AB 1509 Page 1 Date of Hearing: April 22, 2015

ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT Roger Hernández, Chair AB 1509 (Roger Hernández) – As Amended March 26, 2015

SUBJECT: Employees: protected disclosures and complaints: retaliation

SUMMARY: Revises various provisions of law related to employment retaliation. Specifically, this bill:

1) Provides that an employer, or a person acting on behalf of an employer, shall not retaliate against an employee because the employee is a family member of a person who has engaged in protected activity under existing law.

2) Provides that "employer" for purposes of these employment retaliation provisions includes a "client employer" or a "controlling employer," as specified.

FISCAL EFFECT: Unknown

COMMENTS: Although certain provisions of law contain their own anti-retaliation provisions, two specific provisions of the California Labor Code provide general protection against retaliation for engaging in certain protected activity.

Existing Labor Code Section 98.6 prohibits an employer from discharging, retaliating, or taking other adverse employment action against an employee because the employee has engaged in protected conduct, as specified, such as filing a complaint or claim with the Labor Commissioner.

The Labor Code also contains a "whistleblower" statute (Labor Code Section 1102.5) which prohibits an employer from retaliating against an employee for disclosing information to a government or law enforcement agency, or to others, or for participating in an investigation or hearing, if the employee has reasonable cause to believe that the information discloses a violation of or noncompliance with existing law.

In addition to these general provisions, California law also has specific anti-retaliation provisions related to occupational safety and health. For example, Labor Code Section 6310 prohibits retaliation against an employee because he or she has made a health and safety complaint or instituted or testified in any proceeding.

In the health and safety context, California law codifies a "controlling employer" concept related to multi-employer worksites. Specifically, Labor Code Section 6400 provides, in relevant part, as follows:

"(b) On multiemployer worksites, both construction and nonconstruction, citations may be issued only to the following categories of employers when the division has evidence that an employee was exposed to a hazard in violation of any requirement enforceable by the division: (1) The employer whose employees were exposed to the hazard (the exposing employer). AB 1509 Page 2 (2) The employer who actually created the hazard (the creating employer). (3) The employer who was responsible, by contract or through actual practice, for safety and health conditions on the worksite, which is the employer who had the authority for ensuring that the hazardous condition is corrected (the controlling employer). (4) The employer who had the responsibility for actually correcting the hazard (the correcting employer). The employers listed in paragraphs (2) to (4), inclusive, of this subdivision may be cited regardless of whether their own employees were exposed to the hazard." Therefore, under existing law, an employer may be cited for a workplace safety and health violations if they were the employer who was responsible for safety and health conditions, even if they had no employees who were exposed to the hazard.

In addition, AB 1897 (Roger Hernández) from 2014 established client employer liability for certain violations for workers provided by a labor contractor. AB 1897 defined a "client employer" to mean a business entity that obtains or is provided workers to perform labor within its usual course of business from a labor contractor.

STATED NEED FOR THE BILL

According to the author, California law contains a strong public policy to protect employees from retaliation for exercising their rights. This is an acknowledgement of the fact that substantive labor and employment laws are meaningless if workers are reluctant to exercise their rights for fear of employer retaliation.

Despite this strong public policy and several existing statutes that prohibit such retaliation, employer retaliation runs rampant. In 2013, the Labor Commissioner received 3,514 complaints of employer retaliation. According to the author, in reality, this figure represents only a fraction of the true picture because it only represents those brave workers who were courageous enough to come forward a file a claim with the Labor Commissioner.

Immigrant workers are particularly vulnerable to employer retaliation and abuse. A 2013 report1 by the National Employment Law Project (NELP) stated, "Silencing or intimidating a large percentage of workers in any industry means that workers are hobbled in their efforts to protect and improve their jobs. As long as unscrupulous employers can exploit some low-wage workers with impunity, all low-wage workers suffer compromised employment protections and economic security. Law-abiding employers are forced to compete with illegal practices, perpetuating low- wages in a whole host of industries."

According to the author, recent cases and examples highlight several major gaps in existing California statutes that prohibit retaliation against employees for engaging in protected activity. This bill will close those gaps in order to protect California workers.

