BILL ANALYSIS Ó SENATE JUDICIARY COMMITTEE Senator Hannah-Beth Jackson, Chair 2015-2016 Regular Session AB 1509 (Roger Hernández) 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, AB 1509 (Roger Hernández) Page 2 of ? 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.) AB 1509 (Roger Hernández) Page 3 of ? 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) AB 1509 (Roger Hernández) Page 4 of ? 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 AB 1509 (Roger Hernández) Page 5 of ? 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 AB 1509 (Roger Hernández) Page 6 of ? 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 AB 1509 (Roger Hernández) Page 7 of ? 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 AB 1509 (Roger Hernández) Page 8 of ? 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 (Hernández, 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 AB 1509 (Roger Hernández) Page 9 of ? 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 (Hernández, 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) ************** AB 1509 (Roger Hernández) Page 10 of ?