BILL ANALYSIS                                                                                                                                                                                                    Ó






                             SENATE JUDICIARY COMMITTEE
                             Senator Noreen Evans, Chair
                              2013-2014 Regular Session


          AB 263 (Hernández)
          As Amended May 24, 2013
          Hearing Date: July 2, 2013
          Fiscal: Yes
          Urgency: No
          TMW


                                        SUBJECT
                                           
              Employment:  Retaliation:  Immigration-Related Practices

                                      DESCRIPTION 

          This bill would prohibit an employer or any other person or  
          entity from engaging in unfair immigration-related practices, as  
          defined, for the purpose of retaliation against any person who  
          exercises any rights under the Labor Code.  This bill would  
          authorize a private right of action for equitable relief,  
          damages, and penalties by an employee against an employer who  
          engages in unfair immigration-related practices and would also  
          establish a four-tier license suspension and revocation scheme  
          for first and subsequent violations. 

          This bill would also clarify that an employer is prohibited from  
          discriminating, retaliating, or taking adverse action against an  
          employee or job applicant who has engaged in prescribed  
          protected conduct relating to the enforcement of the employee's  
          or applicant's rights, provides up to a $10,000 penalty for  
          violations thereof, and would specify that an employee is not  
          required to exhaust administrative remedies or procedures to  
          enforce this prohibition.

                                      BACKGROUND  

          Existing law provides protections, rights, and remedies  
          available under state law to all individuals, regardless of  
          immigration status, who have applied for employment, or who are  
          or who have been employed, in this state.  Further, California's  
          labor laws provide anti-retaliation protection for employees,  
          who make claims against their employers for violations of labor  
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          laws.

          A recent study noted that there are approximately 2.6 million  
          undocumented individuals in California.  (Cho and Smith,  
          Workers' Rights on ICE:  How Immigration Reform Can Stop  
          Retaliation and Advance Labor Rights, National Employment Law  
          Project (Feb. 2013)  
           [as of June 23, 2013],  
          p. 2.)  The study also noted that "[m]ost undocumented  
          immigrants work in traditionally low-wage occupations such as  
          agriculture, construction, manufacturing, and service  
          industries, where workers face the greatest risk for  
          exploitation.  Undocumented workers are far more likely to  
          experience violations of wage and hour laws."  (Ibid.)  The  
          study states that many undocumented workers do not file claims  
          against their employers out of fear of "'getting in trouble' or  
          being fired."  (Ibid.) The study also found that "[w]hile  
          threats of job loss have an especially serious consequence in  
          this job market, an employer's threat to alert immigration or  
          local law enforcement of an undocumented immigrant worker's  
          status carries added force.  Such action is at least as frequent  
          as other forms of retaliation."  (Id. at pp. 2-3.)

          In order to further address employer retaliation against  
          employees who assert their rights under the Labor Code and  
          reaffirm the Legislative protections available to all employees,  
          regardless of citizenship status, this bill would prohibit  
          retaliation against an employee based on unfair  
          immigration-related practices, as defined.  This bill would also  
          clarify that an employer is prohibited from discriminating,  
          retaliating, or taking adverse action against an employee or  
          applicant who has engaged in prescribed protected conduct  
          relating to the enforcement of the employee's or applicant's  
          rights, provides up to a $10,000 penalty for violations thereof,  
          and would specify that an employee is not required to exhaust  
          administrative remedies or procedures to enforce this  
          prohibition.  

          This bill was heard by the Senate Labor and Industrial Relations  
          Committee on June 26, 2013, and passed out on a vote of 3-0.

                                CHANGES TO EXISTING LAW
           
          1.  Existing law  provides that all protections, rights, and  
            remedies available under state law, except any reinstatement  
                                                                      



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            remedy prohibited by federal law, are available to all  
            individuals regardless of immigration status who have applied  
            for employment, or who are or who have been employed, in this  
            state.  For purposes of enforcing state labor and employment  
            laws, existing law provides that a person's immigration status  
            is irrelevant to the issue of liability, and in proceedings or  
            discovery undertaken to enforce those state laws, no inquiry  
            shall be permitted into a person's immigration status except  
            where the person seeking to make this inquiry has shown by  
            clear and convincing evidence that the inquiry is necessary in  
            order to comply with federal immigration law.  (Lab. Code Sec.  
            1171.5; Civ. Code Sec. 3339; Gov. Code Sec. 7285; Health &  
            Saf. Code Sec. 24000.)  

             Existing law  prohibits discrimination against an employee or  
            job applicant who has engaged in prescribed protected conduct  
            relating to the enforcement of the employee's or applicant's  
            rights, including initiating an action or testifying in any  
            proceeding thereto, delineated under the Labor Code.  (Lab.  
            Code Sec. 98.6.)

