San Francisco County Municipal Code Art. 73 Hospitality Industry Worker

RETENTION* Sec. 73.1. Purpose. Sec. 73.2. Definitions. Sec. 73.3. Continued Employment of Eligible Hospitality Workers. Sec. 73.4. Transition Employment Period. Sec. 73.5. Notice of Change in Control. Sec. 73.6. Remedies for Violation. Sec. 73.7. Exemption for Collective Bargaining Agreement. Sec. 73.8. No Limitation of Other Rights and Remedies. Sec. 73.9. Severability. Sec. 73.10. No Conflict with Federal or State Law.

*Editor’s Note: Former Police Code Article 33E (“Hospitality Industry Worker Retention”) was redesignated as Labor and Employment Code Article 73 by Ord. 221-23, File No. 230835, approved November 3, 2023, effective December 4, 2023, and operative January 4, 2024.

Large hospitality establishments, such as large hotels, large restaurants, and food service facilities in stadiums and arenas, are a major employment base for San Francisco, supporting close to 30,000 jobs, generating over $10 billion in economic activity annually, and providing close to $1 billion in tax and fee revenue to the City. These establishments are also a major draw for visitors to San Francisco. An experienced and professional hospitality workforce benefits tourists and residents alike by ensuring that patrons of San Francisco’s hospitality establishments have a positive and safe customer experience and promoting San Francisco as a world-class destination. These establishments also provide good, stable employment for persons who are disproportionately low-income. Changes in ownership or management of large hospitality establishments can result in displacement of this workforce. A transitional retention period upon change in ownership, control, or operation of large hospitality establishments promotes stabilization of this vital workforce and helps ensure that visitors and residents of San Francisco continue to benefit from an experienced and professional hospitality industry workforce. (Added as Police Code Sec. 3300E.1 by Ord. 100-14, File No. 140416, App. 6/26/2014, Eff. 7/26/2014; redesignated by Ord. 221-23, File No. 230835, App. 11/3/2023, Eff. 12/4/2023, Oper. 1/4/2024)

For purposes of this Article 73, the following definitions apply: “Change in Control” shall mean any sale, assignment, transfer, contribution, or other disposition (including by consolidation, merger, or reorganization) of all or the majority of the assets of, or a controlling interest in, the Incumbent Hospitality Employer or IHE Parent or any Hospitality Establishment under the operation or control of either such Incumbent Hospitality Employer or IHE Parent. “City” shall mean the City and County of San Francisco. “Eligible Hospitality Worker” shall mean any individual who has worked for the Incumbent Hospitality Employer at the Hospitality Establishment subject to a Change in Control for at least 90 days prior to the execution of the Transfer Document. Notwithstanding the previous sentence, “Eligible Hospitality Worker” does not include a managerial, supervisory, or confidential employee. “Employment Commencement Date” shall mean the date on which an Eligible Hospitality Worker retained by the Successor Hospitality Employer pursuant to this Article 73 commences work for the Successor Hospitality Employer in exchange for compensation and benefits under the terms and conditions established by the Successor Hospitality Employer and as required by law. “Hospitality Establishment” shall mean a Large Hotel, Large Food Service Operation or Large Restaurant. “Incumbent Hospitality Employer” shall mean the Person that owns, controls, and/or operates the Hospitality Establishment prior to the Change in Control. “IHE Parent” shall mean any Person who owns or controls the Incumbent Hospitality Employer. “Large Food Service Operation” shall mean a food and/or beverage concession within or on the grounds of a stadium, arena, theater, auditorium, convention center, or similar facility located in the City with a seating capacity of 5,000 or more at which 100 or more persons have been employed at food and/or beverage concession(s) during any payroll period during the 180 days of operation prior to the Change in Control. For purposes of the 100-employee threshold in the preceding sentence, the number of employees of separately-owned food and/or beverage concession(s) shall be aggregated if operated in the same venue. “Large Hotel” shall mean a Hotel as defined in Planning Code Section 102 that has 100 or more guest rooms and/or suites of rooms. “Large Hotel” shall not include a Residential Hotel as defined in Section 102 of the Planning Code. “Large Restaurant” shall mean a “restaurant” as defined in Section 471.3 of the Health Code that has employed 200 or more persons at a single establishment in the City during the 90 days of operation prior to the Change in Control. “Person” shall mean an individual, proprietorship, corporation, partnership, limited partnership, limited liability partnership or company, trust, business trust, estate, association, joint venture, agency, instrumentality, or any other legal or commercial entity, whether domestic or foreign. “Successor Hospitality Employer” shall mean the Person that owns, controls, and/or operates the Hospitality Establishment after the Change in Control. “Transfer Document” shall mean the purchase agreement or other document(s) effecting the Change in Control. (Added as Police Code Sec. 3300E.2 by Ord. 100-14, File No. 140416, App. 6/26/2014, Eff. 7/26/2014; amended by Ord. 63-20, File No. 200077, App. 4/24/2020, Eff. 5/25/2020; redesignated by Ord. 221-23, File No. 230835, App. 11/3/2023, Eff. 12/4/2023, Oper. 1/4/2024)

