Terranea resort fined for failing to rehire workers it laid off during pandemic shutdown

A view of the exterior and valet of the Terranea Resort in Rancho Palos Verdes.
Terranea Resort in Rancho Palos Verdes was fined nearly $3.3 million for failing to first recall workers who were laid off during the pandemic shutdown of 2020.
(Wally Skalij / Los Angeles Times)

The state labor commissioner has ordered the ritzy Terranea Resort in Rancho Palos Verdes to pay nearly $3.3 million in fines for failing to first offer jobs to workers who had been laid off during the pandemic shutdown once the positions were available again.

The fines represent the first citation imposed for violations of 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. Labor unions said the law prevents businesses from using the pandemic shutdown to replace older workers — including many women and people of color — with younger, lower-paid staff.

The labor commissioner ordered the fines Wednesday against Terranea for failing to offer jobs altogether or failing to do so in a timely manner for dozens of housekeepers, banquet servers, sous chefs, massage therapists and bartenders who were laid off when the resort closed in March 2020. The resort reopened that June.

“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 Thursday. “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.”


David Gomez Martinez, who worked as a banquet server at the resort since 2009, has yet to be offered his old job, according to the labor commissioner’s citation. In an interview, Martinez said he and his wife collected stimulus funding but also dipped into their savings and their children’s college funds to make ends meet after he was laid off in March 2020.

“It has been a struggle,” he said, noting that his father and brother both passed away as a result of COVID-19 while he was out of work.

He is hopeful that Terranea will offer him his old job and pay him for failing to recall him. “I’m excited and a little relieved,” Martinez said.

The fines are to be distributed among the workers, based on the number of days Terranea failed to offer positions to each worker. For each day a position was open but was not offered to a former employee, the resort was fined $500, plus interest and penalties. For example, 14 housekeepers will split $1.3 million — or about $95,570 each, according to the labor commissioner’s citation.

The citation listed five workers, including Martinez, who have yet to be contacted about returning to their old jobs.

In a statement, the resort said “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 resort has 15 days to appeal the fines to an administrative law judge.

The resort’s statement also blamed the law’s “ambiguous and poorly-defined language” and said more than 85% of the staff employed before the shutdown have returned to the resort.

“We demonstrate our care and concern for our associates through our deeds, not just words,” the resort said.

The 102-acre resort on the bluffs of Rancho Palos Verdes features 582 luxurious rooms, multiple restaurants and a spa.

The fines represent only the latest chapter in a drawn-out 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.

It wasn’t the mac-and-cheese incident or the insubordination over an order of chicken wings that got a veteran cook fired from the upscale Terranea Resort, an administrative law judge ruled.

In 2019, an administrative law judge ordered that the resort rehire a cook who the judge determined was illegally fired for speaking out in favor of unionizing his fellow workers. In December, the National Labor Relations Board ordered Terranea to pay the cook $35,000 in back wages for the time he was out of work.

Terranea agreed in 2019 to pay $2.1 million to settle a lawsuit filed by workers who demanded pay for time they spent waiting to get uniforms before each shift and being driven from a remote parking lot.

The resort has fired back, accusing Unite Here of using questionable tactics to force Terranea to allow union members on the property to organize workers. The union has called for a boycott of the resort, a message it has spread to brides, grooms and guests of weddings planned at the resort, as well as companies that regularly hold conferences at the resort or have business partnerships with Terranea.

A young couple with plans to hold their fall wedding reception at the swanky Terranea Resort got an unexpected message on their online wedding planning site.