BILL ANALYSIS Ó
AB 465
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
465 (Roger Hernández)
As Amended August 19, 2015
Majority vote
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|ASSEMBLY: | | (May 14, |SENATE: | | (August 24, |
| |45-30 |2015) | |22-15 |2015) |
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Original Committee Reference: L. & E.
SUMMARY: Imposes specified restrictions on contractual waivers of
rights and procedures under the Labor Code.
The Senate amendments:
1)Eliminate a $10,000 civil penalty for violations of this bill.
2)Provide for injunctive relief.
3)Provide that this bill does not apply to persons registered with a
self-regulatory organization as defined by the federal Securities
Exchange Act of 1934 with respect to any requirement that that
individual arbitrate disputes that arise with their employer as
specified under the rules of the self-regulatory organization.
AB 465
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4)Provide that this bill does not apply to an employee who is
individually represented by legal counsel in negotiating the terms
of an agreement to waive any legal right, penalty, remedy, forum,
or procedure for a violation of the Labor Code.
5)Add a severability clause.
6)Make other clarifying changes.
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, American
Federation of Labor and Congress of Industrial Organizations
(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 found a way
to circumvent these avenues. Increasingly, companies are requiring
AB 465
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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: 0001435