             Existing law  provides that any employer who willfully refuses  
            to hire, promote, or otherwise restore an employee or former  
            employee who has been determined to be eligible for rehiring  
            or promotion by a grievance procedure, arbitration, or hearing  
            authorized by law, is guilty of a misdemeanor.  (Lab. Code  
            Sec. 98.6(b).)
             
            This bill  would clarify that the employee or job applicant is  
            also protected under the above provisions from retaliation or  
            adverse actions by the employer.  
             
            This bill  would authorize, in addition to any other remedies  
            available, a civil penalty, not to exceed $10,000 per employee  
            for each violation, to be imposed against the employer.

             This bill  would clarify that an employee is not required to  
            exhaust administrative remedies or procedures to enforce the  
            above prohibition.

          2.  Existing law  prohibits employers from withholding an  
            employee's wages and prohibits discrimination, retaliation,  
            and adverse actions by an employer against an employee or job  
            applicant who exercises his or her rights under the law.   
            (Lab. Code Sec. 200 et seq.)  

                                                                      



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             This bill  would also prohibit an employer or any other person  
            or entity from engaging in, or directing another person or  
            entity to engage in, unfair immigration-related practices  
            against any person for the purpose of, or with the intent of,  
            retaliating against any person for exercising any right  
            protected under the Labor Code or by any local ordinance  
            applicable to employees.  This bill would provide that  
            exercising a right protected by the Labor Code or local  
            ordinance includes, but is not limited to, the following:
                 filing a complaint or informing any person of an  
               employer's or other party's alleged violation of the Labor  
               Code or local ordinance, so long as the complaint or  
               disclosure is made in good faith;
                 seeking information regarding whether an employer or  
               other party is in compliance with the Labor Code or local  
               ordinance; and
                 informing a person of his or her potential rights and  
               remedies under the Labor Code or local ordinance, and  
               assisting him or her in asserting those rights.

             This bill  would define "unfair immigration-related practice"  
            to mean any of the following practices, when undertaken for  
            the retaliatory purposes prohibited above:
                 requesting more or different documents than are required  
               to confirm the employee's or prospective employee's  
               authorization to work in the United States, or a refusal to  
               honor documents tendered that on their face reasonably  
               appear to be genuine;
                 using the federal E-Verify system to check the  
               employment authorization status of a person at a time or in  
               a manner not required under federal law, or not authorized  
               under any memorandum of understanding governing the use of  
               the federal E-Verify system;
                 threatening to file or the filing of a false police  
               report; and
                 threatening to contact or contacting immigration  
               authorities.
             
            This bill  would provide that "unfair immigration-related  
            practice" does not include conduct undertaken at the express  
            and specific direction or request of the federal government.

             This bill  would provide that engaging in an unfair  
            immigration-related practice against a person within 90 days  
            of the person's exercise of rights protected under the Labor  
            Code or local ordinance applicable to employees shall raise a  
                                                                      



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            rebuttable presumption of having done so in retaliation for  
            the exercise of those rights.

             This bill  would provide that an employee or other person who  
            is the subject of a prohibited unfair immigration-related  
            practice, or a representative of that employee or person, may  
            bring a civil action for equitable relief and any damages or  
            penalties.

             This bill  would provide a tiered suspension scheme regarding  
            an employer's business license upon a finding by a court of  
            applicable jurisdiction of a violation, and, on receipt of the  
            court's order and notwithstanding any other law, the  
            appropriate agencies shall suspend or revoke the licenses  
            according to the court's order as follows:
                 for a first violation, the court shall order the  
               appropriate government agencies to suspend all licenses  
               that are held by the violating party for a period of 14  
               days; the licenses that are subject to suspension are all  
               licenses held by the violating party specific to the  
               business location or locations where the unfair  
               immigration-related practice occurred.  If the violating  
               party does not hold a license specific to the business  
               location or locations where the unfair immigration-related  
               practice occurred, but a license is necessary to operate  
               the violating party's business in general, the licenses  
               that are subject to suspension under this subdivision are  
               all licenses that are held by the violating party at the  
               violating party's primary place of business;
                 for a second violation, the court shall order the  
               appropriate government agencies to suspend for a period of  
               30 days all licenses that are held by the violating party  
               specific to the business location or locations where the  
               unfair immigration-related practice occurred.  If the  
               violating party does not hold a license specific to the  
               business location or locations where the unfair  
               immigration-related practice occurred, but a license is  
               necessary to operate the violating party's business in  
               general, the court shall order the appropriate agencies to  
               suspend for a period of 30 days all licenses that are held  
               by the violating party at the violating party's primary  
               place of business;
                 for a third violation, the court shall order the  
               appropriate government agencies to suspend for a period of  
               90 days all licenses that are held by the violating party  
               specific to the business location or locations where the  
                                                                      



