BILL ANALYSIS Ó
AB 561
Page A
Date of Hearing: April 8, 2015
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Roger Hernández, Chair
AB 561
(Campos) - As Amended March 17, 2015
SUBJECT: Agricultural labor relations
SUMMARY: Makes various changes to the Agricultural Labor
Relations Act. Specifically, this bill:
1)Provides that the general counsel of the Agricultural Labor
Relations Board (ALRB) shall have primary authority with
respect to the calculation and litigation of makewhole awards,
backpay calculations, and other monetary awards to employees
in compliance proceedings before the ALRB.
2)Specifies that the general counsel may be relieved of this
primary authority upon application by a charging party and a
finding by the ALRB that the general counsel has been
negligent in his or her duties or has unreasonably delayed in
processing or litigating the makewhole award, backpay
calculation, or other monetary award.
3)Provides that within one year of an order of the ALRB finding
liability for a makewhole award, backpay calculation, or other
monetary award to employees, the ALRB and general counsel
shall process any compliance decision concerning the award to
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final board order.
4)Requires an employer who petitions for a writ of review or
otherwise appeals or seeks to overturn or stay any order of
the ALRB to post a bond, in the amount of the entire economic
value of the order as determined by the ALRB, to ensure that
employees receive the benefits of the order if the employer
does not prevail. The ALRB shall reasonably determine the
entire economic value of the order based on submissions from
the parties.
FISCAL EFFECT: Unknown
COMMENTS: This bill is sponsored by the United Farm Workers
(UFW), who argues that it will create an expedited process to
help recover back pay and benefits owed to farm workers and
their families. Specifically, the sponsor cites to a case
involving Ace Tomato Company dating back to 1989 (which is still
not resolved) and a related case as highlighting the need for
this bill. Those cases were also the subject of an oversight
hearing by this Committee and Budget Subcommittee No. 4 in 2010.
The sponsor contends that this bill is needed because there may
be future cases where farm worker families are held back
economically by the current law's faulty resolution system.
BRIEF BACKGROUND ON THE AGRICULTURAL LABOR RELATIONS ACT
Collective bargaining rights of private sector employees
generally fall under the exclusive purview of federal labor law
under the National Labor Relations Act (NLRA). However, Section
2(3) of the NLRA explicitly excludes "agricultural laborers"
from the protections of the federal law.
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Therefore, in 1975, the California Legislature passed the
Agricultural Labor Relations Act (Act) guaranteeing certain
rights to California farm workers. The purpose of the Act is to
"ensure peace in the agricultural fields by guaranteeing justice
for all agricultural workers and stability in labor relations."
The Act states that it is the policy of the State of California
to encourage and protect the right of farm workers to act
together to help themselves, to engage in union organizational
activity and to select their own representatives for the purpose
of bargaining with their employer for a contract covering their
wages, hours, and working conditions. The Act prohibits
employers from interfering with these rights, protects the
rights of workers to be free from restraint or coercion by
unions or employers, and it prohibits unions from engaging in
certain types of strikes and picketing.
The agency established to implement the Act is the Agricultural
Labor Relations Board (ALRB), which functions in two primary
manners. First, the ALRB determines and implements, through
secret ballot elections, the right of agricultural employees to
choose whether or not they wish to be represented by a labor
organization for the purpose of collective bargaining with their
employer. Second, the Act gives authority to the ALRB to
investigate, process and take to trial employers or unions who
engage in actions which the Act describes as "unfair labor
practices."
The most significant legislative change to the Act occurred in
2002 when Governor Davis signed two companion pieces of
legislation, SB 1156 and AB 2956. As a result of those bills,
effective January 1, 2003, the Act was amended to provide for
mandatory mediation in selected circumstances where the parties
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have been unable to reach a collective bargaining agreement.
Under that process, the mediator attempts to help the union and
the employer reach agreement on a contract, but if that is not
successful, the mediator issues a report that contains the terms
of a contract.
The mediation process applies only if the employer has employed
25 or more agricultural employees during any calendar week in
the year preceding the filing of the request for mediation. If
the union was certified after January 1, 2003, the mediation
process may be triggered where at least 180 days have elapsed
after the initial demand to bargain. If the union was certified
before January 1, 2003, the process may be triggered 90 days
after a renewed demand to bargain, and where the following
conditions are met: (1) the parties have failed to reach
agreement for at least one year after the union made its initial
demand to bargain; (2) the employer has committed an unfair
labor practice; and (3) the parties have not previously had a
binding contract between them.
