BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2617|
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THIRD READING
Bill No: AB 2617
Author: Weber (D), et al.
Amended: 7/3/14 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE : 5-2, 6/24/14
AYES: Jackson, Corbett, Lara, Leno, Monning
NOES: Anderson, Vidak
ASSEMBLY FLOOR : 49-25, 5/28/14 - See last page for vote
SUBJECT : Civil rights: waiver of rights
SOURCE : Author
DIGEST : This bill imposes specified restrictions on the
future contractual waivers of rights under the Ralph Civil
Rights Act and the Tom Bane Civil Rights Act (Bane Civil Rights
Act).
Senate Floor Amendments of 7/3/14 add co-authors and
double-jointing language to avoid chaptering out issues with AB
2634 (Bradford).
ANALYSIS :
Existing law:
1. The Ralph Civil Rights Act, provides that all persons within
the jurisdiction of this state have the right to be free from
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any violence, or intimidation by threat of violence,
committed against their persons or property because of
personal or other characteristics or statuses, such as
political affiliation, sex, race, color, religion, marital
status, sexual orientation, or position in a labor dispute.
2. The Bane Civil Rights Act prohibits violence or the threat
of violence based on grounds such as race, color, religion,
ancestry, national origin, political affiliation, sex, sexual
orientation, age, disability, or position in a labor dispute.
3. Authorizes a court, if it finds as a matter of law that the
contract or any clause of the contract was unconscionable at
the time it was made, to refuse to enforce the contract, or
it may enforce the remainder of the contract without the
unconscionable clause, or it may so limit the application of
any unconscionable clause as to avoid any unconscionable
result.
4. Provides that a person who violates the Ralph Civil Rights
Act or aids, incites, or conspires in that act, is liable for
actual damages suffered by any person denied that right, as
well as a civil penalty and attorney's fees.
5. Provides that whenever there is reasonable cause to believe
that any person or group of persons is engaged in conduct of
resistance to the full enjoyment of any of the foregoing
rights the Attorney General (AG), any district attorney or
city attorney, or any person aggrieved by the conduct may
bring a civil action.
6. Provides that a person whose enjoyment of legal rights has
been interfered with, or attempted to be interfered with, may
bring a civil action for damages, including injunctive
relief, and other appropriate equitable relief.
This bill:
1. Provides that a person shall not require another person to
waive any legal right, penalty, remedy, forum, or procedure
for violation of the Ralph Civil Rights Act or the Bane Civil
Rights Act as a condition of entering into a contract for the
provision of goods and services.
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2. Provides that a person shall not refuse to enter into a
contract with, or refuse to provide goods or services to,
another person on the basis that the other person refuses to
waive any legal right, penalty, remedy, forum, or procedure
for violation of these civil rights acts with or otherwise
notify the AG or any other public prosecutor or any law.
3. Provides that the exercise of a person's right to refuse to
waive any legal right, penalty, remedy, forum, or procedure
for a violation of these civil rights laws shall not affect
any otherwise legal terms of a contract or an agreement.
4. Requires that any waiver of any legal right, penalty, remedy,
forum, or procedure for violation of these civil rights acts
be knowing and voluntary, and in writing, and expressly not
made as a condition of entering into the contract or as a
condition of providing or receiving goods and services, and
that any person who seeks to enforce such a waiver shall have
the burden of proving that it was knowing and voluntary and
not made as a condition of the contract or of providing or
receiving the goods or services.
5. Provides that any waiver of any legal right, penalty, remedy,
forum or procedure for a violation of this bill that is
required as a condition of entering into a contract for goods
or services shall be deemed involuntary, unconscionable,
against public policy, and unenforceable. This provision
does not affect the enforceability or validity of any other
provision of the contract.
6. Provides that the foregoing protections apply to any
agreement to waive any legal right, penalty, remedy, forum,
or procedure for a violation of these civil rights laws
entered into, altered, modified, renewed, or extended on or
after January 1, 2015. This bill does not apply to any
agreement to waive any legal rights, penalties, remedies,
forums, or procedures for a violation of these civil rights
acts after a legal claim has arisen.
7. Provides that its provisions shall not be construed to negate
or otherwise abrogate certain rights under the law that are
currently unwaivable.
8. Contains double-jointing language to prevent chaptering out
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issues with AB 2634 (Bradford).
Background
California has led the nation in enacting a statutory scheme
which provides for civil, criminal, and administrative penalties
for violations of civil rights laws. In particular, the Ralph
Civil Rights Act and Bane Civil Rights Act were designed to
protect individuals from hate-based crimes of violence. Despite
these statutory protections, hate crimes are still a common
occurrence in some areas of California.
Prior Legislation
AB 1715 (Assembly Judiciary Committee of 2003) would have, among
other things, made it an unlawful employment practice for a
covered employer to require an employee to waive any rights or
procedures under the Fair Employment and Housing Act (FEHA) as a
condition of employment. This bill was vetoed by Governor Gray
Davis.