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               unfair immigration-related practice occurred.  If the  
               violating party does not hold a license specific to the  
               business location or locations where the unfair  
               immigration-related practice occurred, but a license is  
               necessary to operate the violating party's business in  
               general, the court shall order the appropriate agencies to  
               suspend for a period of 90 days all licenses that are held  
               by the violating party at the violating party's primary  
               place of business; and
                 for a fourth violation, or if the court establishes a  
               pattern or practice of willful violations, the court shall  
               order the appropriate government agencies to permanently  
               revoke all licenses that are held by the violating party  
               specific to the business location or locations where the  
               unfair immigration-related practice occurred.  If the  
               violating party does not hold a license specific to the  
               business location or locations where the unfair  
               immigration-related practice occurred, but a license is  
               necessary to operate the violating party's business in  
               general, the court shall order the appropriate agencies to  
               permanently revoke all licenses that are held by the  
               violating party at the violating party's primary place of  
               business.

             This bill  would require the court to award a prevailing  
            employee or other person who is the subject of a prohibited  
            unfair immigration-document practice, reasonable attorney's  
            fees and costs, including any expert witness costs.

             This bill  would define "license" to mean any agency permit,  
            certificate, approval, registration, charter, or similar form  
            of authorization that is required by law and that is issued by  
            any agency for the purposes of operating a business in this  
            state, including any of the following:  (1) articles of  
            incorporation; (2) certificate of partnership, partnership  
            registration, or articles of organization; and (3) transaction  
            privilege tax license.  However, "license" would not include a  
            professional license.

             This bill  would provide that the above provisions are  
            severable, and, if any provision or its application is held  
            invalid, that invalidity shall not affect other provisions or  
            applications that can be given effect without the invalid  
            provision or application.

          3.  Existing law  provides specified employee privileges and  
                                                                      



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            prohibited employer conduct under the Labor Code.  (Lab. Code,  
            Div. 2, Part 3, commencing with Sec. 920.)

             This bill  would further prohibit an employer from discharging  
            an employee or in any manner discriminating, retaliating, or  
            taking any adverse action against an employee because the  
            employee updates or attempts to update his or her personal  
            information, unless the changes are directly related to the  
            skill set, qualifications, or knowledge required for the job.

          4.  Existing law  provides whistleblower protections for employees  
            and prohibits an employer from preventing, discriminating, or  
            retaliating against an employee who discloses information to a  
            government or law enforcement agency, where the employee has  
            reasonable cause to believe that the information discloses a  
            violation of state or federal statute, or a violation or  
            noncompliance with a state or federal rule or regulation.   
            (Lab. Code Sec. 1102.5.)

             Existing law  , with respect to whistleblower protections,  
            provides that an employer who violates these protections is  
            guilty of a misdemeanor, punishable, in the case of an  
            individual, by imprisonment in the county jail up to one year  
            or a fine up to $1,000, or both, and, in the case of a  
            corporation, by a fine up to $5,000.  (Lab. Code Sec.  
            1102.5(f).)
             
            This bill  would also prohibit any other person or entity from  
            preventing, discriminating, or retaliating against an employee  
            who discloses information to a government or law enforcement  
            agency against a whistleblowing employee.

             This bill  would also extend the whistleblower penalties to any  
            other person or entity and make other technical revisions.

                                       COMMENT
           
          1.  Stated need for the bill  
          
          The author writes:
          
            Immigrant workers represent perhaps the most vulnerable  
            segment of the workforce population in both the United States  
            and California.  First, many immigrant workers are  
            highly-concentrated in low-wage, underground economy  
            industries - garment manufacturing, agriculture, construction,  
                                                                      



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            restaurants, domestic work, janitorial or building maintenance  
            work, and car washes, among others.  As such, immigrant  
            workers work often work under harsh working conditions, earn  
            very low wages with little or no benefits, risk serious and  
            fatal injuries on the job, and are susceptible to employer  
            harassment and other forms of abuse.  Second, immigrant  
            workers are especially vulnerable to retaliation and often  
            face the additional risk that unscrupulous employers will  
            threaten to report them to immigration authorities.  Other  
            employers engage in other forms of retaliation and coercion  
            that chill employees from exercising their rights under the  
            law.

