February 2, 2023

Opinion: Senate Bill 93 Allows Union Shakedown of California’s Hotel Industry

Terranea resort
The Terranea resort in Rancho Palos Verdes. Photo courtesy of the resort

California pays lip service to helping businesses recover from the pandemic. But deeds matter more than words.

A new $3.2 million proposed fine of Southern California’s Terranea resort — made by the State Labor Commissioner under hotel worker rehiring ordinance Senate Bill 93 — demonstrates that the state still cares more about its union cronies than it does about its job creators and the people they employ.

The state’s Department of Industrial Relations announced the fine in a boisterous statement to the press. “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,” said Labor Commissioner Lilia García-Brower.

In fact, the law is clear as mud. That ambiguity created by the state legislature is a landmine for well-meaning hotels whose interpretation of “same or similar” is different from state bureaucrats.

The Los Angeles Times and others breathlessly echoed the state’s SB 93 spin, despite the fact that the commissioner’s citation was not a finding of fact. The resort said in the press that it’s pursuing all legal options, and with good reason. A careful read of the news coverage demonstrates that the justification for the fine isn’t worth the paper it’s written on.

The state calculates the fine based on 53 employees it says were not rehired in accordance with California’s “Right to Recall” law. But the Times and others buried a crucial caveat in the story text: “The labor commissioner’s citation listed five workers…who have yet to be contacted about returning to their old jobs.”

Got that? Only five of the 53 workers have not been offered a job at the hotel. That means the others are either presently working there, or were offered the job and passed. Indeed, the resort said as much in press statements to the Orange County Register and others, and said it believed it was following the state’s ambiguously-worded law.

Put differently, the $3.2 million fine is not based on workers who didn’t get jobs — it’s based on workers who allegedly didn’t get their jobs in the right order, according to the byzantine text of a law that few understand.

It’s a classic California case of an invented “violation” where no one has actually been harmed. Trial lawyers have weaponized this complexity for years using the state’s Private Attorneys General Act

Labor unions are in on the scheme, too. The state noted that controversial hotel worker union Unite Here Local 11 was responsible for the complaints against Terranea — having waged an unsuccessful multi-year war to organize the property’s associates.

The union was also remarkably (some might say suspiciously) prescient about the Labor Commissioner’s press strategy. Union President Kurt Peterson tweeted a link to the Labor Commissioner’s press announcement several minutes before it was sent to the public. 

This kangaroo court — where the state partners with powerful interest groups to act as judge, jury, and executioner on targeted industries — might be acceptable in the old Soviet Union, but it’s a disgrace to see it in modern-day California. 

California can help its business recover from the pandemic by reducing the complexity of its laws, rather than inventing new ways to penalize businesses.  

Tom Manzo is president of the California Business and Industrial Alliance.

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