P.O. Box 60995 Sunnyvale, CA 94088-0995 | (408) 742-6008 September 16, 2026
Christine Velasquez
Economic Development Manager
City of Sunnyvale
456 West Olive Avenue
Sunnyvale, CA 94086
RE: Moffett Park Business Group Position on Service Worker Retention Ordinance Dear Ms. Velasquez,
On behalf of the Moffett Park Business Group (MPBG), I am writing to reiterate our position regarding the proposed Service Worker Retention Ordinance (SWRO). MPBG has not supported this ordinance since it was first considered, and our position remains unchanged.
MPBG supports treating every worker with dignity, respect, and fairness. Businesses also recognize the importance of responsible workforce transitions when service contracts change. However, protecting workers does not require the City to mandate that one private employer retain another employer's workforce.
A 90-day retention mandate places new employment, operational, and financial responsibilities on an incoming service provider while restricting its ability to determine how to staff and perform the contract it has been hired to deliver. These burdens affect businesses and contractors of every size. Smaller companies may have fewer resources to absorb new administrative and legal requirements, while larger companies can face substantial costs and complexity across multiple employees, facilities, vendors, and contracts.
Most importantly, MPBG has not seen a demonstrated need for the ordinance or a clearly identified problem in Sunnyvale that warrants this type of citywide mandate.
1. Protecting Workers Without Mandating Employment
MPBG supports responsible workforce transitions, but mandatory employment is not the only way to accomplish that goal.
x Qualified incumbent employees can be considered without mandating their employment. Businesses and service providers already use practices such as first-right-of- refusal, opportunities for incumbent employees to apply for positions, union agreements, and coordination between outgoing and incoming vendors.
x Employment decisions should remain with the incoming employer. Previous employment on an account should not automatically guarantee employment with a new company. The incoming contractor should be able to evaluate employees individually and be accountable for the workforce it hires.
x Existing protections and workforce resources should be fully utilized. Depending on the circumstances, these include applicable WARN requirements, collective bargaining agreements, contractual transition provisions, Rapid Response, and workforce-development services.
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P.O. Box 60995 Sunnyvale, CA 94088-0995 | (408) 742-6008
x What demonstrated problem in Sunnyvale requires a citywide retention mandate? MPBG has not seen evidence that service workers are routinely losing employment solely because a service contract changes or that existing practices and protections are failing to address a widespread problem. Without that evidence, we question the need to continue pursuing an ordinance that creates new obligations for businesses and contractors.
2. Business and Employer Decision-Making
Businesses change service providers for many legitimate reasons, including poor performance, safety concerns, changing operational needs, or failure to meet contractual requirements. A retention mandate can limit the ability of a business to make meaningful changes when replacing a service provider.
x The incoming contractor is accountable for results and should have authority over its workforce. A new vendor assumes responsibility for service quality, workplace conduct, supervision, safety, and contractual performance. It should be able to evaluate the employees for whom it will be responsible.
x Different contractors operate differently. A new provider may use different staffing levels, qualifications, schedules, management structures, or job responsibilities. Requiring retention of the previous vendor's workforce can interfere with the operating model on which the new contractor based its proposal.
x Some facilities have additional requirements. Government, security, and regulated operations may require background checks, security clearances, licenses, specialized qualifications, or compliance with government contracts that must be considered when making employment decisions.
Businesses should be able to change vendors when service does not meet their needs, and incoming contractors should have reasonable control over how they staff and deliver the work for which they are accountable.
3. Operational, Contracting and Liability Burdens
The SWRO would add requirements to what is already a complex transition between an outgoing vendor, an incoming vendor, and the business contracting the service.
x Employee eligibility, seniority, and records. Incoming contractors may be required to determine which employees qualify for retention and rely on employment information maintained by another company. This adds administrative responsibility and can create disputes when information is incomplete or inconsistent. x Employment obligations begin immediately. An incoming employer may assume responsibilities involving benefits, protected leave, insurance, workplace incidents, performance management, and other employment matters for workers it did not originally hire.
x Potential for transferring poor-performing employees. An outgoing vendor could assign employees with performance concerns to an account before a transition, leaving the incoming contractor required to retain workers it did not select and may know little about. x “Just cause” creates added risk. Once retained, an incoming contractor may hesitate to terminate a poor-performing employee because “just cause” could be interpreted differently by employers, attorneys, employees, or enforcement authorities, increasing the potential for Attachment 4
P.O. Box 60995 Sunnyvale, CA 94088-0995 | (408) 742-6008
disputes and legal costs.
x Sunnyvale-specific requirements add contracting complexity. Many companies operate under regional or national service agreements. Different employment requirements for one jurisdiction can require contract changes and additional compliance procedures.
Together, these requirements create additional HR, legal, compliance, and management costs.
Smaller companies may need expertise they do not currently maintain, while larger companies may experience significant costs when these requirements are applied across numerous employees, vendors, and contracts.
4. Impact on Businesses of All Sizes and Vendor Competition The burden does not end with the incoming contractor. It can also affect the businesses contracting these services and the broader pool of vendors willing to compete for the work.
x Additional requirements can affect whether and how vendors bid. Contractors may factor employment obligations, administrative costs, insurance exposure, and legal risk into their decision to bid and the price they charge.
x Incoming contractors may already have their own trained employees. Requiring them to retain another company's workforce can disrupt existing staffing plans and commitments to their own employees.
x Businesses of all sizes ultimately bear the additional costs. Increased vendor costs may be reflected in contract pricing, while businesses may also need additional procurement, HR, legal, compliance, and management resources to administer vendor transitions.
These impacts are not limited to small businesses. For smaller companies, the concern may be limited resources and capacity; for larger companies, it may be the scale and complexity of applying new requirements across many employees, vendors, facilities, and contracts.
This raises a fundamental question for MPBG: Why should businesses and contractors of any size assume these additional costs, liabilities, and employment obligations when a need for a citywide mandate has not been demonstrated?
5. A Better Approach to Responsible Workforce Transitions The choice is not between adopting an SWRO and doing nothing. Responsible workforce transitions can be supported without requiring one private employer to retain another employer's workforce.
x MPBG encourages the City to encourage existing and practical transition measures, including timely notice and communication, collective bargaining agreements and contractual transition provisions, applicable WARN requirements, workforce-support programs, and opportunities for qualified incumbent employees to be considered by an incoming contractor.
These approaches support workers while preserving an important principle: the employer responsible for a workforce should have the ability to select and manage that workforce.
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P.O. Box 60995 Sunnyvale, CA 94088-0995 | (408) 742-6008
MPBG's Position
MPBG has consistently opposed adoption of a Service Worker Retention Ordinance, and our position remains unchanged.
Every worker deserves dignity and fair treatment. Businesses also have responsibilities to their employees, customers, contractors, and communities. They must be able to address poor performance, select qualified vendors, manage risk and costs, meet security and contractual requirements, and hold service providers accountable.
A mandatory 90-day retention ordinance shifts employment obligations and risk to businesses and incoming contractors while limiting their ability to make fundamental workforce and operational decisions.
Given these concerns, and without a demonstrated need for a citywide mandate, Moffett Park Business Group continues to oppose adoption of a Service Worker Retention Ordinance in Sunnyvale.
We appreciate the City's consideration of the business community's concerns and remain available to discuss responsible workforce-transition practices that protect workers without unnecessarily burdening Sunnyvale businesses and service providers.
Sincerely,
Kerry Haywood, Executive Director
Moffett Park Business Group
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