San Francisco Quietly Enacts “Right to Reemployment” Emergency Ordinance Without Mayor’s Signature

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Seyfarth Synopsis:  On June 23, 2020, the San Francisco Board of Supervisors passed an emergency “Right to Reemployment” Ordinance in response to layoffs due to the COVID-19 pandemic. The Mayor had ten days to take action on the Ordinance. Instead, the Mayor “returned unsigned” the Ordinance. Under the terms of the Ordinance, this means that the Ordinance has been automatically enacted and employers with more than 100 employees should comply with its requirements going forward for at least the next 60 days, through September 1, 2020.  

The Mayor Returns The Emergency Ordinance To The Board Unsigned, Automatically Enacting The Ordinance  

As previously reported here, on Tuesday, June 23, 2020, the San Francisco Board of Supervisors passed a temporary emergency ordinance that seeks to require businesses with more than 100 employees to offer reemployment to employees previously laid off due to the COVID-19 pandemic.

Under the language of the emergency Ordinance, the Mayor had ten days to take any action on the Ordinance. But the Ordinance also specified that “[e]nactment [of the Ordinance] occurs when . . .the Mayor returns the emergency ordinance unsigned or does not sign the emergency ordinance within ten days of receiving it.” The July 3, 2020 deadline for the Mayor to take any action came and went, without any announcement or fanfare from the City, the Mayor, any of the sponsoring Supervisors, or their respective Twitter accounts over the holiday weekend.

According to recent updates to the City’s legislative website, however, the Mayor “returned unsigned” the Ordinance on July 3, 2020.  As a result, the Ordinance has been enacted and is effective as of July 3, 2020.  Enactment triggers certain obligations for covered businesses to complete within thirty days (i.e., by August 2, 2020). This also means that the Ordinance will be effective for the 60 days after enactment, through September 1, 2020, unless the Board votes to reenact the Ordinance.

The Details Of The Newly-Enacted Ordinance

As we first reported when the Board of Supervisors passed the Right to Reemployment Ordinance, its requirements expand beyond rehiring laid off employees. It also places retroactive notice, reporting, and record retention obligations on covered businesses who engaged in qualifying layoffs since February 25, 2020, with significant remedies available against businesses who do not comply with its terms. Notably, employers have only 30 days—until August 2, 2020—to comply with the retroactive requirements.

Covered Businesses.  The Ordinance applies to any for-profit or nonprofit business with operations in San Francisco on or after February 25, 2020. The Ordinance also exempts a number of healthcare related businesses including hospitals, pharmaceutical and biotechnology companies, and related or ancillary healthcare service. 

Qualifying Layoff.  The Ordinance defines a “Layoff” as a separation of 10 or more employees during a 30-day period, commencing on or after February 25, 2020, including a business ceasing or closing operations. The layoff must have been caused by a lack of funds or lack of available work due to a state or San Francisco COVID-19 public health emergency declaration and any San Francisco shelter-in-place order.

Layoff Notice Requirements.  The Ordinance places two new reporting requirements on covered businesses conducting layoffs going forward while the Ordinance is in effect: 

1. Covered businesses must provide notice to all “Eligible Workers” (defined in the order as employees subject to layoff who has been employed for at least 90 days) at or before the time of the layoff. The notice must be in a language the employee understands and include (i) the layoff effective date; (ii) a summary of the rehire rights created by the ordinance; and (iii) San Francisco’s Office of Economic and Workforce Development (OEWD) hotline number for the Ordinance.
2. Covered businesses must provide what amounts to a more detailed WARN notice to the OEWD within 30 days of the layoff. The notice must include (i) the total number San Francisco-based employees affected by the layoff, (ii) the employees’ job classifications; (iii) the employees’ original hire date; and (iv) the employees’ dates of separation.

30 Days to Comply with Retroactive Notice Requirement.  For those covered businesses that conducted a qualifying layoff between February 25, 2020 and July 3, 2020, they must provide notice to previously laid off Eligible Workers by August 2, 2020 (i.e., 30 days after enactment). This amounts to a retroactive notice requirement going back to the beginning of the COVID-19 pandemic, even if the employer already provided notice at the time of layoff under applicable WARN laws.

Records Retention Requirement.  The Ordinance also places an additional record retention requirement on covered businesses. Businesses who initiate a qualifying layoff must retain for at least two years records containing the laid off Eligible Worker’s (i) full legal name; (ii) job classification; (iii) date of hire; (iv) last known address; (v) email address; and (vi) phone number; as well as (vii) a copy of the layoff notice.

Rehiring.  For those covered businesses who decide to hire in San Francisco post-layoff while the Ordinance is now in effect, the Ordinance requires them to offer positions first to laid off Eligible Workers when:

• Businesses start to rehire for positions formerly held by a laid off Eligible Worker; or
• Employers seek to hire employees for “substantially similar positions” to those held by laid off Eligible Worker.

The Ordinance provides a broad definition of “substantially similar.” It encompasses (i) jobs with comparable duties, pay, benefits, and working conditions; (ii) any position the laid off Eligible Worker held in the 12 months prior to the layoff; and (iii) any position for which the laid off Eligible Worker would be qualified. Additionally, if more than one laid off Eligible Worker is eligible for rehire, the Ordinance requires the businesses to rehire employees based on seniority.  

Covered businesses have limited circumstances in which they can refuse to rehire a laid off Eligible Worker. These include instances (i) where the business uncovers employee misconduct, (ii) when the employee signed a severance agreement prior to the effective date of the Ordinance, and (iii) if the employer hired a new employee for the position prior to the effective date of the Ordinance. The Ordinance also does not apply to employees covered by collective bargaining agreements, provided the CBA waives the requirements in the Ordinance in clear, unambiguous terms. 

Rehiring Offer.  Once covered businesses decide to offer reemployment to laid off Eligible Workers, the Ordinance requires businesses to provide these former employees notice of the offer by telephone and email. If the former employees do not respond to these communications, businesses must send the offer via certified mail or courier, giving the former employee at least two business days following delivery to accept the offer.

Rehiring Notice to OEWD.  After any covered business makes offers of reemployment to Eligible Workers while the Ordinance is effective, its work still is not complete. Next, it must notify the OEWD in writing of (i) all offers of reemployment; (ii) all acceptances from Eligible Workers; and (iii) all rejections from Eligible Workers.

Accommodations for Family Care Hardships.  When rehiring, the Ordinance also requires employers to reasonably accommodate rehires who are experiencing a “family care hardship.” A rehire has a family care hardship when unable to work due to the need to care for a child because the child’s school is closed, or any reason the employee could use San Francisco paid sick leave to care for someone. Reasonable accommodations may include, but are not limited to, modifying the hours to be worked, permitting telework, and modifying the rehire’s schedule.

Penalties.  The Ordinance provides employees with the right to file their own civil lawsuit in San Francisco Superior Court and seek reinstatement, economic damages (including back pay and front pay), and attorney’s fees.

While the Ordinance is temporary, covered businesses should not assume the Board will decline to reenact the Ordinance before it automatically expires on September 1, 2020. The burdens of the Ordinance are significant, so covered businesses should consider them carefully. In the meantime, Seyfarth remains ready to assist businesses complying with the new Ordinance and other COVID-19 related issues.