BACKGROUND ON THE AGRICULTURAL LABOR RELATIONS BOARD
The ALRB's authority is divided between a Board composed of five
members and a General Counsel, all of whom are appointed by the
Governor and subject to confirmation by the Senate. Together,
they are responsible for the prevention of those practices which
the Act declares to be impediments to the free exercise of
employee rights. When a charge is filed, the General Counsel
conducts an investigation to determine whether an unfair labor
practice has been committed. If he or she believes that there
has been a violation, he or she issues a complaint. The Board
provides for a hearing to determine whether a respondent has
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committed the unfair labor practice alleged in the complaint.
Under the statute, the Board may delegate, and in practice has
delegated, its authority to hear such cases to Administrative
Law Judges (ALJs) who take evidence and make initial
recommendations in the form of written decisions with respect to
issues of fact or law raised by the parties. Any party may
appeal any of the findings, conclusions or recommendations of
the ALJ to the Board, which then reviews the record and issues
its own decision and order in the case. Parties dissatisfied
with the Board's order may petition for review in the Court of
Appeal. Attorneys for the Board defend the decisions rendered
by the Board. If review is not sought or is denied, the Board
may seek enforcement of its order in superior court.
When a final remedial order requires that parties be made whole
for unfair labor practices committed against them, the Board has
followed the practice of the National Labor Relations Board
(NLRB) in holding supplemental proceedings to determine the
amount of liability. These hearings, called compliance
hearings, are also typically held before ALJs who write
recommended decisions for review by the Board. Once again,
parties dissatisfied with the decision and order issued by the
Board upon review of the ALJ's decision may petition for review
of the Board's decision in the Court of Appeal. If the court
denies the petition for review or orders the Board's order in a
compliance case enforced, the Board may seek enforcement in
superior court.
In addition to the Board's authority to issue decisions in
unfair labor practice cases, the Board, through personnel in
various regional offices, is responsible for conducting
elections to determine whether a majority of the employees of an
agricultural employer wishes to be represented by a labor
organization or, if the employees are already so represented, to
determine whether they wish to continue to be represented by
that labor organization, a rival labor organization or no labor
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organization at all. Chapter 5 of the ALRA empowers the Board
to direct an election provided that Board investigation reveals
the existence of a bona fide question concerning such
representation. Because of the seasonal nature of agriculture
and the relatively short periods of peak employment, the Act
provides for a speedy election process, mandating that elections
be held within seven days from the date an election petition is
filed, and within 48 hours after a petition has been filed in
the case of a strike. Any party believing that an election
ought not to have been conducted, or that misconduct occurred
which tended to affect the outcome of the election, or that the
election was otherwise not fairly conducted, may file objections
to the election. The objections are reviewed by the Board's
Executive Secretary, who determines whether they establish a
prima facie case that the election should not have been held or
that the conduct complained of affected its outcome. If such a
prima facie case is found, a hearing is held before an
Administrative Law Judge acting in the capacity of an
Investigative Hearing Examiner to determine whether the Board
should refuse to certify the election as a valid expression of
the will of the employees. The Investigative Hearing Examiner's
conclusions may be appealed to the Board. Except in very limited
circumstances, court review of any decision of the Board in
representation matters may be had only in connection with an
order in an unfair labor practice case which is based upon the
Board's certification.
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THE ACE TOMATO COMPANY AND SAN JOAQUIN TOMATO GROWERS, INC.
CASES
As discussed above, the sponsor points to two related cases
dating from 1989 as highlighting the need for this bill. These
cases were addresses in an oversight hearing in 2010, but at
least one of the cases is still unresolved (over 25 years
later). The following summary of the cases is taken largely
from this Committee's oversight materials from 2010.
Both of these cases arose in 1989 when the employees of two
separate employers went out on strike to protest their pay and
working conditions, and subsequently demanded union
representation. The employers involved were Ace Tomato Company,
Inc. and San Joaquin Tomato Growers, Inc.
What followed is an extremely complex adjudication process
involving both the ALRB and the civil courts, a process that is
not yet completely resolved.
However, a 2010 Administrative Law Judge (ALJ) decision in the
Ace Tomato Company case (issued August 23, 2010) provides a
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concise summary of the general facts as follows<1>:
"In summary, 21 years ago, [the employer's] employees voted
for representation by the [union]. [The employer] filed
objections to the election. More than three years later,
the objections were overruled, and a certification issued.
[The employer] refused to bargain with [the union],
resulting in the filing of an unfair labor practice charge.
The Board issued its decision?, finding an unlawful
refusal to bargain, which [the employer] appealed. The
Court of Appeal summarily denied the appeal, and the case
was released for compliance in March 1995. One aspect of
the Board's Order issued in this case was that [the
employer] preserve and, upon request, make available to the
Board, payroll records to establish any bargaining
makewhole due to the unit employees.
