BILL ANALYSIS Ó SB 556 Page 1 Date of Hearing: June 25, 2013 ASSEMBLY COMMITTEE ON JUDICIARY Bob Wieckowski, Chair SB 556 (Corbett) - As Amended: June 19, 2013 As Proposed to Be Amended SENATE VOTE : 24-13 SUBJECT : CONTRACTOR DISCLOSURES: PUBLIC AGENCIES KEY ISSUE : IN ORDER TO PROMOTE TRANSPARENCY IN THE PROVISION OF COMMUNITY SERVICES, SHOULD ENTITIES CONTRACTING WITH PUBLIC AGENCIES TO PROVIDE SERVICES TO THE PUBLIC BE REQUIRED TO DISCLOSE ON THEIR UNIFORMS AND VEHICLES THAT THEIR EMPLOYEES ARE NOT IN FACT GOVERNMENT EMPLOYEES? FISCAL EFFECT : As currently in print this bill is keyed non-fiscal. SYNOPSIS According to the author, this bill is needed to ensure that members of the public can visually distinguish between government employees and non-government employees who increasingly are subcontracted to perform traditional public services once almost exclusively the domain of true public employees. This bill seeks to prevent confusion or misperceptions that result, proponents contend, when private contractors hired by public agencies perform community work or services and use uniforms or vehicles appearing very similar to those used only by employees of the public agency. In those circumstances, this bill seeks to promote transparency by requiring the uniform or vehicle conspicuously display a disclosure that the contractor or employee is not a government employee. Proposed technical amendments by the author clarify the author's intent to allow violations of this bill to be enforced by the remedies provided by the California Legal Remedies Act. The bill is sponsored by the California Professional Firefighters and the California Labor Federation, and supported by other organized labor. These proponents contend that the public has the right to know if a particular worker providing a service that appears public in nature is in fact a public employee, or is instead an independent contractor, SB 556 Page 2 subcontracted worker, or other non-governmental employee not working for a public agency. The bill is strongly opposed by many local government entities, including, among others, the California State Association of Counties and the League of California Cities. These opponents contend generally that the bill is a solution in search of a problem, and furthermore, that the use of similar uniforms and vehicles by contractors providing community services should be a matter of local control. Finally, American Medical Response (AMR), a large contractor of paramedics and ambulance operators to local governments, also opposes the bill, stating that in its field of work, the utilization of county patches and identifying marks provide assurance to the patient and family that its employees are responding under the authority of the county and are licensed to practice medicine in that jurisdiction. SUMMARY : Prohibits nongovernmental persons or entities contracting with public agencies from displaying a seal or emblem on a uniform or vehicle, as specified, unless a disclosure statement is also conspicuously displayed identifying the uniform wearer or vehicle operator as not a government employee. Specifically, this bill : 1)Makes it unlawful for a person, firm, corporation, or association that is a nongovernmental entity and contracts to perform labor or services for a public agency to display on a vehicle a seal, emblem, insignia, trade or brand name, or any other term, symbol, or content that reasonably could be interpreted or construed as implying that the labor or services are being provided by employees of the public agency, unless the vehicle conspicuously displays the following disclosure: "THE OPERATOR OF THIS VEHICLE IS NOT A GOVERNMENT EMPLOYEE." 2)Makes it unlawful for a person or an employee of a person, firm, corporation, or association that is a nongovernmental entity and contracts to perform labor or services for a public agency to wear a uniform bearing a seal, emblem, insignia, trade or brand name, or any other term, symbol, or content that together with the appearance of the uniform reasonably could be interpreted or construed as implying that the labor or services are being provided by employees of the public agency, unless the uniform conspicuously displays the following disclosure: "NOT A GOVERNMENT EMPLOYEE." SB 556 Page 3 3)Clarifies that the term "conspicuously displays" means to display in a font size that is at least the same size as the largest font size otherwise displayed on the vehicle or uniform, in a manner that clearly calls attention to the language, and located in close proximity to the seal, emblem, insignia, trade or brand name, or any other term, symbol, or content as described in this section, so as to be clearly associated with that seal, emblem, insignia, trade or brand name, or any other term, symbol, or content. 4)Clarifies that an identifying mark affixed to a uniform as required by state or federal law, and a local agency regulating the activity of the person, firm, corporation, or association shall not be construed as implying that the labor or services are being provided by employees of the public agency. 5)Provides that violations of this act shall be subject to the remedies provided in the Consumers Legal Remedies Act (Title 1.5 (commencing with Section 1750) of Part 4), and that the duties, rights, and remedies provided in this bill are in addition to any other duties, rights, and remedies provided by state law. EXISTING LAW : 1)Authorizes an employer, without prohibition, to prescribe the weight, color, quality, texture, style, form and make of uniforms required to be worn by his or her employees. (Labor Code Section 452.) 2)Prohibits unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer, including but not limited to the following: a) Misrepresenting the source, sponsorship, approval, or certification of goods or services. b) Misrepresenting the affiliation, connection, or association with, or certification by, another. c) Using deceptive representations or designations of geographic origin in connection with goods or services. d) Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a SB 556 Page 4 sponsorship, approval, status, affiliation, or connection which he or she does not have. (Civil Code Section 1770. All further references are to this code unless otherwise stated.) 