BILL ANALYSIS                                                                                                                                                                                                    Ó

                                                                  AB 508
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          AB 508 (Swanson)
          As Introduced February 15, 2011
          Majority vote 

           LABOR & EMPLOYMENT     5-1      APPROPRIATIONS      12-5        
          |Ayes:|Swanson, Alejo, Allen,    |Ayes:|Fuentes, Blumenfield,     |
          |     |Furutani, Yamada          |     |Bradford, Charles         |
          |     |                          |     |Calderon, Campos, Davis,  |
          |     |                          |     |Gatto, Hall, Hill, Lara,  |
          |     |                          |     |Mitchell, Solorio         |
          |     |                          |     |                          |
          |Nays:|Miller                    |Nays:|Harkey, Donnelly,         |
          |     |                          |     |Nielsen, Norby, Wagner    |
          |     |                          |     |                          |
           SUMMARY  :  Extends an existing bid preference for public transit 
          contractors who agree to retain employees (as specified) to also 
          include solid waste handling and recycling services contractors.

           EXISTING LAW  :

          1) Requires all bidders on public transit service contracts to 
             advise the awarding authority whether they will retain the 
             employees of the prior contractor/subcontractor.

          2) Requires awarding authorities who put out a bid for public 
             transit service to provide a 10% bidding preference to 
             contractors and subcontractors who agree to retain the 
             employees of the prior contractor/subcontractor for a period 
             of at least 90 days.

          3) Requires existing contractors to provide awarding authorities 
             with specified employee information, which will assist 
             bidding contractors/subcontractors in costing their bids.

          4) Exempts contractors/subcontractors from retaining employees 
             for "cause," as defined.

          5) Authorizes the new contractor/subcontractor to pay alternate 
             wages and provide alternate benefits from those of the prior 


                                                                  AB 508
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          6) Authorizes the new contractor/subcontractor to retain fewer 
             employees than the prior contractor, if necessary.  In such a 
             situation, the employees shall be retained by seniority 
             within the given job classification.

          7) Authorizes employees who have not been offered employment or 
             who have been discharged in violation of the provisions of 
             this bill to bring suit against the contractor/subcontractor 
             in superior court.

          8) Provides for remedy in the form of reinstatement, back pay, 
             benefits and attorney's fees and costs.

          9) Obliges an awarding authority, after public hearing, to 
             terminate a contract substantially breached by a 

          10)Provides that such a terminated contractor/subcontractor is 
             ineligible to bid or be awarded a contract/subcontract with 
             the terminating awarding authority for between one and three 
             years, to be determined by the awarding authority. 

          11)Provides for employment retention protection for employees of 
             janitorial and building maintenance contractors, as 

           FISCAL EFFECT  :  According to the Assembly Appropriations 
          Committee, unknown state reimbursable mandated costs to extend a 
          current bid preference to solid waste handling and recycling 

           COMMENTS  :  Existing law already establishes a 10% bidding 
          preference for public transit service contractors and 
          subcontractors who agree to retain employees of the previous 
          contractor for a period of at least 90 days.  That requirement 
          was enacted by Senate Bill 158 (Alarcón), Chapter 103, Statutes 
          of 2003.  AB 508 (Swanson) would simply extend those 
          requirements to contractors and subcontractors who submit bids 
          for solid waste handling and recycling services.   

          This bill is co-sponsored by the California Labor Federation, 
          AFL-CIO and the California Teamsters Public Affairs Council.  


                                                                  AB 508
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          The sponsors state that this bill is intended to reduce 
          unemployment by keeping workers from being displaced when a 
          city's contract for garbage and recycling changes companies.  
          The sponsors argue that when cities and counties contract for 
          services like garbage and recycling disposal, they are often 
          focused on the costs of the bids, the level of service provided, 
          and the type of diversion offered.  In many cases, the workers 
          fall through the cracks when contracts change hands.  The 
          existing workforce, trained and experienced, is summarily laid 
          off and replaced.  These mass layoffs hurt individual families, 
          but also impact the local economy.  Promoting a stable workforce 
          allows workers to invest in and contribute to their community.  
          It means people can stay in their homes, kids can stay in their 
          schools, and families can retain health insurance.  It also 
          means fewer workers relying on unemployment benefits or other 
          taxpayer-funded programs.

          Opponents contend that this bill is designed to ensure that a 
          union, who has been elected as the bargaining representative 
          through the proper procedures for the prior contractor, will 
          remain the bargaining representative for the subsequent 
          employer.  Since this bill mandates that subsequent 
          employers/contractors, who want to obtain a bid preference for a 
          public contract, must agree to hire the predecessor's employees, 
          opponents argue that it basically forces a successor 
          employer/contractor into a union workforce.  Refusal to make 
          such a promise will basically eliminate that contractor from the 
          bidding process to obtain the contract.  Opponents believe the 
          decision of whether or not to have a union in the workplace 
          should be left to the employers and employees, after following 
          the proper procedures outlined by the National Labor Relations 

          Analysis Prepared by  :    Ben Ebbink / L. & E. / (916) 319-2091 
          FN: 0000880