            Assembly Bill 263 addresses the retaliation of employers  
            against immigrant employees who are vulnerable to workplace  
            abuse due to their immigration status. The bill makes unlawful  
            an immigration-related practice committed by an employer or  
            other person, for retaliating against a worker for exercising  
            rights protected under the California Labor Code or a local  
            ordinance. 

            The bill would also authorize a civil action by an employee or  
            other person who is the subject of an unfair  
            immigration-related practice, and would require a court to  
            order a suspension of the business license for 14 days of a  
            person who violates these provisions for a first violation,  
            and to suspend for 30 or 90 days that license for a 2nd or  
            subsequent 3rd violation, and to permanently revoke that  
            license for a 4th violation or if the court establishes a  
            pattern or practice of willful violations.

          The California Labor Federation (CLF), AFL-CIO, sponsor, writes:

            Almost one quarter of all undocumented immigrants in the U.S.  
            live in California and one in ten workers here is  
            undocumented.  These workers are forced to live in the  
            shadows, with no path to legalization, leaving them extremely  
            vulnerable to employer abuse.  A recent study by the National  
            Employment Law Project, entitled "Workers Rights on ICE:  How  
            Immigration Reform can Stop Retaliation and Advance Labor  
            Rights," found widespread and pervasive abuses against  
            immigrant workers.  76 [percent] of undocumented workers  
            surveyed worked off the clock without pay; 85 [percent] did  
            not receiver overtime.  29 [percent] of California workers  
            killed in industrial accidents were immigrants.

                                                                      



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          2.   Discrimination and retaliation based on unfair  
          immigration-related practices  

          Existing law prohibits employers from withholding an employee's  
          wages and prohibits discrimination, retaliation, and adverse  
          actions by an employer against an employee or job applicant who  
          exercises his or her rights under the law.  (Lab. Code Sec. 200  
          et seq.)  This bill would also prohibit an employer or any other  
          person or entity from engaging in, or directing another person  
          or entity to engage in, unfair immigration-related practices  
          against any person for the purpose of, or with the intent of,  
          retaliating against any person for exercising any right  
          protected under the Labor Code or by any local ordinance  
          applicable to employees.  

          CLF asserts that "[s]o long as workers are willing to endure  
          widespread wage theft and unsafe working conditions, these  
          employers do not ask about immigration status.  It is only when  
          workers speak out about unfair or illegal conditions that  
          employers turn to tools like real or threatened immigration  
          audits, Immigration & Customs Enforcement raids, and  
          implementation of e-verify retaliation.  In fact, the report  
          provides multiple examples of employers using immigration  
          threats to try to get away with wage theft."

          In a recent report by the National Employment Law Project  
          (NELP), the following examples of employer misconduct were  
          identified:

                 An employer in Garden Grove, California falsely accuses  
               a day laborer of robbery in order to avoid paying him for  
               work performed.  Local police officers arrest the worker.   
               Although the police find no merit to the charges, he is  
               turned over to Immigration and Customs Enforcement (ICE).
                 After workers at a Latino grocery store chain in the San  
               Francisco Bay Area attempt to organize a union, the  
               employer announces that it needs to re-verify workers'  
               authorization and that it will enroll in the voluntary  
               E-Verify program, leading to widespread fear.
                 After the California Labor Commissioner found that a San  
               Jose, California employer owed an immigrant worker $50,000  
               for unpaid wages, the employer harasses the worker in his  
               home and threatens to report him to immigration.  (Cho and  
               Smith, Workers' Rights on ICE:  How Immigration Reform Can  
               Stop Retaliation and Advance Labor Rights, National  
               Employment Law Project (Feb. 2013)  
                                                                      



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                [as of June  
               23, 2013], p. 1.)

          The California Rural Legal Assistance Foundation (CRLA), in  
          support, provided several examples of immigrant workers with  
          wage and sexual discrimination claims against their employers  
          but who were afraid of retaliation from the employers: 