SB 1538 (Burton of 2002) would have, among other things, made it
an unlawful employment practice to require an employee to waive
any rights or procedures under FEHA, and would have made any
predispute arbitration agreement between an employer and
employee that violated this prohibition unenforceable. This
bill was vetoed by Governor Gray Davis.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 7/23/14)
AFSCME
American Civil Liberties Union
California School Employees Association
California State Conference of the NAACP
California State Employees Association
Consumer Attorneys of California
Equality California
Western Center on Law & Poverty
OPPOSITION : (Verified 7/23/14)
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Acclamation Insurance Management Services
Allied Managed Care
California Apartment Association
California Association of Health Facilities
California Bankers Association
California Chamber of Commerce
California Chapter of American Fence Association
California Citizens Against Lawsuit Abuse
California Employment Law Council
California Farm Bureau Federation
California Fence Contractor's Association
California Grocers Association
California Hospital Association
California Manufacturers and Technology Association
California New Car Dealers Association
California Restaurant Association
California Retailers Association
Civil Justice Association of California
Coalition of Small and Disabled Veteran Business
Cooperative of American Physicians
Flasher Barricade Association
Marin Builders Association
National Federation of Independent Business
Southwest California Legislative Council
Torrance Area Chamber of Commerce
Western Growers Association
ARGUMENTS IN SUPPORT : In support of this bill, the California
State Conference of the NAACP writes that "AB 2617 is good
public policy in that it strengthens the circumvention of
California Civil Rights by closing a loophole and prevents
consumer abuse. Currently some employers, landlords and
merchants abuse consumers by requiring the consumer as a
condition of receiving employment, housing, or goods and
services to enter a contract with a mandatory arbitration clause
buried in the contract preventing the consumer from going to
court to seek justice under California's civil rights statutes.
[ . . . ] Unfortunately, because of the widespread mandatory
arbitration waivers in contracts, the effectiveness of the
protections afforded by these [civil rights] laws is being
seriously undermined. A right that is not enforceable in the
courts is no right at all."
ARGUMENTS IN OPPOSITION : Opponents have raised concerns that
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the restrictions on waivers in this bill may be preempted by
federal law. In a coalition letter, they write, "The Federal
Arbitration Act (FAA) and the California Arbitration Act (CAA)
evidence a strong preference for enforcement of arbitration
agreements, so long as the underlying contract is fair. The FAA
generally prohibits state laws that restrict enforcement of
arbitration agreements. [See Armanderiz v. Foundation Health
Psychcare Services, Inc. 24 Cal.4th 83 (2000) ("California law,
like federal law, favors enforcement of valid arbitration
agreements."); Sonic-Calabasas A, Inc. v. Moreno, 57 Cal.4th
1109 (2013) (agreeing that FAA preempts state law that seeks to
limit the waiver of administrative hearing in arbitration
agreement, as it interferes with arbitration goals of providing
"'streamlined proceedings and expeditious results') and AT&T
Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011) (holding that
the FAA prohibits states from conditioning the enforceability of
an arbitration agreement on the availability of class wide
arbitration procedures, as such a requirement would be
inconsistent with the intent of the FAA).]
"Despite consistent authority from both the United States
Supreme Court and California Supreme Court regarding the
inclination to promote arbitration and limit any statutes or
common law that interfere with arbitration, AB 2617 seeks to do
just that. Specifically, AB 2617 prohibits any contract that
requires a waiver of the right to pursue a civil action for the
violation of any alleged civil rights under the Civil Code or
Fair Employment and Housing Act. Given that all valid
arbitration agreements for goods and services require both
parties to waive their rights to pursue a civil action, AB 2617
directly interferes with the FAA and CAA."
ASSEMBLY FLOOR : 49-25, 5/28/14
AYES: Alejo, Ammiano, Bloom, Bocanegra, Bonilla, Bonta,
Bradford, Buchanan, Ian Calderon, Campos, Chau, Chesbro,
Cooley, Dickinson, Eggman, Fong, Fox, Frazier, Garcia, Gatto,
Gomez, Gonzalez, Gordon, Hall, Roger Hern�ndez, Holden,
Jones-Sawyer, Levine, Lowenthal, Medina, Mullin, Muratsuchi,
Nazarian, Perea, John A. P�rez, V. Manuel P�rez, Quirk,
Rendon, Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting,
Weber, Wieckowski, Williams, Yamada, Atkins
NOES: Achadjian, Allen, Bigelow, Ch�vez, Conway, Dahle,
Donnelly, Beth Gaines, Gorell, Grove, Hagman, Harkey, Jones,
Linder, Logue, Maienschein, Mansoor, Melendez, Nestande,
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Olsen, Patterson, Quirk-Silva, Wagner, Waldron, Wilk
NO VOTE RECORDED: Brown, Dababneh, Daly, Gray, Pan, Vacancy
AL:d 7/30/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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