Recall Brings On Flood of Bills Targeting Employers
By HOWARD FINE
Making things easier for business is a big theme of the recall campaign. But the bid to oust Gov. Gray Davis has had an opposite effect in the Legislature.
Along with workers’ compensation reform and employer-provided healthcare, other measures coming out of the just-completed legislative session stand to impact California em-ployers.
Many of the bills were put together knowing the embattled governor can’t afford to veto them.
Several bills now awaiting Davis’ signature would expand the rights of workers to sue their employers for everything from sexual harassment to retaliatory firings. Another bill would require apparel makers that work for the state to pay their workers a living wage.
Legislators also passed a major piece of environmental legislation that would place fees on makers of computer monitors to set up a recycling program for old picture tubes and other components.
“Employers will see a lot more lawsuits if Gov. Davis signs these bills,” predicted Fred Main, senior vice president of the Sacramento-based California Chamber of Commerce, which opposes virtually all of the recent bills.
Davis has until Oct. 12 to sign or veto the bills. He’s likely to sign most of them to shore up support from the Democrats’ base of labor unions and trial attorneys in advance of the recall election scheduled for Oct. 7 pending court appeals.
Recall backers didn’t intend for the vote to produce a legislative boon for the Democrats. But they inadvertently did.
Democrats rushed through a wish list of legislation to ensure the bills would reach the governor, rather than face the prospect of vetoes should he be replaced by a Republican.
Now that the bills are on Davis’ desk, he is coming under pressure from his labor union and trial lawyer supporters to sign them. Business groups, meanwhile, are urging Davis to veto many of the measures, citing a weak economy and the cumulative impact of rising costs on businesses.
“Bills such as the employer healthcare mandate and the ones giving employees more rights to sue will heap billions of dollars in new costs on employers,” said Jack Stewart, president of the California Manufacturers and Technology Association in Sacramento.
Business supporters did manage to stop a few key bills in the final hours of the legislative session. Among them: a measure that would have restricted developers from building near “sacred” Indian sites and a bill that would have expanded the ability of people to file lawsuits alleging unfair business practices by companies.
But several bills opposed by business got through, including a series of measures expanding employees’ ability to sue employers. The biggest one: SB 796, by Sen. Joseph Dunn, D-Santa Ana, which would allow employees to file suit against their employers even if their complaints are not acted upon by state enforcement agencies.
“This is a way for trial lawyers to file even more lawsuits,” said Michael Shaw, assistant state director for the California chapter of the National Federation of Independent Business.
Another bill, AB 1715, by Ellen Corbett, D-San Leandro, would prohibit employers from requiring employees to sign binding arbitration agreements as an employment condition.
Corbett also authored AB 76, which would hold employers liable for sexual harassment of a worker by a third party, such as a customer or client.
“These and other bills were extremely important from the standpoint of pro-consumer legislation,” said Ray Boucher, vice president of the Consumer Attorneys of California and a partner in the Los Angeles law firm of Kiesel Boucher & Larson LLP.
Labor unions registered big victories in the session. Among their key bills was SB 578, by Sen. Richard Alarcon, D-Van Nuys, which would require apparel makers with state contracts to pay their workers a living wage and prohibit them from imposing overtime.
Another labor bill was AB 274, by Assemblyman Paul Koretz, D-West Hollywood, which places a higher standard of proof on employers when workers allege they have been victims of retaliation.
“This is going to make it awfully difficult for an employer to fire somebody, even if they do believe they have just cause,” Shaw said. “It’s just another in a long list of impediments to employers who want to do business in California.”
Fine is a staff writer for the Los Angeles Business Journal.
STICK IT TO ‘EM
Businesses are the target of several bills awaiting Gov. Davis’ signature
Bill Author(s) Description
SB 2 Burton/Speier Requires employers to provide healthcare or pay into a state fund
SB 796 Dunn Gives workers the right to sue employers for wage, hour violations
AB 274 Koretz Raises proof standard for employers in worker retaliation lawsuits
AB 76 Corbett Let workers sue employers for sexual harassment by a third party
AB 1715 Corbett Bans mandatory arbitration pacts in employment contracts
SB 578 Alarcon Requires living wage at apparel makers working for the state
SB 20 Sher Imposes fee on computer makers for monitor recycling
