The state labor commissioner announced $3.3 million in fines Thursday against an upscale resort in Rancho Palos Verdes for failing to offer jobs to employees who were laid off during the COVID-19 pandemic once the hotel reopened.
The 53 employees of Terranea Resort included housekeepers, banquet servers and bartenders, junior sous chefs and massage therapists.
“These workers invested years of service at Terranea and through no fault of their own, lost their jobs due to the pandemic,” Labor Commissioner Lilia García-Brower said in a statement. “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.”
Terranea Resort released the following statement:
“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 present dispute has nothing to do with Terranea’s good-faith, seniority-based approach to recalling its associates, and everything to do with ambiguous and poorly-defined language in SB93. In fact, of the 52 employees referenced in the citation, only four have not been recalled. The remainder are either currently working at the resort or were offered a job. We demonstrate our care and concern for our associates through our deeds, not just words. That more than 85 percent of our pre-pandemic associates returned to Terranea speaks volumes about our positive, employee-centric culture.”
The labor commissioner’s office said it opened an investigation in July 2021 after receiving reports of violation from Unite Here Local 11 on behalf of 14 laid-off workers. The workers claimed they were not offered an opportunity to return to their jobs based on seniority when the hotel increased business operations in 2021.
The investigation included interviews with former and current workers, depositions from Terranea’s personnel managers and an audit of payroll records, according to the commissioner’s office.
The investigation determined that DH Long Point Management LLC — doing business as Terranea Resort — had violated the Right to Recall law and cited the hotel $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 law entitles each worker whose rights are violated liquidated damages of $500 per day until the violation is resolved and civil penalties against the employer of $100 for each employee whose rights are violated. Any employee suffering unlawful retaliation for asserting recall rights may also be awarded back pay, front pay benefits and reinstatement.
