BILL ANALYSIS                                                                                                                                                                                                    ”





                             SENATE JUDICIARY COMMITTEE
                         Senator Hannah-Beth Jackson, Chair
                             2015-2016  Regular  Session


          AB 1509 (Roger HernŠndez)
          Version: April 27, 2015
          Hearing Date: June 23, 2015
          Fiscal: Yes
          Urgency: No
          TMW


                                        SUBJECT
                                           
           Employees:  protected disclosures and complaints:  retaliation

                                      DESCRIPTION  

          This bill would prohibit an employer from discharging an  
          employee or in any manner discriminating, retaliating, or taking  
          any adverse action against any employee because the employee is  
          a family member of a person who has, or is perceived to have,  
          filed a claim with or instituted a proceeding before the Labor  
          Commissioner, testified or is going to testify in a proceeding  
          before the Labor Commissioner, disclosed information to a  
          government or law enforcement agency, as specified, participated  
          in an occupational health and safety committee, as specified, or  
          exercised rights afforded to employees by the Labor Code.  This  
          bill would also prohibit an employer from making, adopting, or  
          enforcing any rule, regulation, or policy preventing an employee  
          from disclosing information to a government or law enforcement  
          agency, as specified.  This bill would also expand these  
          prohibitions to include a person acting on behalf of the  
          employer, including, but not limited to, a client employer, as  
          specified.

                                      BACKGROUND  

          California's labor laws are some of the most stringent in the  
          country and afford employees broad protection against wage and  
          hours violations and unlawful discrimination.  Current law also  
          prohibits retaliation against employees for exercising their  
          rights under the Labor Code and the Fair Housing and Employment  
          Act.  Despite these statutory protections, employees,  








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          particularly low-wage workers, may hesitate to pursue claims  
          even where their rights have been violated.  This bill seeks to  
          clarify California's prohibition of retaliation against  
          employees who exercise their labor rights by specifically  
          extending the statutory protections to an employee's family  
          members and applying the prohibitions to a person acting on  
          behalf of the employer, as specified.

          This bill is similar to SB 1244 (Alquist, 2008), which would  
          have prohibited the discharge of an employee or discrimination  
          against any employee or applicant for employment because the  
          employee, applicant, coworker, or immediate family member of the  
          employee who filed a claim with or instituted a proceeding  
          before the Labor Commissioner, testified or was going to testify  
          in a proceeding before the Labor Commissioner, or exercised his  
          or her rights afforded under the Labor Code.  SB 1244 was held  
          under submission in the Senate Appropriations Committee.

          This bill was heard by the Senate Labor and Industrial Relations  
          Committee on June 10, 2015, and was approved by a vote of 3-1.

                                CHANGES TO EXISTING LAW
           
           Existing law  provides that no person may discharge or in any  
          manner discriminate against any employee or applicant for  
          employment because the employee or applicant engaged in certain  
          protected activities, including:
           filing a claim with the Labor Commissioner for loss of wages  
            as the result of demotion, suspension, or discharge from  
            employment for lawful conduct occurring during nonworking  
            hours away from the employer's premises (Lab. Code Sec.  
            96(k));
           filing a bona fide complaint or claim or instituting or  
            causing to be instituted any proceeding under or relating to  
            his or her rights under the jurisdiction of the Labor  
            Commissioner (Lab. Code Sec. 98.6);
           filing a civil action on behalf of himself, herself, or others  
            as an alternative to filing a complaint with the Labor and  
            Workforces Development Agency or any sub-unit of that agency  
            (Lab. Code Sec. 2699);
           testifying or preparing to testify in any of the above  
            proceedings.  (Lab. Code Sec. 98.6); or
           exercising - on behalf of himself, herself, or others rights  
            afforded to him or her.  (Lab. Code Sec. 98.6.)








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           Existing law  , commonly known as the Whistleblower Protection  
          Statute (WPS), prohibits an employer, or any person acting on  
          behalf of the employer, from making, adopting, or enforcing any  
          rule, regulation, or policy preventing an employee from  
          disclosing information to a government or law enforcement  
          agency, to a person with authority over the employee, or to  
          another employee who has authority to investigate, discover, or  
          correct the violation or noncompliance, or from providing  
          information to, or testifying before, any public body conducting  
          an investigation, hearing, or inquiry, if the employee has  
          reasonable cause to believe that the information discloses a  
          violation of state or federal statute, or a violation of or  
          noncompliance with a local, state, or federal rule or  
          regulation, regardless of whether disclosing the information is  
          part of the employee's job duties.  (Lab. Code  Sec. 1102.5(a).)