             1.   Monterey County - "A female strawberry harvester came to  
               [the] office primarily to complain about sexual harassment  
               by the supervisor of [a] mid-size strawberry employer.   
               During the interview, we determined that she had other  
                                                                          meritorious wage and hour claims, specifically that the  
               crew never received the afternoon rest period and their  
               meal periods were always less than 30 minutes.  Because the  
               sexual harassment claim was also strong, we advised her  
               that we would be willing to pursue both the sexual  
               harassment claim and the rest & meal period claims.  She  
               told us she was afraid of the negative repercussions that  
               pursuing anything could have on her family - her father  
               worked at the company as an assistant row boss, and her  
               brother was a harvester - as well as some of her  
               co-workers.  She told us she needed to think about her  
               options and asked us not to make any contact with the  
               company until she made up her mind about what to do.  She  
               never returned to our office and never responded to our  
               follow-up phone call.
             2.   Fresno County - "In 2005 I was approached by a female  
               farm worker who claimed she was being sexually harassed by  
               her foreman while she was weeding cotton out in Huron.  The  
               harassment was mostly verbal references to her body parts  
               and there was some invasion of her personal space in that  
               he made sure to stand with his pelvis near her back and  
               buttock area.  I remember telling her about internal  
               complaint procedures and witnesses etc.  She looked at me  
               as if I was unreal and told me that she . . . would rather  
               quit then to be subjected to what an ex-coworker went  
               through when she went to the office, (this is a big farm  
               labor service company), to complain about the foreman's  
               behavior.  She went on to say that the complaining coworker  
               quit and mysteriously her brother was no longer called back  
               to work.  The farm worker went on to say that she had a  
               cousin as a co-worker who had a family to feed.  She wanted  
               to do something but did not want her cousin to lose his  
               job."
                                                                      



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          The federal Immigration Reform and Control Act (IRCA) prohibits  
          unfair immigration-related employment practices, including,  
          intimidation, threats, coercion, or retaliation (these acts are  
          considered discrimination under IRCA) against any individual for  
          the purpose of interfering with any right or privilege provided  
          under IRCA or because the individual intends to file or has  
          filed a charge or complaint, testified, or participated in an  
          investigation, proceeding or hearing, and immigration-related  
          employment practices such as discriminating on the basis of  
          citizenship or national origin.  (8 U.S.C.S. 1324b(g)(2)(B).)   
          While IRCA only provides this protection for citizens and  
          permanent resident immigrants, this bill provides similar  
          anti-discrimination and retaliation protections based on  
          California's existing protections for workers who make claims  
          under the Labor Code, which are available to all California  
          employees, regardless of citizenship or immigration status.   
          This bill, by further prohibiting unfair immigration-related  
          practices, will strengthen existing anti-retaliation  
          protections.  

          3.  Private right of action and remedies relating to unfair  
            immigration-related practices
           
          This bill would provide that an employee who is the subject of  
          an unfair immigration-related practice may bring a civil action  
          for equitable relief and any damages or penalties, and, upon  
          prevailing, shall recover reasonable attorney's fees and costs,  
          including any expert witness costs.  Existing law provides that  
          an employee who prevails against an employer that has  
          discriminated against the employee for pursuing the employee's  
          rights under the Labor Code is entitled to reinstatement,  
          reimbursement for lost wages, and reasonable attorney's fees.  

          CLF argues that "[t]he reality is that immigration-related  
          retaliation and threats undermine workers' rights for all  
          workers. . . . AB 263 will prohibit employers from engaging in  
          immigration-related retaliation against workers who have spoken  
          up about unpaid wages, unsafe working conditions, or unfair  
          treatment.  The State has both a right and an obligation to  
          protect workers and to ensure that basic labor laws can be  
          enforced.  Employers who engage in these forms of retaliation  
          must be held accountable. . . . We cannot rebuild the middle  
          class without ensuring that basic labor laws protect all workers  
          and then when workers' rights are violated, they can speak out  
          free from fear.  AB 263 targets one of the most powerful and  
                                                                      



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          effective weapons employers have to keep workers silent and  
          living in the shadows."

          Notably, this bill does not provide for reinstatement of the  
          employee given that, even if the employer is found to have  
          retaliated against the employee using unfair immigration-related  
          practices, the employer is prohibited from reinstating an  
          employee who is not lawfully entitled to work in the United  
          States.  However, this bill would provide the employee with  
          equitable relief and damages or penalties.  Further, this bill  
          would require the court to award reasonable attorney's fees to  
          the employee, which allows attorneys to take on cases for  
          individuals who otherwise could not afford an attorney, thus,  
          facilitating the enforcement of these Labor Code violations.

          4.  Tiered business license suspension and revocation provisions
           
          This bill would provide a tiered business license suspension and  
          revocation scheme for employer's who continually violate the  
          prohibition on unfair immigration-related practices provided in  
          this bill, as follows: 
           for a first violation, the employer's licenses will be  
            suspended for 14 days;  
           for a second violation, the employer's licenses will be  
            suspended for 30 days;
           for a third violation, the employer's licenses will be  
            suspended for 90 days; and
           for a fourth violation, or if the court establishes a pattern  
            or practice of willful violations, the employer's licenses  
            will be permanently revoked.  

          This bill would provide that if the violating party does not  
          hold a license specific to the business location or locations  
          where the unfair immigration-related practice occurred, but a  
          license is necessary to operate the violating party's business  
          in general, the licenses that are subject to suspension are all  
          licenses that are held by the violating party at the violating  
          party's primary place of business.

