California Resort fined $3.3 million, accused of violating ‘right of recall’ law


A luxury hotel in California has been fined $3.3 million, accused of ignoring a law passed during the pandemic requiring establishments to rehire fired service employees.

The California labor commissioner’s office said in a news release on Thursday that the Terranea Resort in the Los Angeles suburb of Rancho Palos Verdes had been fined millions following an investigation into the resort’s hiring practices.

The investigation into the 102-acre, 582-room resort began in July 2021 after 14 reports alleged the luxury resort violated the recently signed “right of recall” law. The legislation required that hotels reopening after the COVID-19 shutdown first offer jobs to former employees who had been made redundant.

Each worker who is not offered a rehire is entitled to $500 a day until their employer offers them their previous job, in accordance with the law. An additional penalty of $100 against the employer is also imposed each day.

The law was originally passed to prevent hotels and other service industries from discriminating against laid-off employees.

Terranea Resort reopened in June 2020 after being closed for the previous three months. The investigation report alleges that station management failed to re-offer jobs to at least 53 employees who previously worked at the property.

The Terranea Resort in California has been fined $3.3 million, accused of violating a COVID-19 labor law. The legislation required employers to first offer jobs to laid-off employees after reopening in the wake of the pandemic. Here we can see the Terranea Resort.
Ben Horton/Getty

Those former employees included housekeepers, waiters, bartenders and other service workers, the labor commissioner’s office said. These workers would be among those who would receive the $3.3 million, which the bureau said would be distributed primarily among those who were not offered their jobs.

The 14 workers involved in the original complaint would receive $1.3 million, or about $95,750, according to the official citation obtained by the Los Angeles Times.

“These workers have invested years of service with Terranea and, through no fault of their own, have lost their jobs due to the pandemic,” Labor Commissioner Lilia García-Brower said in the press release. “The law makes it clear that workers in the hospitality and service sectors should be given priority to return to the same or similar positions when their former employer reopens.”

In a statement, however, Terranea Resort told the Times, “We strongly disagree with the Labor Commissioner’s citation, which is not a finding of fact. We are exploring all of our legal options.”

The resort also described the law on the right of recall as “ambiguous and ill-defined language”, adding that 85% of staff who worked at the hotel before the pandemic shutdown had returned.

“We demonstrate our care and concern for our associates through our actions, not just words,” the resort said.

Terranea Resort is the first company to be accused of violating right of recall legislation. The law runs until the end of 2024 and, beyond hotels, also applies to airports and event centers.

This isn’t the first legal battle the station has faced.

In 2019, the hotel paid a $2.1 million settlement to workers who claimed they weren’t being paid for the time it took to be driven to and from the resort. That same year, a former cook was also paid $35,000 after being fired following unionization attempts.

Newsweek contacted Terranea Resort for comment.


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