           Existing law  prohibits an employer, or any person acting on  
          behalf of the employer, from preventing an employee from  
          disclosing information, or retaliating against an employee who  
          discloses information, to a government or law enforcement agency  
          where the employee has reasonable cause to believe that the  
          information discloses a violation of state or federal statute,  
          or a violation or noncompliance with a state or federal rule or  
          regulation.  (Lab. Code Sec. 1102.5(b).)

           Existing law  also prohibits retaliation against an employee for  
          refusing to participate in an activity that would result in a  
          violation of state or federal statute, or a violation of or  
          noncompliance with a local, state, or federal rule or  
          regulation, for exercising his or her rights to disclose  
          information, testify, or refuse to participate in an unlawful  
          activity in any former employment, or for making a report to the  
          employee's government agency.  (Lab. Code Sec. 1102.5(c)-(e).)

           Existing law  prohibits a person from discharging or in any  
          manner discriminating against any employee because the employee  
          has:  (1) made any oral or written complaint to the Division of  
          Labor Standards Enforcement (DLSE), other governmental agencies  
          having statutory responsibility for or assisting the DLSE with  
          reference to employee safety or health, his or her employer, or  
          his or her representative; (2) instituted or caused to be  
          instituted any proceeding under or relating to his or her rights  
          or has testified or is about to testify in the proceeding or  
          because of the exercise by the employee on behalf of himself,  
          herself, or others of any rights afforded to him or her; or (3)  







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          participated in an occupational health and safety committee, as  
          specified.  (Lab. Code Sec. 6310.)

          Existing law  defines "client employer" to mean a business  
          entity, regardless of its form, that obtains or is provided  
          workers to perform labor within its usual course of business  
          from a labor contractor.  (Lab. Code Sec. 2810.3.)
           
          Existing law  lists categories of employers that may be issued a  
          citation on multiemployer worksites when the DLSE has evidence  
          that an employee was unlawfully exposed to a hazard as follows:  
          (1) the employer whose employees were exposed to the hazard (the  
          exposing employer); (2) the employer who actually created the  
          hazard (the creating employer); (3) the employer who was  
          responsible, by contract or through actual practice, for safety  
          and health conditions on the worksite, which is the employer who  
          had the authority for ensuring that the hazardous condition is  
          corrected (the controlling employer); and (4) the employer who  
          had the responsibility for actually correcting the hazard (the  
          correcting employer).  (Lab. Code Sec. 6400(b).)

           This bill  would extend the above discrimination and retaliation  
          protections to employees of family members who have taken  
          actions protected under the above provisions.

           This bill  would include, but not be limited to, in the  
          definition of "employer" or "a person acting on behalf of the  
          employer" a client employer that obtains or is provided workers  
          to perform labor within its usual course of business from a  
          labor contractor, and incorporate the categories of employers  
          that may be cited on multiemployer worksites for unlawfully  
          exposing employees to hazards.

           This bill  would not apply to claims for loss of wages as the  
          result of demotion, suspension, or discharge from employment for  
          lawful conduct occurring during nonworking hours away from the  
          employer's premises, unless the lawful conduct occurring during  
          nonwork hours away from the employer's premises involves the  
          exercise of employee rights otherwise protected, as specified.

                                        COMMENT
           
          1.  Stated need for the bill 
          
          The author writes:  "Recent cases and examples highlight several  







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          major gaps in existing California statutes that prohibit  
          retaliation against employees for engaging in protected  
          activity.  AB 1509 will close those gaps in order to protect  
          California workers."
          
          2.  Protecting employees from retaliation for employee's family  
            member's conduct  

          This bill would provide discrimination and retaliation  
          protections under the Labor Code for employees when a family  
          member, employed by the same employer, takes various actions,  
          such as filing a complaint with the Labor Commissioner, against  
          the employer.  Existing law provides various protections against  
          discrimination and retaliation when an employee takes an action  
          to uphold his or her rights under the Labor Code.

          The California Labor Federation, AFL-CIO (CLF), sponsor, points  
          to a recent case in which the court had to determine whether  
          existing California law protected an employee from association  
          retaliation.  In Su v. Siemens Industry, Inc. (2014) 2014 U.S.  
          Dist. LEXIS 100240, p. 3, an employee made multiple complaints  
          about safety concerns to the employer, who subsequently fired  
          the employee and his son, who worked for the same employer.  The  
          court held that Labor Code Section 6310 only gives a cause of  
          action to any employee who is discriminated against because the  
          employee has engaged in protected activity.  (Id. at p. 11.)   
          Accordingly, the son's association retaliation claim failed  
          because he was not the employee who had engaged in protected  
          activity.  (Id.)