3)Allows a person to bring an action for injunctive relief to enforce alleged violations of the above prohibition on unfair or deceptive acts. Also allows a person to bring an action for damages for such violations, but only if, 30 days or more before commencing the action, the plaintiff has notified the alleged violator of the violation and demanded that he or she correct the violation, and no appropriate correction was made within 30 days of the notification. (Section 1782.) COMMENTS : This bill seeks to prohibit private contractors who contract with public agencies from displaying a seal or emblem on a uniform or vehicle, as specified, that reasonably could be interpreted as implying that the contracted labor or services are being provided by employees of the public agency-unless, that is, a disclosure statement is also conspicuously displayed on the uniform or vehicle identifying the private contractor as "Not A Government Employee." Proposed technical amendments by the author clarify the author's intent to allow violations of this bill to be enforced by the remedies provided by the California Legal Remedies Act. Stated Need for the Bill. This bill is co-sponsored by the California Labor Federation and the California Professional Firefighters. According to the Firefighters: Public awareness of who is actually providing critical public services is essential to ensuring accountability. Indeed, accountability is especially important when public agency subcontractors seek to convey a particular image or branded reputation through the use of an agency's "logo." Every time a public agency firefighter puts on their uniform, they are representing a proud, highly-skilled profession. To them, firefighting is more than just a job - it is a calling that is supported by "gold standard" training. In building a better fire service for all Californians, the public fire agency image and reputation must be preserved. To do this, misrepresentation of the source of these essential services must cease. Today, given the growing California subcontracted SB 556 Page 5 workforce, the relationship between the worker who shows up at the front door and the company that sent them can be confusing to California consumers. As such, the state has a responsibility to prevent unfair or deceptive practices that may result in confusing Californians when an otherwise government-provided service is requested or required. And, when it comes to those who render essential public services, including critical, property and/or life-saving services, accountability becomes all the more significant. This bill seeks to promote transparency and inform the public through greater disclosure requirements. According to the author, this bill is needed to ensure that members of the public can visually distinguish between government employees and non-government employees who increasingly are subcontracted to perform traditional public services once almost exclusively the domain of true public employees. Proponents assert that the public has the right to know if a particular worker providing a service that appears public in nature is in fact a public employee, or is instead an independent contractor, subcontracted worker, or other non-governmental employee not working for a public agency. This matters, they contend, because in certain situations, the public employee is required to have greater training and is held to a higher degree of accountability to the public by virtue of being an employee of a public agency, rather than that of a private employer or as an independent contractor. Accordingly, the bill seeks to prevent confusion or misperceptions that result, proponents contend, when private contractors hired by public agencies perform community work or services and use uniforms or vehicles appearing very similar to those used only by employees of the public agency. In those circumstances, this bill seeks to promote transparency by requiring the uniform or vehicle conspicuously display a disclosure that the contractor or employee is not a government employee. This bill is opposed by a number of groups representing local government entities, including, among others, the California State Association of Counties, the League of California Cities, and the California Special Districts Association. These opponents contend generally that the bill is unnecessary and is a solution in search of a problem, and furthermore, that a policy of local control that allows similar uniforms and vehicles to be used by contractors serves a useful purpose. According to the joint letter submitted by these opponents: SB 556 Page 6 Many public agencies that contract for services specify uniform requirements and/or affixing logos to a vehicle in their written contracts with a service provider. These uniform requirements are oftentimes done for the purpose of ensuring that the public knows who the contractor is serving and for identifying regional operations during a major disaster or mutual aid request from a public agency. This bill would eliminate public agencies' ability to determine what works best locally. Further, we are unaware of any problems - in general or specifically -- associated with a private contractor wearing a similar uniform or having a similar vehicle that cause confusion for the public and necessitate a need for this change in law. As recently amended, this bill conditionally requires specified disclosures to appear on uniforms and vehicles, but no longer changes statutory liability provisions related to ostensible agency. Under this bill as amended June 19, 2013, a person or company that is a nongovernmental entity and contracts to perform labor or services for a public agency must abide by specific disclosure requirements with respect to that entity's vehicles and uniforms. Unless the vehicle at issue conspicuously displays the words "THE OPERATOR OF THIS VEHICLE IS NOT A GOVERNMENT EMPLOYEE," the contracting nongovernmental entity may not display on the vehicle any seal, emblem, or other content that "reasonably could be interpreted or construed as implying that" the service is being provided by a public employee. Similarly, unless the uniform at issue conspicuously displays the words "NOT A GOVERNMENT EMPLOYEE", the contracting entity and its workers