Santa Monica Divided Over Rehiring Law

Santa Monica’s landmark law regulating how businesses rehire workers laid off due to the post-Sept. 11 tourism slump is being praised by some as patriotic--and condemned by others as un-American.

City Council members voted 4 to 3 Tuesday to require large firms operating in popular tourist and downtown areas to offer the jobs to former employees first before hiring new workers once the economy improves.

The ordinance affects firms in the city’s costal zone that do $5 million or more in annual business, including major hotels that so far have laid off about 300 workers because of the dramatic drop in travel since the terrorist attacks on the East Coast.

Opponents of the new law call it unnecessary and an illegal intrusion into the American free-enterprise system.

Supporters contend it is needed to protect hotel workers who had engaged in union organizing activities and a controversial campaign for a so-called living wage from possible retribution. They say the city’s action is in the same spirit as the federal government’s assistance to the airline industry since September.

For now, though, neither side predicts an imminent court challenge to the ordinance, even though Santa Monica’s city attorney has acknowledged that “the city’s power to regulate terms and conditions of employment for workers in private industry in one part of the city is highly uncertain.”

Until now, said City Atty. Marsha Moutrie, “no other city in the country has attempted to regulate employer-employee relations in this matter.”

Lawyer Tom Larmore, head of the Santa Monica Chamber of Commerce’s political action committee, said the new ordinance “is certainly vulnerable.” But he predicted that it will have little actual effect on employers.

“Most of the companies people think of being impacted by this ordinance are essentially adhering to it already,” Larmore said Thursday.

Larmore said he feels the real danger of the ordinance is the message it sends to firms that may be looking to relocate to Santa Monica. That message is one of meddling in private business matters by city officials, he said.

Many businesses are already upset by the City Council’s passage in May of the living wage law, which would set a $10.50 minimum wage for workers at hotels and other large businesses in Santa Monica’s beachfront and downtown tourism zones. That wage law is on hold until a voter referendum challenging it next year.

Councilman Herb Katz, who voted against the rehiring law, suggested that the issue will eventually trigger a court challenge.

Mayor Michael Feinstein said the ordinance is appropriate since “businesses always operate within a social context defined by municipal and state law. In this case we have to look at Sept. 11. It created an extraordinary situation in this country.”

Kurt Petersen, a Hotel Employees and Restaurant Employees union official, agreed.

“I think the businesses in Santa Monica should applaud this ordinance. It heeds the call for national compassion and unity. This could not be more pro-American.”