BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 556
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          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,  








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          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."









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          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  








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               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  








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            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:








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            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.   








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          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  








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                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  








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              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