WORKERS. (a) The Incumbent Hospitality Employer shall, within 10 days after the execution of the Transfer Document, provide to the Successor Hospitality Employer the name, contact information, date of hire, and employment occupation classification of each Eligible Hospitality Worker. For purposes of this subsection (a), contact information shall include but need not be limited to the Eligible Hospitality Worker’s phone number and email address. (b) The Successor Hospitality Employer shall maintain a retention list of Eligible Hospitality Workers identified by the Incumbent Hospitality Employer as set forth in subsection (a) of this Section 73.3 and shall be required to retain workers from that list for a period beginning on the execution of the Transfer Document and continuing for 90 days after the Hospitality Establishment is fully operational and open to the public under the Successor Hospitality Employer. If there is a gap between the date of the execution of the Transfer Document and delivery of the retention list pursuant to subsection (a) of this Section 73.3, the Successor Hospitality Employer may, if needed, hire employees other than Eligible Hospitality Workers during the interim period for the interim period only. (c) If the Successor Hospitality Employer extends an offer to an Eligible Hospitality Worker to be retained as an employee, the offer must be made in writing and the Successor Hospitality Employer shall retain written verification of that offer for no less than three years from the date the offer was made. The verification shall include the name, address, date of hire, and employment occupation classification of each Eligible Hospitality Worker to whom the offer was made. (Added as Police Code Sec. 3300E.3 by Ord. 100-14, File No. 140416, App. 6/26/2014, Eff. 7/26/2014; redesignated by Ord. 221-23, File No. 230835, App. 11/3/2023, Eff. 12/4/2023, Oper. 1/4/2024)

(a) A Successor Hospitality Employer shall retain each Eligible Hospitality Worker hired pursuant to this Article 73 for no less than 90 days following the Eligible Hospitality Worker’s Employment Commencement Date. During this 90-day transition employment period, Eligible Hospitality Workers shall be employed under the terms and conditions established by the Successor Hospitality Employer in accordance with the law. (b) If within the period established in Section 73.3(b) the Successor Hospitality Employer determines that it requires fewer Eligible Hospitality Workers than were employed by the Incumbent Hospitality Employer, the Successor Hospitality Employer shall retain Eligible Hospitality Workers by seniority within each job classification to the extent that comparable job classifications exist or pursuant to an applicable collective bargaining agreement, if any. Any nonclassified Eligible Hospitality Workers shall be retained by seniority and according to experience or pursuant to the terms of an applicable collective bargaining agreement, if any. (c) During the 90-day transition employment period established in Section 73.4(a), the Successor Hospitality Employer shall not discharge without cause an Eligible Hospitality Worker retained pursuant to this Article. (Added as Police Code Sec. 3300E.4 by Ord. 100-14, File No. 140416, App. 6/26/2014, Eff. 7/26/2014; redesignated by Ord. 221-23, File No. 230835, App. 11/3/2023, Eff. 12/4/2023, Oper. 1/4/2024)

(a) The Incumbent Hospitality Employer shall post notice of the Change in Control at the location of the affected Hospitality Establishment within five business days after the execution of the Transfer Document. Notice shall remain posted during any closure of the Hospitality Establishment and until the Hospitality Establishment is fully operational and open to the public under the Successor Hospitality Employer. (b) Notice shall include, but is not limited to, the name of the Incumbent Hospitality Employer and its contact information, the name of the Successor Hospitality Employer and its contact information, and the effective date of the Change in Control. For purposes of this subsection (b), contact information shall include but need not be limited to the name, address, phone number and email address of a representative of the Incumbent Hospitality Employer and Successor Hospitality Employer. (c) Notice shall be posted in a conspicuous place or places at the Hospitality Establishment so as to be readily viewed by Eligible Hospitality Workers and other employees. (Added as Police Code Sec. 3300E.5 by Ord. 100-14, File No. 140416, App. 6/26/2014, Eff. 7/26/2014; redesignated by Ord. 221-23, File No. 230835, App. 11/3/2023, Eff. 12/4/2023, Oper. 1/4/2024)