Compliance with the Order was initially assigned to the El
Centro region. The first indication of any attempt to seek
compliance in this matter was a letter to [the employer],
dated almost a year after the case was released, seeking
various information. Among the requests were payroll
records of bargaining unit employees, so that a makewhole
determination could be made. [The employer] did not
furnish those records, instead contending that no makewhole
was due. Despite several subsequent requests, [the
employer] has never produced those records, other than a
small sampling to support this contention. The Board
contemplated seeking enforcement of the request, but never
did so. At the hearing, testimony established that [the
employer] had these records in its possession, including
-------------------------
<1> Although the ALJ decision involved only the Ace Tomato
Company case, which had unique facts and circumstances, the
general factual allegations and procedural process of the two
cases is quite similar. Therefore, this factual summary
(although involving only one case) gives a general overview of
the process that both companion cases followed.
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both its direct hires, and those of the contractor
employees, until about 2004, when they were destroyed.
Responsibility for compliance was transferred to the
Visalia Region, until 2001. The ending date for the
makewhole period was determined, resulting in a fixed
liability of slightly over one year, plus interest. The
Region considered [the employer's] arguments against any
makewhole award and, apparently found merit to them. At
this hearing, [the employer's] counsel testified he was
repeatedly told the Region agreed with his position, and
the case would be closed. Nevertheless, as of April 20,
2001, six years after the case was released for compliance,
no makewhole specification or, alternatively, motion to
close the case without compliance, had issued.
On April 21, 2001, the Board ordered the case transferred
to the General Counsel's office in Sacramento. That office
investigated alternative makewhole formulas and,
apparently, determined to issue a specification based on
such a methodology. Nevertheless, almost nine years passed
without such a specification being issued?"
On May 15, 2009, ALRB Regional Director Lawrence Alderete filed
a "Motion to Close Case Without Full Compliance" in both the Ace
Tomato Company and San Joaquin Tomato Growers cases. The motion
stated that there was "good cause to believe that the collection
of such monetary relief, under the particular facts of this
case, is not warranted and further compliance efforts would not
further the purposes of the Agricultural Labor Relations Act."
The Board granted the motion to close the cases on February 4,
2010. In its order, the Board stated:
"Regrettably, we grant the Regional Director's motion to
close this matter because the state of the record, the
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unavailability of crucial records, the unsubstantiated
nature of many of the representations made thus far, and
the passage of time make it highly unlikely that material
issues of fact regarding whether any makewhole relief is
owing and, if so, the amount owed, can ever be fairly
resolved."
The Board further stated that:
"The payroll and other records needed to determine what
employees earned during the makewhole period are no longer
available. Their unavailability resulted initially from the
legally unsupported position of employers' counsel that no
makewhole relief was owing and his resultant refusal to
produce those records in 1995 when this case was originally
released for compliance. Given the passage of years since
the inception of this case, the current unavailability of
the payroll records is not surprising. Fault for this state
of affairs lies with the parties, for not fully producing
employee records or other relevant information; with the
regional office, for not using all legal means available to
it to procure the necessary records and achieve final
adjudication; and with the Board, which is ultimately
responsible for enforcing its own orders. The necessity to
close this matter is unfortunate; however, under the unique
circumstances present, the Board finds granting the
Regional Director's motion to close is the most reasonable
course of action. We stress that this case and its sister
case, Ace Tomato Co., Case Number 93-CE-37-VI (20 ALRB No.
7) are anomalies."
On February 12, 2010, the United Farm Workers filed a Motion for
Reconsideration in each of the cases, asking that the cases not
be closed. The Board subsequently denied the motion but
reopened the matters on its own motion, and set the matters for
further hearing before an Administrative Law Judge (ALJ).
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Several more years of litigation followed. On September 11,
2013, the ALRB general counsel released a press release
announcing a $1.05 million dollar global settlement in the Ace
Tomato case. Of the settlement, $300,000 was proposed to be
dedicated to several non-profit organizations to be used for
programs that benefit the children of farm workers.
However, the proposed settlement agreement was subject to the
approval of the ALRB. On September 24, 2013, the ALRB
conditionally approved the agreement, subject to several
important changes. Most notably, the ALRB noted that the
$300,000 portion of the proposed settlement was impermissible
because it "cannot be said to substantially remedy the unfair
labor practices alleged in the Amended Consolidated Complaint
because no part of the $300,000 is for the benefit of the
agricultural employees actually affected by the alleged failure
to give notice and bargain. While the Board supports the
essential work of addressing the needs of farmworker children,
under the circumstances presented here, the terms of the formal
settlement agreement fail to effectuate the policies of the Act
and are contrary to National Labor Relations Board (NLRB)
precedent."
