BILL ANALYSIS Ó
SB 263
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Date of Hearing: June 25, 2014
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Roger Hernández, Chair
SB 263 (Monning) - As Amended: January 21, 2014
SENATE VOTE : (vote not relevant)
SUBJECT : Private employment: public transit employees.
SUMMARY : Extends a ten percent bid preference for bidders on
public transit contracts who agree to retain the employees of
the prior contractor of subcontractor to all public transit
contracts awarded by the State of California.
EXISTING LAW :
1)Requires that when a public entity puts out to bid a public
service contract on public transit services, the bidder must
state as part of the bid for a service contract whether or not
he or she will retain the employees of the prior contractor or
subcontractor for a period of not less than 90 days.
2)Requires that an awarding authority letting a service contract
out to bid for public transit services shall give a ten
percent preference to any bidder who agrees to retain the
employees of the prior contractor or subcontractor.
3)Requires a successor contractor or subcontractor for public
transit services who agrees to retain employees must retain
employees who have been employed by the prior contractor or
subcontractors, except for reasonable and substantiated cause,
which includes the particular employee's performance or
conduct while working under the prior contract, as well as or
the employee's failure of any controlled substances and
alcohol test.
4)Requires a successor contractor or subcontractor for public
transit services to make a written offer of employment to each
employee to be rehired. That offer shall state the time
within which the employee must accept that offer, which may
not be less than ten days, and does not need to be at the same
level of wages or benefits as provided by the previous
contractor or subcontractor.
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5)Provides that if the successor contractor or subcontractor for
public transit services determines that fewer employees are
required than were required under the prior contract or
subcontract, the successor contractor must retain qualified
employees by seniority within the job classification. The
successor contractor is permitted to consider licensing
requirements when judging seniority.
6)Provides that an employee who was not offered employment or
who has been discharged in violation of this chapter, or his
or her agent, may bring an action against the successor
contractor or subcontractor in any superior court having
jurisdiction over the successor contractor or subcontractor.
Upon finding a violation of this, the court must order
reinstatement to employment with the successor contractor or
subcontractor and award backpay, including the value of
benefits, for each day of violation, as well as reasonable
attorney fees.
7)Provides that, upon its own motion or upon the request of any
member of the public, an awarding authority may terminate any
service contract if both of the following occur:
a) The contractor or subcontractor has substantially
breached the contract; and
b) The awarding authority holds a public hearing within 30
days of the receipt of the request or its announcement of
its intention to terminate.
8)Provides that a contractor or subcontractor terminated as
described above must be ineligible to bid on or be awarded a
service contract or subcontract with that awarding authority
for a period of not less than one year and not more than three
years, to be determined by the awarding authority.
FISCAL EFFECT : Unknown
COMMENTS : SB 158 (Alarcon), Chapter 103, Statutes of 2003
created the bid preference for
contracted transit services for public agencies.
The author notes that the current ten percent bid preference for
transit contracts applies to all public entities, except to the
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State of California. The author believes that this oversight
deserves to be revisited. The author notes that this oversight
has already led to the lowest bidder of the transit services at
Hearst Castle terminating the employment of the existing
drivers, leading to their unemployment and loss of benefits.
This bill seeks to address this concern by making the ten
percent bid preference for transit contracts also applicable
when the State of California contracts out for transit services.
Supporters argue that the existing bid preference, which impacts
public agencies that contract out for transit services, has a
nearly ten year history of success on the local level.
Supporters note that the law does not protect the wages or
benefits of services, allowing those who seek the contract to
bid the service at any price, but frequently all bidders decide
to hire all of the incumbent employees in order to compete with
the other bidders on a level playing field. Supporters believe
that this bid preference should be extended to state transit
contracts, and they cite the loss of employment and benefits by
drivers formally employed at the Hearst Castle when the transit
services were contracted out.
PRIOR IDENTICAL LEGISLATION :
This bill is identical to the introduced version of SB 232
(Monning) from 2013, which passed this Committee. However, SB
232 was subsequently gut and amended by the author and used for
a different purpose. This bill contains the identical language
that was contained in the introduced version of SB 232.
REGISTERED SUPPORT / OPPOSITION :
Support
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California School Employees Association
California Teamsters Public Affairs Council (sponsor)
Engineers and Scientists of California
International Longshore & Warehouse Union
Professional & Technical Engineers, Local 21
UNITE HERE!
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Utility Workers Union of America, Local 132
Opposition
None on file.
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091