Terranea Resort agrees to $1.5-million settlement in dispute over laid-off workers

The upscale Terranea Resort in Rancho Palos Verdes agreed Thursday to pay $1.52 million to settle allegations that it violated labor laws by failing to offer laid-off workers their jobs back when it began rehiring after the pandemic slowdown.

A state labor commissioner called on Terranea to pay $3.3 million in fines in March for allegedly violating legislation adopted last year that requires hotels, event centers and airport hospitality and janitorial employers to first offer positions to workers laid off because of a COVID-19 shutdown when the jobs become available again. It was the first citation for violations of that law.

Terranea appealed the fines, saying the law was vaguely worded, but agreed Thursday to settle the dispute by paying $1.52 million without admitting wrongdoing, according to court records. The resort also agreed to offer jobs to three former employees: a banquet server, a laundry attendant and a banquet houseperson.

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In a statement, a Terranea representative said the resort had been trying to hire back all of its workers after the business reopened and blames “vague and poorly defined language” in the law for the investigation by state regulators.

“We believed and continue to believe we were in compliance with the law, and made the decision to settle to avoid the time and expense of unnecessary litigation,” said Jessie Burns, a spokesperson for Terranea.

The settlement will be distributed among 57 workers — housekeepers, banquet servers, sous chefs, massage therapists and bartenders — who were laid off when the resort closed in March 2020. These workers either were not offered their old jobs or did not get an offer in a timely manner when the resort reopened in June 2020, as required by state law.

The average payout for each worker will be more than $26,000. Actual amounts will be distributed based on how long the workers were waiting to be offered their old jobs back, with those who waited longest getting the most.

Terranea will also pay an additional $5,700 to the state as civil penalties.

The case against Terranea was pushed by Unite Here Local 11, a Southern California union that represents hospitality workers and has for years been trying to unionize workers at the ritzy resort.

“This is a tremendous victory for the Terranea’s workers, who fought to win and then to enforce their right to return to their jobs and provide for their families,” said Kurt Petersen, co-president of Unite Here Local 11, adding that the settlement sends “a powerful message” to the hospitality industry.

The settlement represents the latest chapter in a years-long battle between the resort’s management and its workers, many of whom have been trying to unionize with the help of Unite Here Local 11, which represents 32,000 hospitality, airport, sports arena and convention center workers in Southern California.