          CLF states that "[a]mendments taken in the Appropriations  
          Committee address the major issue raised by the opposition which  
          was that the penalty for violations was too severe.  Rather than  
          suspension of a business license after two violations, AB 263  
          now has a four step process so that an employer will have ample  
          opportunity to address retaliation before the ultimate  
          punishment is imposed."
                                                                      



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          However, the California Employment Law Council (CELC), in  
          continued opposition, asserts that "one major problem with AB  
          263 is that the bill provides draconian penalties for  
          violations, even when an employer has no knowledge of the  
          actions of supervisors.  Under the bill, courts would be  
          required to suspend all licenses possessed by the business for a  
          first violation, and be required to suspend the business for 60  
          and 90 days for second and third violations.  A fourth violation  
          would result in the permanent revocation of all licenses  
          possessed by the business, except for professional licenses.   
          This would appear to require a court, for example, to suspend  
          operations of the business for violations by a rogue supervisor  
          of a large employer, for actions taken without the knowledge or  
          consent of the employer, and even if the supervisor were  
          terminated for the violations.  Remarkably, the 'licenses'  
          suspended or revoked extend even to the articles of  
          incorporation of the business.  Suspended corporation documents  
          literally would mean that the business would lack authority to  
          act on routine matters affecting the entity.  The provisions of  
          AB 263 could cause hardworking, completely innocent employees to  
          lose jobs, and harm California's business climate."

          A coalition of business groups, also in opposition, reiterates  
          these concerns of CELC, and notes that "[u]nder AB 263, if this  
          isolated incident that involved at least four employees  
          occurred, the business could permanently lose all of its  
          business licenses necessary to operate in California, even if  
          the employer disciplined or terminated the rogue.  Such a harsh  
          penalty not only impacts the actual employer, but also any other  
          employees who are working for that employer."

          Although the CELC argues the suspension provisions in this bill  
          are severe, those provisions would be a lawful method to deter  
          unfair immigration-related practices against employees.  In  
          Chamber of Commerce of the United States of America v. Whiting  
          (2010) 131 S. Ct. 1968, the court reviewed the Legal Arizona  
          Workers Act of 2007 (LAWA), which provided that the licenses of  
          state employers that knowingly or intentionally employ  
          unauthorized aliens may be, and in certain circumstances must  
          be, suspended or revoked.  The question at issue was whether  
          LAWA was preempted by IRCA, which provides its own comprehensive  
          federal statutory scheme for regulation of immigration and  
          naturalization.  (Id. at p. 1973.)  The court stated that "IRCA  
          expressly preempts States from imposing 'civil or criminal  
          sanctions' on those who employ unauthorized aliens, 'other than  
                                                                      



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          through licensing and similar laws.'  8 U.S.C. [Sec.]  
          1324a(h)(2).  The Arizona law, on its face, purports to impose  
          sanctions through licensing laws.  The state law authorizes  
          state courts to suspend or revoke an employer's business  
          licenses if the employer knowingly or intentionally employs an  
          unauthorized alien."  (Id. at pp. 1977-1978.)  Further, the  
          court noted that "[a] license is a 'right or permission granted  
          in accordance with law . . . to engage in some business or  
          occupation, to do some act, or to engage in some transaction  
          which but for such license would be unlawful.  [Citation  
          omitted.]  Articles of incorporation and certificates of  
          partnership allow the formation of legal entities and permit  
          them as such to engage in business and transactions 'which but  
          for such' authorization 'would be unlawful.'"  (Ibid.)  The  
          court held that "IRCA expressly preempts some state powers  
          dealing with the employment of unauthorized aliens and it  
          expressly preserves others.  We hold that Arizona's licensing  
          law falls well within the confines of the authority Congress  
          chose to leave to the States and therefore is not expressly  
          preempted."  (Id. at p. 1981.)

          This bill does not address the employment of an undocumented  
          worker as in the Whiting case, but, instead, provides that an  
          employer is prohibited from discrimination, retaliation, and  
          adverse actions against an employee based upon unfair  
          immigration-related practices.  However, the Whiting case is  
          instructive in that the licensing scheme provided in this bill  
          would not be preempted by IRCA. 

