BILL ANALYSIS Ó
SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
Senator Tony Mendoza, Chair
2015 - 2016 Regular
Bill No: AB 1669 Hearing Date: June 22,
2016
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|Author: |Roger Hernández |
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|Version: |June 9, 2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Alma Perez-Schwab |
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Subject: Displaced employees: service contracts: collection
and transportation of solid waste
KEY ISSUE
Should the Legislature require a ten percent bid preference for
bidders who agree to retain the employees of the prior
contractor or subcontractor on contracts for the collection and
transportation of solid waste?
ANALYSIS
Existing law:
1. Requires all bidders on public transit service contracts
to advise the awarding authority whether or not they will
retain the employees of the prior contractor/subcontractor.
(Labor Code §1070-1074)
2. Requires awarding authorities who put out a bid for
public transit service to provide a 10 percent bidding
preference to contractors and subcontractors who agree to
retain the employees of the prior contractor/subcontractor
for a period of at least 90 days.
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3. Requires existing contractors to provide awarding
authorities with specified employee information, including
the number of employees performing services under the
service contract and their wages, benefits and job
classifications to assist bidding contractors and
subcontractors in costing their bids.
4. Exempts contractors/subcontractors from retaining
employees for "cause," limited to the employee's
performance or conduct or failure to pass any required
substance and alcohol test, physical examination, criminal
background check required by law or any other lawful
qualification.
5. Authorizes the new contractor/subcontractor to pay
alternate wages and provide alternate benefits from those
of the prior contractor/subcontractor.
6. Authorizes the new contractor/subcontractor to retain
fewer employees than the prior contractor, if necessary.
In such a situation, the employees shall be retained by
seniority within the given job classification.
7. Authorizes employees who have not been offered
employment or who have been discharged in violation of the
provisions of this bill to bring suit against the
contractor/subcontractor in superior court and provides for
remedy in the form of reinstatement, back pay, benefits and
attorney's fees and costs.
8. Obliges an awarding authority, after public hearing, to
terminate a contract substantially breached by a
contractor/subcontractor. Provides that such a terminated
contractor/subcontractor is ineligible to bid or be awarded
a contract/subcontract with the terminating awarding
authority for between one and three years, to be determined
by the awarding authority.
9. Provides similar employment retention provisions for
employees of janitorial and building maintenance
contractors, as specified. (Labor Code §1060-1065)
This Bill would extend the existing 10 percent bid preference
for public transit contractors who agree to retain employees (as
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specified above) from a prior contractor or subcontractor to
also include contracts for the collection and transportation of
solid waste.
Additionally, this bill would:
1. Provide a definition of "solid waste" found in the
Public Resources Code.
2. Specify that "subcontractor" includes any person who
performs a portion of the contractor's express obligations
under a service contract but does not include a
contractor's vendors, suppliers, insurers, or other service
providers.
3. Require that existing service contractors (for both
public transit and solid waste contracts) provide the
specified employee information - total number, wages,
benefits - to bona fide bidders in writing at least 30
days before bids for the service contract are due.
4. Specify that the following applies to service contracts
for the collection and transportation of solid waste:
a. A successor contractor/subcontractor is
required to retain only employees whose employment
would be terminated with the contractor changes.
b. A successor contractor/subcontractor is not
required to retain an employee under a prior service
contract under any of the following circumstances:
i. If the employee does not meet any
standard hiring qualification lawfully required
by the successor contractor or subcontractor for
the position.
ii. If the successor would be required
to terminate or reassign an existing employee
covered under a collective bargaining agreement
in order to hire the employee of the prior
contractor/subcontractor.
iii. If, and to the extent, the actual
number of employees meeting the retention
requirements exceeds the number previously
communicated to bidders.
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c. An employee or his/her agent shall not bring
an action against a successor contractor or
subcontractor without first giving written notice of
the violation or breach and 30 days to cure.
d. An awarding authority shall not terminate a
service contract without first giving the successor
contractor or subcontractor written notice of the
violation or breach and 30 days to cure.
