BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                       AB 465


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          ASSEMBLY THIRD READING


          AB  
          465 (Roger Hernández)


          As Amended  April 30, 2015


          Majority vote


           -------------------------------------------------------------------- 
          |Committee       |Votes |Ayes                  |Noes                 |
          |                |      |                      |                     |
          |                |      |                      |                     |
          |----------------+------+----------------------+---------------------|
          |Labor           |5-2   |Roger Hernández, Chu, |Harper, Patterson    |
          |                |      |Low, McCarty,         |                     |
          |                |      |Thurmond              |                     |
          |                |      |                      |                     |
          |                |      |                      |                     |
           -------------------------------------------------------------------- 


          SUMMARY:  Imposes specified restrictions on contractual waivers of  
          rights and procedures under the Labor Code.  Specifically, this  
          bill:


          1)Provides that a person shall not require another person to waive  
            any legal right, penalty, remedy, forum, or procedure for a  
            violation of any provision of the Labor Code, as a condition of  
            employment, including the right to file and pursue a civil  
            action or complaint with, or otherwise notify, the Labor  
            Commissioner, state agency, other public prosecutor, law  
            enforcement agency, or any court or other governmental entity.









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          2)Provides that a person shall not threaten, retaliate, or  
            discriminate against another person on the basis that the other  
            person refuses to waive any legal right, penalty, remedy, forum,  
            or procedure for a violation of the Labor Code, including the  
            right to file and pursue a civil action or complaint with, or  
            otherwise notify, the Labor Commissioner, state agency, other  
            public prosecutor, law enforcement agency, or any court or other  
            governmental entity.


          3)Provides that any waiver of any legal right, penalty, remedy,  
            forum, or procedure for a violation of the Labor Code, including  
            the right to file and pursue a civil action or complaint with,  
            or otherwise notify, the Labor Commissioner, state agency, other  
            public prosecutor, law enforcement agency, or any court or other  
            governmental entity shall be knowing and voluntary and in  
            writing, and expressly not made as a condition of employment.


          4)Provides that any waiver of any legal right, penalty, remedy,  
            forum, or procedure for a violation of the Labor Code that is  
            required as a condition of employment shall be deemed  
            involuntary, unconscionable, against public policy, and  
            unenforceable.  Nothing in this subdivision shall affect the  
            enforceability or validity of any other provision of the  
            contract.


          5)Provides that any person who seeks to enforce a waiver of any  
            legal right, penalty, remedy, forum, or procedure for a  
            violation of the Labor Code shall have the burden of proving  
            that the waiver was knowing and voluntary and not made as a  
            condition of employment.


          6)Specifies that this bill shall apply to any agreement to waive  
            any legal right, penalty, remedy, forum, or procedure for a  
            violation of the Labor Code, including an agreement to accept  








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            private arbitration, entered into, altered, modified, renewed,  
            or extended on or after January 1, 2016.


          7)Provides that in addition to any other remedies available, a  
            person who violates this section is liable for a civil penalty  
            not exceeding $10,000 per individual for each violation of this  
            bill and reasonable attorney's fees.


          8)Makes related legislative findings and declarations


          FISCAL EFFECT:  None.  This bill is keyed non-fiscal by the  
          Legislative Counsel.


          COMMENTS:  According to the author and the sponsor, the goal of  
          this bill is to protect workers from being coerced into signing  
          contracts to waive the right to take labor violations to the Labor  
          Commissioner or to court and submit all claims to the employer's  
          arbitrator.  Therefore, this bill is designed to ensure that  
          waivers of important employment rights and procedures arising  
          under California law are made voluntarily and with the consent of  
          the employee.


          This bill largely tracks the provisions of AB 2617 (Weber),  
          Chapter 910, Statutes of 2014, legislation introduced last year  
          and signed into law by Governor Brown, which imposed specified  
          restrictions on future contractual waivers of rights under the  
          Ralph Civil Rights Act and Bane Civil Rights Act.


          This bill is sponsored by the California Labor Federation,  
          AFL-CIO.  They state that there are very few remedies available to  
          most low-wage workers when their rights are violated.  They can  
          file a claim to the Labor Commissioner or they can find access to  
          counsel through a collective legal action.  Yet employers have  








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          found a way to circumvent these avenues.  Increasingly, companies  
          are requiring workers to sign waivers of the right to take claims  
          to the Labor Commissioner or to court and instead requiring them  
          to take any claims to the employer's private arbitrator.  They  
          argue that this bill would provide some basic protections to these  
          workers.  It would require that these agreements be voluntary and  
          not required as a condition of employment.  It would require that  
          a waiver of rights be voluntary.  Lastly, it would prohibit  
          employers from threatening, retaliating, or discriminating against  
          workers for refusing to sign such a waiver.  These are core tenets  
          of contract law and are consistent with the Supreme Court's  
          direction that such contracts should not be entered into under  
          coercion.


          Opponents argue that this bill directly conflicts with prior and  
          recent rulings from both the California and United States Supreme  
          Courts, which have consistently stated any state law that  
          interferes with the Federal Arbitration Act is preempted.   
          Opponents also argue that adequate protections already exist for  
          mandatory, pre-dispute employee arbitration agreements.  Opponents  
          contend that arbitration provides an effective and efficient means  
          to resolve employment-related claims and that this bill will send  
          disputes into the overburdened and underfunded judicial system. 




          Analysis Prepared by:                                               
          Ben Ebbink / L. & E. / (916) 319-2091  FN: 0000329

















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