancho Palos Verdes business violated Senate Bill 93, the state’s “right to recall” law.

Signed into law last year, the bill requires hotels, event centers and other hospitality businesses to offer employees who were laid off during the pandemic the opportunity to return to positions for which they are qualified in order of seniority. To be eligible, an employee must have worked for their employer for six months or more in the 12 months preceding Jan. 1, 2020.

“The law makes it clear that workers in the hospitality and services industries must be prioritized to return to the same or similar positions when their former employer reopens for business,” Labor Commissioner Lilia García-Brower said in a statement.

In a statement issued Thursday, Terranea said all but four of the 53 workers have been re-hired and those who weren’t were still offered jobs. The resort didn’t say how quickly employees were called back once business improved, however.

“We strongly disagree with the labor commissioner’s citation, which is not a finding of fact,” Terranea said. “We are exploring all of our legal options.”

The employees claim they weren’t offered the opportunity to return to their jobs based on seniority when the hotel saw increased business in 2021. The investigation included interviews with former and current workers, depositions from Terranea’s human resources managers and an audit of payroll records from April 16 to Dec. 31, 2021.

David Gomez Martinez said he was laid off by Terranea after working there for 10 years.

“Being laid off during the pandemic has been devastating for me and my family,” Martinez said in a statement. “We’ve struggled to pay our bills and keep food on the table.”

The Labor Commissioner’s Office launched its investigation in July 2021 after receiving reports of labor violations from Unite Here Local 11 on behalf of 14 laid-off workers.

Regulators ultimately cited DH Long Point Management LLC, which operates as Terranea Resort, $3,080,000 in liquidated damages, $5,300 in civil penalties and $208,582 in assessed interest for a total of $3,293,882.

The $5,300 in civil penalties includes $100 for each of the 53 workers whose rights were violated. They include housekeepers, banquet servers, bartenders, junior sous chefs and massage therapists.

The law entitles each worker whose rights are violated liquidated damages of $500 a day until the violation is cured and civil penalties against the employer of $100 for each employee whose rights are violated.

Employees who suffer retaliation for asserting recall rights may also be awarded back pay, front-pay benefits and reinstatement, officials said.

Terranea said the labor dispute has nothing to do with the resort’s “good-faith, seniority-based approach” to recalling its employees, and everything to do with ambiguous and poorly-defined language in SB 93.

“That more than 85% of our pre-pandemic associates returned to Terranea speaks volumes about our positive, employee-centric culture,” the resort said.

A Notice to Discontinue Labor Violations was also issued, which directs Terranea to offer positions to employees who should have been returned to work but still have not had that opportunity.

Kurt Petersen, co-president of Unite Here Local 11, said Terranea treated its veteran workers like they were disposable.

“This kind of behavior is not only immoral, but as the agency’s massive citation shows, it can also be illegal,” he said. “I commend the labor commissioner for conducting such a thorough investigation and showing that our worker-protection laws have real teeth.”

Source: Orange County Register