          CLF argues that "[f]amily retaliation is an especially common  
          practice employed against immigrant workers, who frequently find  
          work alongside family members in the fields, warehouses, and  
          hotels of California.  Immigrant workers also make up the  
          majority of workers in the subcontracted economy.  Such  
          retaliation must clearly be prohibited to ensure that workers  
          can speak out about unlawful practices without fear of reprisals  
          against family members."  Further, the California Rural Legal  
          Assistance Foundation (CRLAF), in support, states that "[i]n  
          CRLAF's more than thirty years' history in representing farm  
          workers and other low-wage workers in rural California,  
          retaliation against family members (and other work associates)  
          is a significant feature of unscrupulous employers' efforts to  
          chill workers in the exercise of their labor and housing rights.  
           Indeed, in our experience it is very common for workers NOT to  







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          pursue claims against their employer because they fear  
          retaliation against family members also employed by that  
          employer."  Accordingly, this bill seeks to address retaliation  
          against employees who are discriminated or retaliated against  
          for the actions taken by their family members in support of  
          their rights under the Labor Code.  Arguably, this protection  
          may encourage employees to speak up and report safety and hazard  
          violations, as well as seek redress to protect their employment  
          rights, without worrying about whether their family members  
          employed by the same employer will be retaliated against.

          3.  Prohibiting conduct by persons acting on behalf of the  
            employer  

          This bill would provide that the terms "employer" or "a person  
          acting on behalf of the employer" includes, but is not limited  
          to, a client employer, which refers to a business entity,  
          regardless of its form, that obtains or is provided workers to  
          perform labor within its usual course of business from a labor  
          contractor.  This bill would also expand the definition of  
          "employer" to include the categories of employers that may be  
          issued a citation on multiemployer worksites when the DLSE has  
          evidence that an employee was unlawfully exposed to a hazard as  
          follows: (1) the employer whose employees were exposed to the  
          hazard (the exposing employer); (2) the employer who actually  
          created the hazard (the creating employer); (3) the employer who  
          was responsible, by contract or through actual practice, for  
          safety and health conditions on the worksite, which is the  
          employer who had the authority for ensuring that the hazardous  
          condition is corrected (the controlling employer); and (4) the  
          employer who had the responsibility for actually correcting the  
          hazard (the correcting employer).

          CLF states that:

            In recent years, we have seen a dramatic rise in  
            subcontracting through our economy.  Rather than hire  
            directly, companies rely on third party labor suppliers to  
            provide temporary and contract workers to do the ongoing work  
            of the business with no strings attached.  

            Under this employment model, retaliation has become hard to  
            address.  Temporary workers, by definition, have no guarantee  
            of work so a worker can easily be punished for speaking out.   
            Employers use the threat of terminating the contract with the  







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            staffing agency or contractor if workers exercise protected  
            labor rights.  These types of retaliation are hard to prove  
            and hard to remedy.

            This is particularly alarming when it comes to retaliation  
            related to worker health and safety.  A recent report by  
            ProPublica found that in California, temporary workers face a  
            50 [percent] greater risk of getting injured on the job than  
            permanent employees.  That disparity was even greater for  
            serious accidents.  When two recycling workers lost fingers in  
            similar machine accidents in 2009, Soex West Textile Recycling  
            told [the Division of Occupational Safety and Health  
            (Cal/OSHA)] it could not be held responsible as it had no  
            employees.  The workers injured on their property by their  
            equipment were employed by another entity, who denied any role  
            in supervision or control.  This example underscores the  
            challenge for state agencies in preventing workplace accidents  
            in these subcontracted settings.

          CLF also notes that the court in Su v. Siemens Industry, Inc.  
          (2014) 2014 U.S. Dist. LEXIS 65184 is illustrative of the  
          problem.  In ruling on the defendant's motion for summary  
          judgment and the plaintiff's summary judgment motion, the court  
          held that the complaints made by the father and son employees to  
          the general contractor of a job site could not be considered  
          "complaints" to their "employer" as required under Labor Code  
          Section 6310 because, although Code of Regulations provided a  
          broad scope of the term "employer" to include four categories of  
          employer who may be cited for occupational safety and health  
          violations, which includes "controlling employer" (see 8 Cal.  
          Code Reg. Sec. 336.10(c)), Labor Code Section 6310 applies a  
          more limited scope of the term "employer."  (Id. at pp. 21-23.)   
          The court further held that although the complaints made by the  
          employees to the general contractor were conveyed to the  
          subcontractor employer, "applying an indirect complaint theory  
          of liability to Section 6310 would undermine its requirement  
          that an employee make an 'oral or written complaint to . . . his  
          or her employer.' . . . As the statute is written, an 'indirect'  
          complaint cannot establish liability under Section 6310."  (Id.  
          at pp. 23-24.)