5. Specify that these provisions do not apply to contracts
awarded before January 1, 2017, or to contracts for which
the bid process has been completed before January 1, 2017.
COMMENTS
1. Need for this bill?
Existing law already establishes a 10 percent bidding
preference for public transit service contractors and
subcontractors who agree to retain employees of the previous
contractor for a period of at least 90 days. That requirement
was enacted by Senate Bill 158 (Alarcón) of 2003. The author
believes this bill is necessary to also protect the workers
against a loss of a job due to contract changes in the
collection and transportation of solid waste. This bill would
extend these provisions to public contracts for the collection
and transportation of solid waste.
2. Proponent Arguments :
This bill is sponsored by the California Teamsters Public
Affairs Council who state that this bill is intended to
prevent workers from being displaced when a city's contract
for solid waste services changes companies. They argue that
when cities and counties contract for services like solid
waste disposal, they are often focused on the costs of the
bids, the level of service provided, and the type of diversion
offered. In many cases, the workers fall through the cracks
when contracts change hands. The existing workforce, trained
and experienced, is summarily laid off and replaced.
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Proponents argue that these mass layoffs hurt individual
families, but also impact the local economy. Promoting a
stable workforce allows workers to invest in and contribute to
their community. It means people can stay in their homes, kids
can stay in their schools, and families can retain health
insurance. It also means fewer workers relying on
unemployment benefits or other taxpayer-funded programs.
The sponsor contends that this bill rewards companies who
retain existing solid waste service employees for ninety days
after the new contract takes effect with a 10 percent bid
preference. This allows the company an opportunity to decide
whether to retain the employee, while giving the employee
additional time to prepare for a possible layoff job.
3. Opponent Arguments :
According to opponents of this measure, while well
intentioned, this bill would infringe on local control and
flexibility. Opponents state that, although rehiring employees
who are threatened with the loss of their jobs is common in
the solid waste industry, they oppose the idea that this
voluntary practice should be codified into law. They argue
that there is no evidence of a widespread failure to rehire
employees when a solid waste contract changes hands. They also
argue that local governments implement bidding processes for
services primarily to assure services are rendered at the most
affordable cost for residents. When ten additional percentage
points are factored into the overall score of a contractor's
bid, as proposed in the bill, the contract may be awarded to a
bidder whose price is higher than the lowest responsible
bidder. This preference may result in increases to ratepayers'
fees for waste collection, recycling, and disposal services,
which could result in higher costs to consumers for many years
to come.
Additionally, they argue that this type of requirement would
make it difficult to switch providers even if there were
problems with the very same employees to which this bill
requires that an agency give preference. Finally, opponents
argue that sustaining the necessary degree of local control
over solid waste collection activities has been a cornerstone
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of California policy for over 100 years. With limited
resources, they argue that it is critical that local
governments have authority over contracting and employment
decisions to provide the most cost effective services.
4. Prior and Related Legislation :
SB 599(Mendoza) of 2015 would have extended the provisions on
the existing 10% bid preference for transit contracts to such
contracts with the State of California. This bill was vetoed
by Governor Brown.
AB 508(Swanson) of 2011 was very similar, but not identical,
to this bill and would have added contracts for solid waste
handling and recycling to the existing 10% bid preference
provisions.AB 508 was referred to, but never heard, in the
Senate Appropriations Committee.
SB 158 (Alarcon), Statutes of 2003, Chapter 103, created the
bid preference for contracted transit services for public
agencies.
SUPPORT
California Teamsters Public Affairs Council (Sponsor)
California Labor Federation, AFL-CIO
Recology
OPPOSITION
California Special Districts Association
California State Association of Counties
Inland Empire Disposal Association
Integrated Waste Management Task Force
League of California Cities
Los Angeles County Solid Waste Management Committee
Los Angeles County Waste Management Association
Solid Waste Association of Northern America
Solid Waste Association of Orange County
Waste Connections Inc.
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