"Associational" Retaliation Against Family Members

1 http://www.nelp.org/page/-/Justice/2013/Workers-Rights-on-ICE-Retaliation-Report-California.pdf?nocdn=1 AB 1509 Page 3 According to the author, one such gap exists in the situation where an employer employs several individuals who happen to be family members. Situations have arisen in which one employee will engage in protected activity, but the employer will retaliate against the employee's family member (such as terminating the family member in retaliation for the others employee's protected activity).

Current law is unclear about whether such conduct is unlawful. In at least one recent case (Su v. Siemens) the Court held that current law did not extend protection in such a situation. In that case, a construction foreman made several safety-related complaints, and the employer terminated the employer's son, who also happened to be employed by the same employer. However, the Court concluded that California law does not give a cause of action on the theory that the employer fired one employee to retaliate against a family member fellow employee's protected activity.

Therefore, this bill will provide that an employer shall not retaliate against an employee because the employee is a family member of a person who has engaged in protected activity.

Retaliation by "Controlling Employers" or "Client Employers"

According to the author, another gap in existing law exists with respect to the category of employer that may be cited for unlawful retaliation.

In the same case cited above (Su v. Siemens), an employee foreman made safety-related claims both to a subcontractor (his direct employer) and the general contractor that had overall responsibility for the worksite. When the employee was terminated, he alleged retaliation against both the subcontractor and the general contractor.

However, the Court held that the OSHA retaliation statute applied only to "direct employers" of the complaining employee, and dismissed the claims against the general contractor. This is despite the fact that existing California law already recognizes the general contractor as a "controlling employer" that may be cited for workplace safety violations.

Another example of this gap in existing retaliation law arose in the context of legislation enacted last year (AB 1897) related to "client employer" liability for workers provided by a labor contractor.

During legislative testimony on that bill, a hotel worker from Southern California testified that she had been hired by a labor contractor to perform work cleaning rooms at a hotel. When she complained to the manager of the hotel that she was not receiving breaks as required under existing law, she alleged that the hotel manager called the labor contractor and instructed them not to send the employee to work at their hotel any longer, in retaliation for the complaint she had made about unlawful working conditions.

According to the author, both of these examples highlight a gap in existing law in which the employer who has primary control over the worksite can engage in retaliatory conduct against an employee, but hide behind another entity to "shield" them self from liability. Current law provides little or no protection to such an employee who suffers the same retaliation that California's laws are designed to prevent. AB 1509 Page 4 Therefore, this bill will provide that existing prohibitions against retaliation apply to a "client employer" or a "controlling employer."

ARGUMENTS IN SUPPORT

Supporters state that this bill will fill in the gaps in the law of retaliation by clarifying that existing prohibitions against retaliation apply to a "client employer" or a "controlling employer." In addition, it will clarify that an employer cannot retaliate against a worker because that worker is related to another worker who engaged in protected activity.

They note that today’s temporary and contract workforce is concentrated in blue-collar jobs and manual labor. Third party labor suppliers are being used to provide low cost “perma-temps” to do strenuous and often dangerous work for years on end. In light of these trends, retaliation has become harder to address. Temporary workers by definition have no guarantee of work so a worker can easily be punished for speaking out. Employers use the threat of terminating the contract with the staffing agency or contractor if workers exercise protected labor rights. These types of retaliation are hard to prove and hard to remedy. They argue that this highlights a gap in existing law in which the employer who has primary control over the worksite can engage in retaliatory conduct against an employee, but hide behind another entity as a "shield" from liability. In addition, supporters contend that family retaliation is an especially common practice employed against immigrant workers, who frequently find work alongside family members in the fields, warehouses, and hotels of California. Immigrant workers also make up the majority of workers in the subcontracted economy. Such retaliation must clearly be prohibited to ensure that workers can speak out about unlawful practices without fear of reprisals against family members.

REGISTERED SUPPORT / OPPOSITION:

Support

California Labor Federation, AFL-CIO (sponsor) California Employment Lawyers Association California Rural Legal Assistance Foundation American Federation of State, County and Municipal Employees

Opposition

None on file.

Analysis Prepared by: Ben Ebbink / L. & E. / (916) 319-2091