However, after the ALRB conditional approval, the settlement
agreement was never finalized by the parties, resulting in
additional litigation.
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Subsequently, there appears to have developed a dispute<2>
between the ALRB and the general counsel regarding who had the
authority and responsibility to litigate the case further. In a
series of decisions, the ALRB indicated that the Regional
Director of the ALRB, not the general counsel, had such
responsibility.
For example, the ALRB held that, "Both with respect to the
litigation of the compliance matter and with respect to the
negotiation of a settlement of the compliance matter, the
participation of the General Counsel is not contemplated in the
Board's regulations and is not necessary." In re Ace Tomato Co.,
Inc. (May 2014) Admin. Order 2014-07, at p. 7-8. Elsewhere the
ALRB stated: "[O]n May 13, 2014, [we said] that responsibility
for litigating and settling the instant matter did not lie with
the General Counsel, but rather with the Regional Director for
the Visalia Regional Office of the Board." In re Ace Tomato Co.,
Inc. (Nov. 2014) Admin. Order 2014-39, at p. 3.
In a subsequent administrative decision, the ALRB stated:
"On November 20, the Regional Director filed a Notice of
Representation (Notice) with the Board. The Notice purported
--------------------------
<2> There appear to be other areas of conflict between the
general counsel and the ALRB as well. On March 6, 2015, the
ALRB announced that it was revising its 2010 delegation of
authority to the general counsel to seek injunctive relief under
Labor Code Section 1160.4. Going forward, the general counsel
is required to obtain case specific authorization to seek
injunctive relief before initiating any proceedings (which the
ALRB states was historic practice). The Chair of ALRB stated,
"We do so because we believe that the litigation positions taken
by your office do not comport with settled law and are not only
erroneous, but even prejudicial to this Board's role as the
primary interpreter of the rights and responsibilities arising
under the ALRA."
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to fully authorize certain attorneys, including some from the
General Counsel's office, to assist and represent the Regional
Director in the litigation and resolution of this matter. . .
The plain language and clear terms of Admin. Orders No.
2014-07, No. 2014-39, and No. 2014-41 instruct the Regional
Director to take responsibility for the makewhole proceedings
in this case. The Board reminds the Regional Director that its
previous orders explicitly prohibit the General Counsel from
having any involvement in this matter. The Notice constitutes
a conscious disregard of the Board's prior orders, and
evidences a continuing failure to comprehend the proper role
of the Regional Director, the lack of a role for the General
Counsel in compliance matters generally, and the Board's
unequivocal directions in the instant case specifically.
The Board reemphasizes that all attorneys working on this
makewhole matter are directly subordinate to the Regional
Director in his litigation of the case. The General Counsel
may not have any involvement in the instant litigation. The
Board admonishes the Regional Director to heed Admin. Order
No. 2014-41 . . . " In re Ace Tomato Co., Inc . (Nov. 2014)
Admin. Order 2014-43, at p. 2-4.
Recently, the case was back before an Administrative Law Judge
for several days of hearing to determine the amount of the
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makewhole award. It may take several months for the
Administrative Law Judge to render a decision.
SPECIFIC CHANGES PROPOSED BY THIS BILL
This bill proposes to make three specific changes to existing
law. Each proposed change will be discussed in turn:
Authority for Makewhole and Backpay Awards
This bill grants the general counsel primary authority with
respect to the calculation and litigation of makewhole awards,
backpay calculations, and other monetary awards to employees in
compliance proceedings before the ALRB. However, the bill
specifies that the general counsel may be relieved of this
primary authority upon application by a charging party and a
finding by the ALRB that the general counsel has been negligent
in his or her duties or has unreasonably delayed in processing
or litigating the makewhole award, backpay calculation, or other
monetary award.
One-Year Time Limit
This bill also provides that within one year of an order of the
ALRB finding liability for a makewhole award, backpay
calculation, or other monetary award to employees, the ALRB and
general counsel shall process any compliance decision concerning
the award to final board order.
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Requirement for Posting of Employer Bond
This bill requires an employer who petitions for a writ of
review or otherwise appeals or seeks to overturn or stay any
order of the ALRB to post a bond, in the amount of the entire
economic value of the order as determined by the ALRB, to ensure
that employees receive the benefits of the order if the employer
does not prevail. The ALRB shall reasonably determine the
entire economic value of the order based on submissions from the
parties.
