Terranea Resort to pay $1.52 million to resolve hiring citation

State regulators have reached a $1.52 million settlement with Terranea Resort over a citation the agency issued in March, alleging the resort violated California law by failing to rehire laid off workers in a timely manner.

The California Labor Commissioner’s Office said the settlement resolves the first case ever under California’s recently-enacted return-to-work law. The company also agreed to recall several veteran employees.

Signed into law last year, Senate Bill 93 requires hotels, event centers and other hospitality businesses to offer employees who were laid off due the COVID-19 downturn in tourism an opportunity to return to work in open positions for which they are qualified in order of seniority.

The 57 former workers will each receive a share of the $1.52 million settlement, with an average payout of $26,500. (Photo by Chuck Bennett, Contributing Photographer)

David Gomez Martinez, who was laid after working at the Rancho Palos Verdes resort for 10 years, said his life hasn’t been easy.

“Being laid off during the pandemic has been devastating for me and my family,” Martinez said in a statement. “We’ve struggled to pay our bills and keep food on the table.”

The Labor Commissioner’s investigation was spurred by complaints from employees alleging violations of the recall law. More than a dozen Terranea workers — including servers, cooks and room attendants — filed complaints.

The investigation found that the resort failed to recall, or to timely recall, 57 former workers. They will each receive a share of the $1.52 million settlement, with an average payout of $26,500.

Under the statute, damages are calculated based on the number of days a worker waits to be offered open positions for which they are qualified. The company will also pay $5,300 in civil penalties to the state of California.

In a statement issued Friday, Terranea said it made a commitment to bring back its pre-pandemic workforce in a process that started well before SB 93 went into effect.

“We made good on that commitment, with more than 800 employees back on property today,” the company said. “This investigation was a consequence of vague and poorly-defined language in SB 93.”

Terranea denies all of the allegations made in the wage citation.

Terranea workers were at the forefront of the campaign to enact SB-93. Regulators say the company terminated most of its employees without making a binding commitment to rehire them and also cut off their healthcare at the beginning of the pandemic.

Kurt Petersen, co-president of Unite Here Local 11, which fought for the law and helped the workers file complaints, deemed it “a tremendous victory.”

“This massive settlement sends a powerful message to the entire hospitality industry that these worker protections have real teeth and that companies may violate them at their peril,” Petersen said.

Martinez is happy with the settlement.

“I am really glad to know I will be getting my job back,” he said. “Sad it took the state stepping in to make sure Terranea followed the law.”