BILL ANALYSIS �
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Date of Hearing: April 13, 2011
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Sandre Swanson, Chair
AB 508 (Swanson) - As Introduced: February 15, 2011
SUBJECT : Displaced public transit, solid waste handling, and
recycling services employees.
SUMMARY : Extends an existing bid preference for public transit
contractors who agree to retain employees (as specified) to also
include solid waste handling and recycling services contractors.
EXISTING LAW :
1) Requires all bidders on public transit service contracts to
advise the awarding authority whether 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, which will assist
bidding contractors/subcontractors in costing their bids.
4) Exempts contractors/subcontractors from retaining employees
for "cause," as defined.
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.
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8) Provides for remedy in the form of reinstatement, back pay,
benefits and attorney's fees and costs.
9) Obliges an awarding authority, after public hearing, to
terminate a contract substantially breached by a
contractor/subcontractor.
10)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.
11)Also provides for employment retention protection for
employees of janitorial and building maintenance contractors,
as specified.
FISCAL EFFECT : Unknown
COMMENTS : 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 (Alarc�n) of 2003.
This bill would simply extend those requirements to contractors
and subcontractors who submit bids for solid waste handling and
recycling services.
ARGUMENTS IN SUPPORT :
This bill is co-sponsored by the California Labor Federation,
AFL-CIO and the California Teamsters Public Affairs Council.
The sponsors state that this bill is intended to reduce
unemployment by keeping workers from being displaced when a
city's contract for garbage and recycling changes companies.
They note that with an unemployment rate stuck at 12.5 percent,
working people in California face the bleakest economy since the
Great Depression. Last year alone the Employment Development
Department (EDD) paid out an unprecedented $22.9 billion in
unemployment benefits to 1.7 million jobless Californians.
Workers who have lost jobs are finding it nearly impossible to
find new ones. The number of long-term unemployed doubled last
year to 880,000. In fact, over 40 percent of the unemployed
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have been out of work more than six months.
The sponsors argue that when cities and counties contract for
services like garbage and recycling 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.
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 sponsors contend that this bill rewards companies who retain
existing garbage and recycling 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. Existing law already
provides such a preference in bids for transit services.
ARGUMENTS IN OPPOSITION :
Opponents contend that this bill is designed to ensure that a
union, who has been elected as the bargaining representative
through the proper procedures for the prior contractor, will
remain the bargaining representative for the subsequent
employer. Since this bill mandates that subsequent employers /
contractors, who want to obtain a bid preference for a public
contract, must agree to hire the predecessor's employees,
opponents argue that it basically forces a successor
employer/contractor into a union workforce. Refusal to make
such a promise will basically eliminate that contractor from the
bidding process to obtain the contract. Opponents believe the
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decision of whether or not to have a union in the workplace
should be left to the employers and employees, after following
the proper procedures outlined by the National Labor Relations
Act.
Additionally, opponents argue that this bill does not provide
protection for all employees of the solid waste handling and
recycling, but rather only those employees of the prior
contractor. By forcing a subsequent contractor to promise to
hire the prior contractor's employees, it places the subsequent
employer in the untenable position of either: (1) losing the
contract in order to save his/her existing workforce; or (2)
promising to terminate his existing employees and hire the prior
contractor's employees in order to obtain the bid preference.
Accordingly, despite being employees of solid waste handling and
recycling that this bill seeks to protect, the existing
employees of the subsequent contractor will ultimately lose if
this bill is implemented.
REGISTERED SUPPORT / OPPOSITION :
Support
California Labor Federation, AFL-CIO (co-sponsor)
California Teamsters Public Affairs Council (co-sponsor)
Opposition
California Business Properties Association
California Chamber Of Commerce
California Independent Grocers Association
California Manufacturers & Technology Association
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091