          CLF argues that, although the Su court held that the OSHA  
          retaliation statute applied only to "direct employers" and  
          dismissed the claims against the general contractor, California  
          law recognizes the general contractor as a "controlling  







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          employer" that may be cited for workplace safety violations.   
          CLF states that "[d]uring legislative testimony in 2014, a hotel  
          worker from Southern California testified that she was hired by  
          a labor contractor to clean hotel rooms.  After she complained  
          to the hotel manager that she was not permitted to take breaks,  
          the hotel manager called the contractor and instructed them not  
          to send her back to their hotel, in retaliation for the  
          complaint she made about unlawful working conditions.  After  
          several workers participated in legislative hearings to  
          highlight these injustices, the hotel responded by canceling its  
          contract with the labor contractor, further punishing the  
          workers.  These examples highlight a gap in existing law in  
          which the employer who has primary control over the worksite can  
          engage in retaliatory conduct against an employee, but hid  
          behind another entity as a 'shield' from liability."  This bill  
          seeks to close the gap of liability between a contracting entity  
          and the employer by applying the existing prohibitions on  
          discrimination and retaliation to controlling employers and the  
          categories of employers who are considered subject to safety  
          violations when employees are exposed to hazards.  In this way,  
          this bill would help employees, who attempt to bring safety  
          hazards and other unlawful conduct to the attention of  
          contracting entities, which, arguably, better protects all  
          employees, as well as the interests of the general contractors  
          and subcontractors.
           Support  :  American Federation of State, County and Municipal  
          Employees, AFL-CIO; California Employment Lawyers Association;  
          California Professional Firefighters; California Rural Legal  
          Assistance Foundation; California School Employees Association,  
          AFL-CIO; Consumer Attorneys of California

           Opposition  :  None Known

                                        HISTORY
           
           Source  :  California Labor Federation, AFL-CIO

           Related Pending Legislation  :  None Known

           Prior Legislation  :

          AB 2751 (HernŠndez, Chapter 79, Statutes of 2014), among other  
          things, clarified that civil penalties against an employer who  
          discriminates, retaliates, or takes adverse action against any  
          employee or job applicant who has engaged in prescribed  







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          protected conduct are awarded to the employee or employees who  
          suffered the violation.

          SB 666 (Steinberg, Chapter 577, Statutes of 2013), among other  
          things, made it unlawful for an employer to retaliate or take  
          any adverse action against an employee who makes a written oral  
          complaint that he or she is owed unpaid wages and prohibited any  
          person acting on behalf of the employer from retaliating against  
          an employee for disclosing information to a government or law  
          enforcement agency.

          SB 496 (Wright, Chapter 781, Statutes of 2013), among other  
          things, provided that an employer is prohibited from making,  
          adopting, or enforcing any rule, regulation, or policy  
          preventing an employee from disclosing information to a person  
          with authority over the employee or to another employee who has  
          authority to investigate, discover, or correct the violation or  
          noncompliance, regardless of whether disclosing the information  
          is part of the employee's job duties.

          AB 263 (HernŠndez, Chapter 732, Statutes of 2013), among other  
          things, prohibited an employer or any other person or entity  
          from engaging in unfair immigration-related practices, as  
          defined, for the purpose of retaliation against any person who  
          exercises any rights under the Labor Code.  AB 263 also  
          clarified that an employer is prohibited from discriminating,  
          retaliating, or taking adverse action against an employee or job  
          applicant who has engaged in prescribed protected conduct  
          relating to the enforcement of the employee's or applicant's  
          rights, provided up to a $10,000 penalty for violations thereof,  
          and specified that an employee is not required to exhaust  
          administrative remedies or procedures to enforce this  
          prohibition.

          SB 1244 (Alquist, 2008) See Background.

           Prior Vote  :

          Senate Labor and Industrial Relations Committee (Ayes 3, Noes 1)
          Assembly Floor (Ayes 54, Noes 26)
          Assembly Appropriations Committee (Ayes 12, Noes 5)
          Assembly Labor and Employment Committee (Ayes 5, Noes 2)

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