The requirement for an employer bond upon appeals of claims is
not without precedent in the Labor Code. For example, Labor
Code Section 98.2 requires an employer who appeals a decision of
the Labor Commissioner to superior court (where the claim is
heard de novo) to file an undertaking (a surety bond or a cash
deposit) in the amount of the order. Such legislation was
enacted in response to concerns that employers were delaying
litigation by filing meritless appeals to superior court in an
effort to hide assets or otherwise avoid payment of valid
claims.
SB 25 (Steinberg) of 2014, among other things, attempted to
address this issue (at least with respect to appeals of an award
under the mandatory mediation provisions of the law), albeit in
a different fashion. Under existing law, within 30 days after
the ALRB has issued an order affirming a mediator's order,
either party may petition for a writ of review in the court of
appeal or the California Supreme Court. SB 25 would have
provided that, during such a petition for a writ of review, the
parties would be required to implement the terms of the ALRB's
order. However, SB 25 was vetoed by Governor Brown.
This bill does not require an employer to implement the terms of
a mediator's contract during appeal, but would require the
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employer to post a bond in the amount of the entire economic
value of the order, as determined by the ALRB.
ARGUMENTS IN SUPPORT
UFW argues that this bill would create an expedited process to
help recover back pay and benefits owed to farm workers and
their families. They argue that, as the Ace Tomato case
demonstrates, farmworkers may have to wait nearly 30 years to be
compensated with fair wages. They contend that, in large part,
this delay happened because Ace Tomato refused to hand over, and
then destroyed, its payroll records, so the ALRB has not been
able to calculate the amount the farmworkers are owed. The
injustice from the Ace Tomato case is only the latest outcome of
the ALRB's lack of enforcement against farmworker employers who
fail to follow the Agricultural Labor Relations Act. There may
be future cases around the state where farm worker families are
held back economically by the system's faulty resolution system.
UFW also states that the ALRB's treatment of the farm workers in
the Ace Tomato case has contributed to the unconscionable delay
in that matter, and is "an example of a state agency neglecting
its duties to follow decades of state policy that protects
low-wage workers, especially when there is employer misconduct."
This bill would establish a mechanism for organized farm workers
to recover back wages and benefits in a fair and speedy manner.
ARGUMENTS IN OPPOSITION
A large coalition of agricultural employers opposes this
measure, stating:
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"[This bill] would require an employer seeking a writ of
review of any Board decision to first post a bond in the
amount of the entire economic value of the order as determined
by the Board. Such a requirement could deter many employers
from seeking their right to appeal. In many cases, the entire
economic value of the order cannot be known or is in dispute
which would limit the possibility of obtaining a bond.
We understand a bond is required pursuant to Labor Code
Section 98.2 when an appeal is sought from a "Berman" hearing
on wages. However, in that situation the standard of the
review by the Superior Court is de novo. Under the ALRA, the
standard of review is "substantial evidence on the record as a
whole" which provides great deference to the Board's decision.
It is also important to note that the ALRA is modeled after
the National Labor Relations Act (NLRA) which has appeal
rights for employers to the federal appeals courts seeking
review of the National Labor Relations Board decisions. In
Universal Camera Corp. v. NLRB (1951)(340 US 474), the Court
held that an appeals court's "responsibility is not less real
because it is limited to enforcing the requirement that
evidence appear substantial when viewed, on the record as a
whole." The NLRA does not require a bond to be filed by the
employer as a prerequisite for an appeal.
[This bill] also seeks to expand the authority of the Board's
General Counsel. The justification used for this change is
the amount of time it took to resolve the ACE Tomato matter.
The background provided focused much of the blame on the Board
when in fact a reading of the case shows there was blame on
all parties which resulted in the inordinate amount of time to
reach a decision. While 19 years is far too long, we find the
ACE Tomato decision to be an extreme exception and do not see
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it alone as justification to change this section of the law,
which has worked in a number of other cases with previous
Boards and General Counsels."
REGISTERED SUPPORT / OPPOSITION:
Support
California Rural Legal Assistance Foundation
United Farm Workers (Sponsor)
Opposition
Agricultural Council of California
Association of California Egg Farmers
CalChamber
California Association of Nurseries and Garden Centers
California Association of Wheat Growers
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California Association of Winegrape Growers
California Bean Shippers Association
California Citrus Mutual
California Cotton Ginners Association
California Cotton Growers Association
California Farm Bureau Federation
California Fresh Fruit Association
California Grain and Feed Association
California Pear Growers Association
California Seed Association
Family Winemakers of California
Nisei Farmers League
Pacific Egg and Poultry Association
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Ventura County Agricultural Association
Western Agricultural Processors Association
Western Growers Association
Western United Dairymen
Analysis Prepared by:Ben Ebbink / L. & E. / (916) 319-2091