BILL ANALYSIS
AB 856
Page 1
ASSEMBLY THIRD READING
AB 856 (Wesson)
As Amended April 30, 2001
Majority vote
GOVERNMENTAL ORGANIZATION 12-4 LABOR AND EMPLOYMENT
4-0
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|Ayes:|Wesson, Calderon, |Ayes:|Koretz, Negrete McLeod, |
| |Cardenas, Cardoza, | |Goldberg, Shelley |
| |Chavez, Firebaugh, | | |
| |Harman, Horton, | | |
| |Longville, Nation, Reyes, | | |
| |Wiggins | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Strickland, Briggs, | | |
| |Dickerson, Wyland | | |
| | | | |
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APPROPRIATIONS 14-6
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|Ayes:|Migden, Alquist, Aroner, | | |
| |Cedillo, Corbett, Correa, | | |
| |Goldberg, Papan, Pavley, | | |
| |Simitian, Thomson, | | |
| |Wesson, Wiggins, Wright | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Bates, Ashburn, Daucher, | | |
| |Maldonado, Robert | | |
| |Pacheco, Runner | | |
| | | | |
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SUMMARY : Establishes racetrack backstretch employee labor
standards and requires the California Horse Racing Board (CHRB)
to annually inspect the housing conditions at California's
racetracks. Specifically, this bill :
1)Finds that the National Labor Relations Act has declined
jurisdiction over horse racing due to extensive state
regulation over the industry, and expresses legislative intent
to establish an orderly procedure for backstretch workers to
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exercise their statutory rights to organize a labor union.
2)Directs the CHRB to establish a union recognition procedure
and to establish reasonable rules to regulate access for
representatives of labor unions to meet with backstretch
workers during working and non-working hours. This bill also
includes anti-coercion/retaliation language for both employees
and trainers in obtaining or revoking employee authorization
cards for the selection of a labor union or collective
bargaining agent.
3)Requires the CHRB to provide the union a list of backstretch
employees, including the license type, employer, addresses,
telephone number, and location of employment. A labor union
may only use this information for organizing purposes.
4)Allows a labor union to request CHRB recognition as the
exclusive bargaining agent for backstretch employees upon
collection of signed cards from a majority of the workers in a
defined bargaining unit. When a union claims to represent a
majority of the employees in such a unit, a neutral party must
be selected by the CHRB to validate the employee authorization
cards submitted by the union. Upon the validation of these
cards, the CHRB must recognize that union as the collective
bargaining agent for those workers.
5)Authorizes the CHRB to conduct an election among employer
trainers for the selection of an agent to represent the
interests of the trainers in a multiemployer agreement. A
trainer may opt out of a multi-employer bargaining procedure,
but if a majority of his/her employees indicate a desire to
join a union, the trainer must bargain in good faith. If less
than a majority of the trainers' workers express a desire to
join a union, the trainer is not subject to the bargaining
order, but the workers have one year to get a majority of the
employees to sign union authorization cards. The bill
additionally provides for a decertification process for
employees that no longer desire to be represented by the
union.
6)Allows for a labor union and organization of trainers or
horsemen to enter into a mutually acceptable agreement that
may substitute for the provisions of the bill. The bill,
however, does not require that parties enter into any labor
agreement, provided each party is negotiating in a good faith
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effort to reach an agreement.
7)Authorizes the CHRB to require the parties to submit to
binding arbitration, or to contract with state mediation and
conciliation services relating to this issue, in the event of
an impasse in labor negotiations.
8)Requires the Labor Commissioner to notify the CHRB of any
labor violations by a licensee committed during the course of
such licensed activity, and includes labor law violations as a
condition that may be considered by the CHRB in the suspension
or revocation of a license.
9)Directs the CHRB to develop housing standards that protect the
health and safety and general welfare of the backstretch
workers living at the racetrack and the horses in their care.
Prohibits the CHRB from licensing racing associations to
conduct a race meeting until an inspection has taken place to
ensure compliance with the housing requirements. Moreover, an
annual inspection is required to be conducted by CHRB in
conjunction with either the Department of Housing and
Community Development or the appropriate local housing
authority.
10)Requires trainers to keep accurate payroll records of their
employees that would be available for review by the Labor
Commissioner and the employee, as specified. Except for
trainers covered by a collective bargaining agreement, the
CHRB must require, as a condition of licensure, that copies of
all payroll records be filed with the CHRB. The Labor
Commissioner must establish a program to audit these records
at least once every three years to ensure compliance.