are prohibited from wearing any uniform that displays any seal, emblem, or other content that reasonably could be interpreted or construed as implying that the labor or service is being provided by a public employee. The recent amendments replace the previous contents of the bill, which would have made public agencies that contract for services with a contractor jointly and severally liable for any damages caused during performance of the contract if, at the time of the damage, the contractor was authorized or required by the public agency to wear a uniform or operate a vehicle that by its similar appearance would have caused members of the public to believe that the contractor was an agent of the public entity. SB 556 Page 7 In short, the bill no longer provides any rule for ostensible agency liability, and instead simply requires disclosure statements on vehicles and uniforms used by nongovernmental entities if specified conditions are true. Because of these amendments, the Civil Justice Association of California has officially removed its opposition to the bill. As proposed to be amended, this bill incorporates the remedies of, but no longer amends, the California Legal Remedies Act (CLRA). According to the author, the June 19, 2013 amendments that shift the contents of the bill from the Labor Code to the Civil Code were also intended to incorporate the remedies of the California Legal Remedies Act (Title 1.5 of Part 4 of the Civil Code, commencing with Section 1750) for enforcement of violations of the bill. The CLRA establishes a nonexclusive statutory remedy for unfair methods of competition and unfair acts or practices in various consumer transactions, as specified. According to the author, the CLRA offers an appropriate set of remedies for violations of the bill-remedies which prioritize disclosure and display requirements over the recovery of money damages. Specifically, the CLRA allows an action for injunctive relief to enjoin acts that do not comply with the bill, in this case non-compliance with the uniform and vehicle-related display and disclosure requirements of the bill. In addition, the CLRA requires notice and opportunity to correct for a period of thirty days before any action for damages is allowed, including cases where the plaintiff seeks to amend a complaint for injunctive relief to include a request for damages. In order to achieve the author's stated objectives and properly apply the remedies provided in the CLRA to violations of this bill but without altering the CLRA itself, the author proposes the following technical amendments : In the title, strike "Section 1771" and insert "Title 18 (commencing with Section 3273) of Part 4 of Division 3 of" On page 2, line 1, strike "1771" and insert "3273" On page 2, line 2, strike "1771" and insert "3273" On page 3, after line 13 insert the following: "(e) (1) Violations of this section shall be subject to SB 556 Page 8 the remedies provided in the Consumers Legal Remedies Act (Title 1.5 (commencing with Section 1750) of Part 4). (2) The duties, rights, and remedies provided in this section are in addition to any other duties, rights, and remedies provided by state law." OTHER ARGUMENTS IN OPPOSITION : As proposed to be amended, this bill continues to be opposed by American Medical Response (AMR), who describes itself as California's largest provider of 9-1-1 emergency ambulance services and private employer of paramedics and emergency medical technicians (EMT). AMR states: (The sponsors of the bill) fail to provide any evidence that the current appearance of our workforce uniforms or ambulances poses any threat to patient or public safety. When an AMR crew arrives at the scene of a medical emergency, it is clear who they work for. Our logo and name are prominently displayed in multiple locations on our ambulances. AMR patches are clearly visible on our crew's uniforms, and the patient ultimately receives a bill issued by AMR with our phone number and address. We also receive thousands and thousands of letters every year from patients thanking us for our services which clearly indicates the patient was aware that the crew treating them was working for AMR. In fact, the utilization of county patches and identifying marks, which are used in tandem with AMR patches and logos (see attached images), provide assurance to the patient and family that we are responding under the authority of the county, and are licensed to practice medicine in their jurisdiction. County identifiers also help during mutual aid and multi-casualty events, and as the contracted ambulance service provider under FEMA, assist AMR during mass disaster deployments. In addition, as one of the largest custodians of State Disaster Medical Support Units, AMR would need to consider relinquishing control and responsibility of these vehicles back to the state rather than incur any labeling costs or liability associated with the requirements of this bill. What's more, SB 556 may also prevent AMR and other providers from establishing mutual aid agreements with public agencies outside our areas of operation since there is currently no exception for mutual aid response, which accounts for thousands of SB 556 Page 9 emergency calls a year for private emergency ambulance providers. Previous Related Legislation : AB 2389 (Lowenthal) of 2012 would have prohibited a contractor providing services that require entering the residence or place of lodging of a member of the public from using a uniform that bears the name or logo of the contracting entity, unless the uniform meets certain disclosure requirements. AB 2389 was vetoed by Governor Brown. REGISTERED SUPPORT / OPPOSITION : Support California Labor Federation (co-sponsor) California Professional Firefighters (co-sponsor) California Community College Independents Laborers' Locals 777 & 792 United Transportation Union Opposition American Medical Response (AMR) Association of California Healthcare Districts California Association of Joint Powers Authorities California Special Districts Association California State Association of Counties City of Thousand Oaks League of California Cities Rural Country Representatives of California CSAC Excess Insurance Authority Urban Counties Caucus Analysis Prepared by : Anthony Lew / JUD. / (916) 319-2334