REPORT TO COUNCIL
SUBJECT
Title
Service Worker Retention Ordinance (Study Issue OCM 20-01)
Report
BACKGROUND
At the January 14, 2020, Council meeting, a representative of Unite Here Local Union 19 requested that Council adopt a Service Worker Retention Ordinance. Council directed staff to study how such an ordinance might be implemented in Sunnyvale and to conduct community outreach to gather input.
This Study Issue was ranked as the top study issue for the Office of the City Manager at the 2020 Study Issues Workshop, but was delayed due to the COVID-19 Pandemic. Staff resumed research and analysis in 2024 and, at the 2025 Study Issues Workshop, recommended dropping this issue, noting that no comparable city without a convention center had adopted a similar ordinance. Council asked staff to conduct additional outreach, including engagement with Unite Here Local Union 19, and return with the findings.
Staff have now completed this additional research and outreach and present the results for Council consideration.
EXISTING POLICY
Policy 5.1.1 Socio-Economic -Goal 5.1D Support efforts to create employment opportunities for economically disadvantaged individuals, disabled individuals, minorities, women, youth and others with special employment needs
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental, organizational or administrative activity that will not result in direct or indirect changes in the environment.
DISCUSSION
A service worker retention ordinance generally requires new contractors to retain existing employees for a 90-day transition period when service contracts change hands. The intent of these ordinances is to provide stability for workers, reduce the risk of service disruptions, and preserve institutional knowledge. Large cities such as San Francisco, Los Angeles, San Jose, and San Diego have adopted such ordinances, with most applying to city contracts and city-assisted projects, especially those involving convention centers and large event facilities.
Santa Clara is the only nearby city with an ordinance extending to private contracts. Its 2017 ordinance applies to entities with 25 or more employees, and entertainment venues with a capacity of at least 8,000 persons, that enter into contracts for building and/or food services valued at $25,000 or more for at least three months. Businesses subject to the ordinance must retain incumbent workers for a 90-day transition period when contractors change. During this period, workers cannot be dismissed without cause, reductions in workforce must follow seniority rules, and employees who perform satisfactorily must be offered a permanent job at the end of the transition. Santa Clara’s ordinance also provides that the provisions of the ordinance may be waived in whole or in part through a bona fide collective bargaining agreement, provided that the waiver is set forth in writing in clear and unmistakable terms.
Unite Here Local 19 requested that Sunnyvale adopt an ordinance modeled after Santa Clara’s ordinance, which covers service workers, including food service employees, maintenance employees, and security employees. In response, staff conducted outreach to businesses and community stakeholders through two community meetings held on August 19 and 20, 2025. Participants included representatives from the Sunnyvale Chamber of Commerce, the Silicon Valley Leadership Group, Moffet Park Business Group, Downtown Association, several business representatives, and Unite Here Local 19.
Feedback from business representatives and business organizations indicated that many already value and practice worker retention during contractor transitions. Businesses explained that it is in their own interest to keep staff who are familiar with their facilities, employees, and operating procedures, and that new vendors often interview and hire incumbent staff to avoid the costs of training new employees. For this reason, businesses said that they did not understand the need for a City ordinance to mandate something they already support and practice voluntarily. At the same time, they noted that there are occasions when contracts are changed specifically because workers do not meet performance standards. In those cases, requiring a successor contractor to retain underperforming employees would undermine the purpose of changing contractors and was seen as a regulatory overreach into private contracting decisions.
Sunnyvale is home to several large federal contractors, and they raised questions about how such an ordinance would align with federal procurement requirements. Because they are bound by federal contract terms, they may not have the flexibility to comply with local mandates, creating the risk of technical noncompliance. Businesses further commented that enforcement of such an ordinance would be challenging without regular monitoring and enforcement by the City. The only enforcement mechanism under Santa Clara’s ordinance is for workers to file private lawsuits.
Unite Here Local 19 reiterated its support for a Santa Clara-style ordinance, stating that it would provide meaningful protection for service workers during contractor transitions. Union representatives also stated during the outreach meetings that other cities have adopted similar ordinances. Staff asked the union to provide information on those jurisdictions, as staff’s research did not identify any comparable cities beyond those previously mentioned. As of the writing of this report, staff have not received any additional information from the union.
Based on feedback from the outreach meetings and research into what other cities are doing, staff determined that Sunnyvale does not share the conditions present in cities that have adopted worker retention ordinances. Unlike cities with convention centers or major event facilities, Sunnyvale has relatively few service contracts where such policies would be helpful. In addition, Sunnyvale already incorporates worker retention requirements in certain City contracts, such as the provision that requires Specialty Solid Waste to retain workers if its contract is reassigned. More broadly, Sunnyvale enforces worker protections through existing policies such as the Minimum Wage Ordinance, the Wage Theft Prevention Policy, and Local Hire requirements for construction projects.
Sunnyvale has no practical way to monitor or enforce a private-sector service worker retention ordinance. The City does not track when private businesses change service contracts and therefore lacks a mechanism to identify when the ordinance applies. Any violations would only come to light through employee-initiated litigation in civil court, leaving the City without an enforcement role. This lack of enforceability creates uncertainty for businesses, would likely generate confusion without providing measurable benefits, and would expose the City to adopting a policy that cannot be implemented effectively.
FISCAL IMPACT
This action has no impact on the City’s budget.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the City Hall reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website. Staff conducted two community meetings on August 19 and 20, 2025. Stakeholders included local businesses, labor representatives, and business associations. Also, staff notified all attendees who attended the outreach meetings of this meeting and sent a link to the staff’s report.
ALTERNATIVES
1. Do not adopt a Service Worker Retention Ordinance and consider Study Issue OCM-20-01 Service Worker Retention Ordinance complete.
2. Other Council Direction.
STAFF RECOMMENDATION
Recommendation
Alternative 1: Do not adopt a Service Worker Retention Ordinance and consider Study Issue OCM-20-01 complete.
JUSTIFICATION FOR RECOMMENDATION
Staff recommends that Council conclude the study issue and not adopt a Service Worker Retention Ordinance. Sunnyvale does not have the types of large facilities where these ordinances are most relevant, many businesses already retain employees voluntarily, and the City has no practical way to enforce such a requirement.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $500 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
___ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract*
___ Labor or personal employment contract
___ Contract under $50,000 or non-fiscal
___ Contract between public agencies
_X_ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: Connie Verceles Deputy City Manager
Reviewed by: Sarah Johnson-Rios, Assistant City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. Study Issue Paper OCM 20-01