          To address CELC's concerns that an employer would be severely  
          punished for the acts of a rogue supervisor, the author has  
          requested to amend the bill to provide judicial discretion with  
          regard to a license suspension for a first violation.  This  
          provision would allow the court to consider whether a rogue  
          supervisor of a large employer took unlawful actions against  
          employees without the knowledge or consent of the employer.   
          This provision would also allow the court to consider the impact  
          of a license suspension on the employees working for the  
          employer.  However, once the employer is charged with a first  
          violation, that employer would be on notice of misconduct within  
          the business.  The bill would maintain the required license  
          suspension/revocation for subsequent violations to accomplish  
          the purpose of the bill - deterrence of immigration-related  
          retaliation.

             Author's amendment  :
                                                                      



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            On page 8, in line 11, remove and replace "shall" with "may,  
            in the court's discretion,"

          5.  Civil penalties and private right of action for  
            discrimination, retaliation, and adverse action claims  

          Existing law prohibits discrimination against an employee or job  
          applicant for exercising his or her rights, including initiating  
          an action or testifying in any proceeding thereto, delineated  
          under the Labor Code.  (Lab. Code Sec. 98.6.)  This bill would  
          clarify that the employee or job applicant is also protected  
          under that provision from retaliation or adverse actions by the  
          employer.  This bill would also authorize, in addition to any  
          other remedies available, a civil penalty, not to exceed $10,000  
          per employee for each violation, to be imposed against an  
          employer who unlawfully discriminates, retaliates, or takes  
          adverse action against an employee making a claim under the  
          Labor Code, as specified.  This bill would also clarify that an  
          employee or job applicant is not required to exhaust  
          administrative remedies or procedures before bringing a civil  
          action to enforce the prohibition against discriminating,  
          retaliating, or taking adverse action against an employee making  
          a claim under the Labor Code.  

          Proponents of this bill argue that such penalties and a private  
          right of action for harmed workers are warranted in order to  
          effectively deter employers from deliberately misclassifying  
          employees as independent contractors.  The proponents argue  
          that, because governmental entities do not have the resources or  
          time to go after all employers who abuse and threaten  
          undocumented workers, and employers know this, significant  
          penalties and a private right of action are the most effective  
          deterrents to the wrongful conduct.  

          It is important to note that, as discussed above, IRCA provides  
          anti-discrimination/ retaliation protections to workers based on  
          citizenship and immigration status.  While IRCA protects  
          immigrant workers from being discriminated against in the hiring  
          or firing process, based upon whether the worker is a United  
          States citizen, this bill on the other hand, provides protection  
          for workers against employers who use retaliation tactics to  
          deter workers from filing lawful claims (i.e., for wages,  
          overtime, contractual benefits, or protection to organize) under  
          California laws.  Further, this bill specifies that its  
          provisions are severable, and if any of its provisions are held  
                                                                      



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          invalid, that invalidity shall not affect other provisions or  
          applications that can be given effect without the invalid  
          provision or application.  Although IRCA and this bill each  
          contemplate different retaliation/discrimination claims, to the  
          extent a court finds that this bill could impose penalties  
          against an employer based on a discrimination claim otherwise  
          protected under IRCA, the state penalty could be preempted by  
          IRCA, which provides its own penalties.  

          6.  Extending whistleblower protection
           
          In a recent Assembly Committee on Labor and Employment  
          informational hearing, employees testified that they feared  
          retribution by their employers for making claims against their  
          employers.  These claims included seeking full payment of wages  
          owed to the employees and prohibiting employees from  
          participating in union meetings.  The employees testified that  
          they feared that, by testifying at the committee hearing and  
          exposing the egregious conduct perpetrated by their employers,  
          they would face termination by their employers or be reported by  
          their employers to immigration authorities.  

          Existing law, known as the Whistleblower Protection Statute  
          (WPS), prohibits an employer from preventing an employee from  
          disclosing information, or retaliating against an employee who  
          discloses information to a government or law enforcement agency  
          where the employee has reasonable cause to believe that the  
          information discloses a violation of state or federal statute,  
          or a violation or noncompliance with a state or federal rule or  
          regulation.  (Lab. Code Sec. 1102.5.)  This bill would  
          additionally prohibit any other person or entity from preventing  
          an employee from disclosing information to a government or law  
          enforcement agency regarding employer violations of the law.

          Proponents assert that "those who might be willing to act as  
          whistleblowers and expose unfair and illegal treatment worry  
          they will be the cause of serious harm to their co-workers for  
          calling attention to abuses.  Meanwhile, employers who are  
          following the law are at a competitive disadvantage against  
          those that exploit workers."

          This bill seeks to encourage individuals to expose unlawful  
          conduct, which furthers the underlying purpose of the WPS.

