As the September 30 deadline to act on bills drew to a close, Governor Newsom vetoed the remaining CalChamber Job Killer. AB 3216 (Kalra) would have established a “right to recall” requirement for certain hotels, event centers, airport hospitality operations, and building services that applied to all employees laid off during any state of emergency, not just COVID-19. Those entities would have been required to hire employees back by seniority to any job for which the employee could be qualified, eliminating crucial flexibility these vulnerable industries need to reopen in the midst of the COVID-19 pandemic. The bill also applied to any business that “contracted, leased, or sublet premises connected to or operated in conjunction with” a hotel or event center’s purpose. For example, a small gift shop that rents space in a nearby hotel or event center would have fallen within the scope of the bill.
The bill was strongly opposed by the affected industries, most notably hotels, which are concerned about their ability to reopen. Those businesses would be required to hire back employees based on seniority without being allowed to take those employees’ work performance or skillset into account.
Most concerning was the bill’s vague language about requiring employers to offer positions to employees that either held the same or similar position at the time of separation or “can be qualified” for the position. A plain reading of that provision appeared to require the employer to offer almost any position to employees by order of seniority as virtually any employee “can be qualified” for a given position. For example, a restaurant in a hotel that is trying to reopen would be required to first offer an open server position to its most senior employee, regardless of whether that person has any serving experience and regardless of whether there are any laid-off servers who are ready and able to reassume their positions. The restaurant would need to spend time and money training senior employees for open positions that could be filled by its other laid-off employees who already have the required skillset. These businesses have suffered catastrophic losses as a result of COVID-19 and cannot afford to unnecessarily expend time and money in trying to reopen.
Governor Newsom recognized the hospitality industry’s struggle in vetoing the bill, stating that the industry has been “hit hard by the economic impacts of the pandemic” and that AB 3216 would have placed “too onerous a burden on employers navigating these tough challenges.”
Further, as the Governor pointed out in his veto message, the bill’s requirements would have applied during any “state of emergency,” even if the lay-off was unrelated to the state of emergency. States of emergency often continue for years without being terminated, long past the time of the pressing emergency, and can vary county by county. The Governor also expressed concern for employees’ right to privacy because the bill would have required employers that hire an individual other than a laid-off employee to provide the name of that individual and all reasons in support of the decision to the laid-off employees.
Although AB 3216 was vetoed by Governor Newsom, employers should be aware that several California cities including Pasadena, Oakland, San Francisco, and Los Angeles have enacted similar local ordinances. Employers are encouraged to consult legal counsel about how those ordinances affect their hiring practices and ability to reopen.