(a) Civil Action. The City Attorney, any person aggrieved by a violation of this Article 73, or any other person or entity acting on behalf of the public as provided for under applicable state law, may bring a civil action in a court of competent jurisdiction against the Incumbent Hospitality Employer, Successor Hospitality Employer, or other person violating this Article and, upon prevailing, shall be entitled to such legal or equitable relief as may be appropriate to remedy the violation including, without limitation, the payment of any back wages unlawfully withheld, the payment of an additional sum as liquidated damages in the amount of $50 to each Eligible Hospitality Worker or person whose rights under this Article were violated for each day that the violation occurred or continued, reinstatement in employment and/or injunctive relief and shall be awarded reasonable attorneys’ fees and costs. Back pay shall be calculated at a rate of compensation not less than the higher of (1) the average regular rate of pay received by the Eligible Hospitality Worker during the last three years of the Eligible Hospitality Worker’s employment in the same occupation classification, or (2) the most recent regular rate received by the Eligible Hospitality Worker while employed by either the Incumbent Hospitality Employer or the Successor Hospitality Employer. Provided, however, that any person or entity enforcing this Article on behalf of the public as provided for under applicable state law shall, upon prevailing, be entitled only to equitable, injunctive or restitutionary relief, and reasonable attorneys’ fees and costs. Nothing in this Article shall be interpreted as restricting, precluding, or otherwise limiting a separate or concurrent criminal prosecution under the Municipal Code or state law. Jeopardy shall not attach as a result of any civil enforcement action taken pursuant to this Article. (b) Interest. In any civil action brought under this Article, the court shall award interest on all amounts due and unpaid at the rate of interest specified in subdivision (b) of Section 3289 of the California Civil Code. (Added as Police Code Sec. 3300E.6 by Ord. 100-14, File No. 140416, App. 6/26/2014, Eff. 7/26/2014; redesignated by Ord. 221-23, File No. 230835, App. 11/3/2023, Eff. 12/4/2023, Oper. 1/4/2024)

All or any portion of the applicable requirements of this Article 73 may be waived in a bona fide collective bargaining agreement, provided that such waiver is explicitly set forth in such agreement in clear and unambiguous terms.

(Added as Police Code Sec. 3300E.7 by Ord. 100-14, File No. 140416, App. 6/26/2014, Eff. 7/26/2014; redesignated by Ord. 221-23, File No. 230835, App. 11/3/2023, Eff. 12/4/2023, Oper. 1/4/2024)

This Article 73 does not in any way limit the rights and remedies that the law otherwise provides to Eligible Hospitality Workers, including but not limited to the rights to be free from wrongful termination and unlawful discrimination. (Added as Police Code Sec. 3300E.8 by Ord. 100-14, File No. 140416, App. 6/26/2014, Eff. 7/26/2014; redesignated by Ord. 221-23, File No. 230835, App. 11/3/2023, Eff. 12/4/2023, Oper. 1/4/2024)

If any part or provision of this Article 73, or the application of this Article in any circumstance, is enjoined or held invalid by a court of competent jurisdiction, the remainder of this Article, including the application of such part or provision in other circumstances, shall not be affected by such action and shall continue in full force and effect. To this end, the parts and provisions of this Article, and their application in particular circumstances, are severable. (Added as Police Code Sec. 3300E.9 by Ord. 100-14, File No. 140416, App. 6/26/2014, Eff. 7/26/2014; redesignated by Ord. 221-23, File No. 230835, App. 11/3/2023, Eff. 12/4/2023, Oper. 1/4/2024)

Nothing in this Article 73 shall be interpreted or applied so as to create any requirement, power, or duty in conflict with any federal or state law. (Added as Police Code Sec. 3300E.10 by Ord. 100-14, File No. 140416, App. 6/26/2014, Eff. 7/26/2014; redesignated by Ord. 221-23, File No. 230835, App. 11/3/2023, Eff. 12/4/2023, Oper. 1/4/2024)

In enacting and implementing this Article 73, the City is assuming an undertaking only to promote the general welfare. It is not assuming, nor is it imposing on its officers and employees, an obligation for breach of which it is liable in money damages to any person who claims that such breach proximately caused injury. (Added as Police Code Sec. 3300E.11 by Ord. 100-14, File No. 140416, App. 6/26/2014, Eff. 7/26/2014; redesignated by Ord. 221-23, File No. 230835, App. 11/3/2023, Eff. 12/4/2023, Oper. 1/4/2024)