Wage Law

On November 22, 2006, the L.A. City Council adopted Ordinance No. 178082, entitled “Hotel Worker Living Wage Ordinance”, which set minimum wage standards for certain hotel workers employed within a particular Business Improvement District near LAX. Under the ordinance, hotels within the District that contained 50 or more guest rooms were obliged to pay at least $9.39 per hour to workers who received health benefits, and at least $10.64 per hour to workers who did not receive health benefits.

Six weeks later, opponents of the ordinance submitted a referendum petition with 103,000 signatures, which, once certified, obligated the City Council to submit the Wage Ordinance to a popular vote or repeal it. In January 2007, the City Council repealed the Wage Ordinance. However, less than a month later, they enacted a new Ordinance entitled “Airport Hospitality Enhancement Zone Ordinance,” which incorporated similar provisions to those challenged by the referendum petition, but with changes that included: implementation in phases, with delayed full implementation until January 1, 2008; exemptions for business that could show the new regulations to be significantly burdensome; and exemptions for workers who had agreed in a collective bargaining agreement to waive the requirements.

Business interests filed a petition seeking mandamus and injunctive relief against the L.A. City Council and other parties, contending that the City Council improperly approved an ordinance essentially similar to one that the City Council had repealed following respondents’ successful campaign to institute a referendum on it. The trial court granted respondents’ petition. Real party in interest Unite Here Local 11 appealed. The Court of Appeal reversed.

We conclude that the provisions of the Zone Ordinance, taken as a whole, place it squarely within the Stratham court’s characterization of a proper second ordinance: the provisions of the Zone Ordinance, on their face, are substantial, relate to items of importance, and aim at “avoiding, perhaps, the objections made to the first ordinance.” (Stratham, supra, 45 Cal.App. at p. 440.) The provisions of the Zone Ordinance directly address the objections to the Wage Ordinance by providing guaranteed tangible economic benefits to the hotels that mitigate the financial burden of the wage requirements, while limiting imposition of such requirements in other areas of the City. Accordingly, the trial court erred in granting the writ petition.

The judgment is reversed. The matter is remanded to the trial court with directions to vacate the orders enjoining appellant [city clerk] Frank Martinez from publishing the zone ordinance and granting the petition for writ of mandate, and to enter a new order denying the petition for writ of mandate. Appellants are awarded their costs on appeal.

The case is Rubalcava v. Martinez (2007) __ Cal.App.4th __. You can download the full text with exhibits in pdf or word format.