BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1669|
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THIRD READING
Bill No: AB 1669
Author: Roger Hernández (D)
Amended: 6/27/16 in Senate
Vote: 21
SENATE LABOR & IND. REL. COMMITTEE: 4-1, 6/22/16
AYES: Mendoza, Jackson, Leno, Mitchell
NOES: Stone
SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/11/16
AYES: Lara, Beall, Hill, McGuire, Mendoza
NOES: Bates, Nielsen
ASSEMBLY FLOOR: 52-26, 5/5/16 - See last page for vote
SUBJECT: Displaced employees: service contracts: collection
and transportation of solid waste
SOURCE: California Teamsters Public Affairs Council
DIGEST: This bill requires a 10 percent bid preference for
bidders who agree to retain for a period of 90 days the
employees of the prior contractor or subcontractor on local
agency contracts for the collection and transportation of solid
waste.
ANALYSIS:
Existing law:
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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.
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.
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
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
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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.
This bill:
1)Extends the existing 10 percent bid preference (as specified
above) to contracts for the collection and transportation of
solid waste.
2)Provides a definition of "solid waste" found in the Public
Resources Code.
3)Specifies 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.
4)Requires existing service contractors (for both public transit
and solid waste contracts) to provide 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.
5)Specifies 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 contract 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
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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.
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.
e) Specifies that these provisions shall only apply to
service contracts when an awarding agency decides to let an
exclusive solid waste collection and transportation
contract out to bid. It is not intended to determine
whether or not a local agency should procure a service
contract by inviting bids, extend an existing service
contract, renegotiate its service contract with the prior
contractor, or exercise any other right it possesses to
determine aspects of solid waste handling that are of local
concern.
f) Specifies that these provisions do not modify, limit, or
abrogate in any manner any franchise, contract, license, or
permit granted or extended by a city, county, or other
local government agency before January 1, 2017.
6)Specifies 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.
Background
Existing law already provides a 10 percent bidding preference
for public transit service contractors and subcontractors who
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agree to retain employees of the previous contractor for a
period of at least 90 days. That requirement was enacted by SB
158 (Alarcón, Chapter 103, Statutes 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 extends
these provisions to public contracts for the collection and
transportation of solid waste.
Related/Prior Legislation
SB 599(Mendoza, 2015) would have extended the provisions on the
existing 10% bid preference for transit contracts to such
contracts with the State of California. The bill was vetoed by
Governor Brown.
AB 508(Swanson, 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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee, this bill
could result in a General Fund state reimbursable mandate on
local government, the magnitude of which is unknown, but
potentially in the low hundreds of thousands of dollars
annually.
SUPPORT: (Verified8/12/16)
California Teamsters Public Affairs Council (source)
California Labor Federation, AFL-CIO
Recology
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OPPOSITION: (Verified8/12/16)
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.
ARGUMENTS IN SUPPORT: Proponents 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.
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 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 90 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.
ARGUMENTS IN OPPOSITION: According to opponents of this
bill, while well intentioned, this bill infringes 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
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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 contracts change.
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 10 additional
percentage points are factored into the overall score of a
contractor's bid, as proposed in this 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 with limited resources, it is critical that local
governments have authority over contracting and employment
decisions to provide the most cost effective services.
ASSEMBLY FLOOR: 52-26, 5/5/16
AYES: Alejo, Arambula, Atkins, Bloom, Bonilla, Bonta, Brown,
Burke, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley,
Cooper, Dababneh, Daly, Dodd, Eggman, Frazier, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Roger Hernández, Holden, Irwin, Jones-Sawyer,
Levine, Lopez, Low, McCarty, Medina, Mullin, O'Donnell, Quirk,
Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone,
Thurmond, Ting, Weber, Williams, Wood, Rendon
NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Chávez,
Dahle, Gallagher, Grove, Hadley, Harper, Jones, Kim, Lackey,
Linder, Maienschein, Mathis, Mayes, Melendez, Obernolte,
Olsen, Patterson, Steinorth, Wagner, Waldron, Wilk
NO VOTE RECORDED: Beth Gaines, Nazarian
Prepared by:Alma Perez-Schwab / L. & I.R. / (916) 651-1556
8/15/16 20:17:18
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