11)Redirects an additional 30% of charity racing day proceeds to
be distributed to charities associated with the horse racing
industry.
12)Provides that when a statewide majority of backstretch
workers choose to be represented by a union, either the
horsemen owners or trainers, where appropriate, must submit a
plan to the CHRB for the administration of the existing
pension program by a joint labor-management committee. The
bill additionally requires the existing health and welfare
fund board to be expanded to include two holders of
backstretch employee licenses, or, if there is a union, two
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union representatives.
EXISTING LAW :
1)Authorizes wagering on the result of live and simulcast horse
races, subject to the regulation and oversight of CHRB, and
requires the licensure of various persons and entities
associated with this industry.
2)Imposes specified requirements on the operation of racetracks
and backstretch facilities, and establishes pension funds and
welfare funds for the benefit of backstretch personnel and
horsemen.
FISCAL EFFECT : The Department of Industrial Relations will
incur General Fund costs of around $250,000 annually to audit
trainers payroll records in the initial four years and annual
costs of around $150,000 thereafter. The CHRB will incur
one-time costs of about $30,000 to update its computer system
and ongoing costs of $85,000 to inspect backstretch employee
housing at the racetracks, the latter of which could be offset
by assessing fees upon racing associations to defray the costs
associated with the housing inspections.
COMMENTS : In response to a series of media reports that
detailed labor violations and substandard housing conditions at
California's racetracks, the author and supporters of this bill
developed a comprehensive proposal that addresses a number of
issues affecting the California racing industry. These media
reports suggested that some of these workers are not being
properly compensated regarding minimum wage and overtime
payments, as well as living in equipment rooms not designed for
residency. These reports have been confirmed by the Labor
Commissioner and housing inspectors.
"Backstretch" workers are not presently represented by a union,
nor are they afforded any of the protections accorded by both
the National Labor Relations Act and the state Agricultural
Relations Act. Backstretch workers are generally employees of
trainers who take care of the horses, and are classified as
grooms, exercise riders, and hotwalkers. It is estimated that
there are approximately 3,500 backstretch workers employed at
California's racetracks.
This bill addresses many of these labor and housing issues by
establishing a legal framework for backstretch employees to
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exercise their right to unionize. In addition, the bill
establishes housing standards that racing associations would
have to comply with as a condition for a license to conduct a
race meeting. The bill also requires trainers to keep accurate
and true payroll records in compliance with applicable laws and
provides for the suspension or revocation of a trainer's license
for serious violations of the law.
Opponents argue that this bill could place an excessive burden
on California's racing industry by potentially making it more
costly for trainers and owners to train and own horses in
California. The trainers' organization notes that they were
neutral on last year's AB 2760 due to the inclusion of the
account wagering authorization, which would have produced
additional wagering revenues for the various segments of the
racing industry. Opponents note that the California horse
racing industry continues to experience difficulty in remaining
competitive with other forms of gambling and entertainment, and
that potentially increasing the costs of doing business in this
state will only exacerbate this condition.
Opponents also contend that the majority card check means of
organizing, as opposed to an election, unfairly favors a union
in any such organizing campaign. Opponents challenge the
propriety of requiring the CHRB to provide the union a list of
backstretch employees, that includes information relating to
license type, employer, addresses and telephone numbers, and
location of employment. Opponents also object to the provisions
in the bill that place additional payroll reporting and auditing
requirements on trainers that are not subject to a collective
bargaining agreement.
This issue was previously considered by the Legislature in the
1999-2000 Legislative Session (AB 2760, Wesson). However, AB
2760 also contained an authorization for account wagering, which
was intended to help the state's racing industry capture
wagering revenue lost to out-of-state and offshore betting
systems. AB 2760 was the product of extensive negotiations
involving labor organizations, racing associations, owners and
trainers. The Governor, however, vetoed the bill, and in his
veto message expressed displeasure with AB 2760's expanded
wagering provisions. The Governor did state that he would sign
a bill that contained only the backstretch provisions that
"protect backstretch employees from being subjected to dismal
living and working conditions."
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Analysis Prepared by : George Wiley / G. O. / (916) 319-2531
FN: 0001244