          7.  Additional opposition concerns  

                                                                      



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          As discussed above, CELC and a coalition of business groups are  
          opposed to the license suspension/revocation scheme.  (See  
          Comment 4.)   Save Our State, in opposition, writes:

            AB 263 is being offered in a disguised attempt to dissuade  
            employers from reporting illegal aliens to ICE or other  
            federal immigration authorities.  While it may serve a small  
            genuine interest in giving pause to a few unscrupulous  
            employers who might use federal law as a tool of oppression,  
            there is an overriding interest in the enforcement of federal  
            immigration laws.  Employers, and anyone for that matter,  
            should not be afraid to report an illegal alien to  
            authorities.  Further, the state of California should never  
            enact a law that causes any person, employer or otherwise, to  
            fear reporting a crime or civil law violation.  It's just bad  
            police for a government to consider this.
            . . .
            We might point out that California's Anti-SLAPP statutes are  
            founded in the first amendment's right to free speech, and  
            that even altering the Anti-SLAPP statutes will not make this  
            piece of legislation constitutionally sound.  The state  
            legislature has been in an extraordinary rush to generate an  
            immigration policy of its' own, while hypocritically  
            denouncing other states who do the same.  It is time to  
            concentrate on native born California citizens rights, and let  
            immigration law be managed by the people through their  
            congressional representation, as it was meant to be. . . .  

          A coalition of business groups also argues that the $10,000  
          penalty per employee for any retaliation or discrimination in  
          this bill, in combination with unpaid wages and various other  
          statutory penalties, would create a windfall for the employee,  
          and potential financial devastation to the employer.   
          Furthermore, the business coalition argues that it is  
          inappropriate to create new rights and liability for "any  
          person" who retaliates against an employee for reporting an  
          alleged violation of law because the Labor Code is primarily  
          limited to regulating the employer/employee relationship, not  
          the relationship between an employer and member of the public,  
          or any other "person or entity."

          8.  Chaptering-out issues 
           
          Staff notes that SB 666 (Steinberg) contains similar  
          anti-retaliation protections regarding immigration-related  
          practices and would amend sections amended by this bill.   
                                                                      



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          Additionally, this bill contains provisions regarding the  
          Whistleblower Protection Act that are in conflict with SB 496  
          (Wright).  To avoid any chaptering-out issues, the provisions of  
          this bill should be conformed as necessary before this bill  
          leaves the Senate.


           Support  :  American Federation of State, County and Municipal  
          Employees, AFL-CIO; California Catholic Conference, Inc.;  
          California Conference Board of the Amalgamated Transit Union;  
          California Conference of Machinists; California Federation of  
          Teachers AFT, AFL-CIO; California Nurses Association; California  
          Rural Legal Assistance Foundation; California Teachers  
          Association; California Teamsters Public Affairs Council;  
          Coalition for Humane Immigrant Rights of Los Angeles; Engineers  
          and Scientists of California; International Longshore and  
          Warehouse Union; National Association of Social Workers -  
          California Chapter; Professional & Technical Engineers, Local  
          21; UAW Local 5810; UNITE HERE!; United Food and Commercial  
          Workers Union, Western States Council; Utility Workers Union of  
          America, Local 132

           Opposition  :  Agricultural Council of California; Associated  
          Builders and Contractors of California; California Association  
          of Winegrape Growers; California Chamber of Commerce; California  
          Chapter of American Fence Association; California Employment Law  
          Council; California Farm Bureau Federation; California Fence  
          Contractors' Association; California Grocers Association;  
          California Hotel and Lodging Association; California League of  
          Food Processors; California Manufacturers and Technology  
          Association; California Restaurant Association; Construction  
          Employers' Association; Engineering Contractor's Association;  
          Flasher Barricade Association; Marin Builders Association;  
          National Federation of Independent Business; Save Our State;  
          Western Electrical Contractors Association, Inc.; Western  
          Growers Association

                                        HISTORY
           
           Source  :  California Labor Federation, AFL-CIO

           Related Pending Legislation  :

          SB 496 (Wright), among other things, would revise the  
          Whistleblower Protection Act and is currently in the Assembly  
          Committee on Appropriations.
                                                                      



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          SB 666 (Steinberg), among other things, contains similar  
          anti-retaliation protections regarding immigration-related  
          practices.  SB 666 is currently in the Assembly Committee on  
          Appropriations.  

           Prior Legislation  :  None Known

           Prior Vote  :

          Senate Committee on Labor and Industrial Relations (Ayes 3, Noes  
                                                           0)
          Assembly Floor (Ayes 52, Noes 23)
          Assembly Committee on Appropriations (Ayes 12, Noes 4)
          Assembly Committee on Labor and Employment (Ayes 5, Noes 1)
          Assembly Committee on Judiciary (Ayes 7, Noes 2)

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