VOLUME 36, NUMBER 31 ● NOVEMBER 5, 2010 ®

Jerry Brown Returns to Governor’s Offi ce

California voters returned Jerry Brown He gained 50.5 percent of the vote, to the Governor’s offi ce on Tuesday by compared to 37.8 percent for Mike a large margin, as well as electing other Villines, a Republican Assembly member Democrats to fi ll statewide offi ces. from Clovis. With a campaign message of “living The non-partisan position of within our means” and no new taxes superintendent of public instruction went without a vote of the people, Brown won to Tom Torlakson, a current Democratic 54 percent of the vote to 41 percent for Assembly member from Contra Costa Republican Meg Whitman. who ran as a second generation teacher, In the high-profi le race for U.S. touting his classroom experience. Senate, Democratic incumbent Barbara Torlakson won 54.6 percent of the vote to Boxer held off a challenge by Republican 45.4 percent for Larry Aceves, a former Carly Fiorina, winning by a margin of 52 county superintendent of schools. percent to 43 percent. Among the other statewide races, only Congress/Legislature the campaign for attorney general was too Democrats continue to hold a majority close to call as Alert went to press. San of positions in both the Francisco District Attorney Kamala Harris congressional delegation and both houses was leading County District of the California Legislature. Attorney Steve Cooley by just under 9,000 Governor-Elect Jerry Brown Incumbent Congressman Jerry votes, 45.9 percent to 45.8 percent. McNerney (D-Pleasanton) was just 121 won 53 percent of the vote to 38.6 votes ahead of his Republican opponent, Statewide Offi ces percent for Republican Damon Dunn. David Harmer, in the 11th Congressional Serving with Brown as lieutenant Treasurer Bill Lockyer, also a District. governor will be Gavin Newsom, the Democrat, won 56.4 percent of the In the 20th Congressional District, Democratic mayor of San Francisco. vote, compared to 36.5 percent for the anti-incumbent sentiment of voters He won 50 percent of the vote to 39.5 his challenger, Senator Mimi Walters resulted in incumbent Democrat Jim percent for Republican Abel Maldonado, (R-Laguna Niguel). Costa losing to Republican challenger the current lieutenant governor. Dave Jones, a Democratic Assembly Andy Vidak, 48.5 percent to 51.5 percent. Secretary of State Debra Bowen, a member from Sacramento, won the Democrats picked up one seat in the Democrat, will return to offi ce, having campaign for insurance commissioner. California Assembly and will hold 52 seats when the new legislative session begins in December, still short of the 54 Assembly Republicans Choose New Leader needed for a two-thirds majority. The party balance in the Senate remained the same at 25 Democrats, 15 Republicans Connie Conway of Tulare has been Republican leader since 1981. (27 votes make a two-thirds majority). chosen by Assembly Republicans as their Conway represents Assembly The latest election results are available new leader. District 34, which includes Inyo County at www.sos.ca.gov. She succeeds Martin Garrick of and parts of Kern, San Bernardino and Carlsbad, who did not choose to seek Tulare counties. a second term as leader, according Before being elected to the Assembly, Inside to a news release from the Assembly she served eight years on the Tulare Republican Caucus. County Board of Supervisors. She also • Commentary on Election: Page 3 Conway was elected to her second served as president of the California State term in the Assembly this week. She is Association of Counties. • Proposition 19: Page 4 the fi rst woman to serve as Assembly NOVEMBER 5, 2010 ● PAGE 2 CALIFORNIA CHAMBER OF COMMERCE

Labor Law Corner Set Guidelines for Social Media Use to Help Prevent Diffi cult Situations

Labor Code Section 96(k) protects an recommendation, and therefore should employee engaging in “lawful conduct proceed with caution. occurring during nonworking hours away from the employer’s premises.” In Suggested Guidelines addition, all employees have the right to To help prevent diffi cult situations, freedom of speech as guaranteed in both it is advisable for employers to issue the U.S. and California constitutions. guidelines to their employees. Some recommendations include: Defamatory Comments ● Prohibit the use of their blogs and Dana Leisinger HR Advisor That right, however, is not without posts during business hours. limits. It is impermissible to post ● Give notice that misuse of social I have an employee who posted some very defamatory comments on social media, media may be grounds for disciplinary negative comments about our company and employers can pursue legal remedies action, up to and including termination. on his Facebook page. Can I take action when blatantly defamatory comments are ● Ask that employees bring any against this employee based on the posted for everyone to read. complaints to the company’s human Facebook comments? Another example of when an employer resources contact versus posting on the The rapid growth of the social media, can take action is when employees brag Internet. including Facebook, Twitter, LinkedIn, about misconduct on their Facebook ● Prohibit employees from revealing Plaxo, and many more, have raised a lot of page, such as calling in sick when they the employer’s confi dential information issues for employers, including the proper want to go skiing, revealing confi dential or trade secrets on social media. response to the question posed above. information about the company, or This list is by no means all inclusive, even posting about spitting in food by and it is recommended that employers a restaurant worker (yes, this was a consult their attorneys to draft appropriate question the Helpline received!). language. California Chamber Offi cers The more diffi cult issue is when Employers cannot ignore social media Larree M. Renda an employee posts his/her opinion, use, however. They must understand Chair which might not be pleasant, but isn’t all the issues involved, and then draft S. Shariq Yosufzai specifi cally actionable. An employee can policies and procedures to address those First Vice Chair cause awkward, even possibly harassing concerns accordingly. Timothy S. Dubois situations by misuse of social media. Second Vice Chair Additional diffi cult situations result The Labor Law Helpline is a service when former employees ask their former to California Chamber of Commerce Frederick E. Hitchcock bosses to provide references, often preferred and executive members. For expert Third Vice Chair on LinkedIn. Supervisors who do so explanations of labor laws and Cal/OSHA Frederick R. Ruiz should be aware that such a reference regulations, not legal counsel for specifi c Immediate Past Chair situations, call (800) 348-2262 or submit your has the force and effect of a written question at www.hrcalifornia.com. Allan Zaremberg President and Chief Executive Offi cer

Alert (ISSN 0882-0929) is published weekly during legislative session with exceptions by CalChamber-Sponsored Seminars/Trade Shows California Chamber of Commerce, 1215 K Street, Suite 1400, Sacramento, CA 95814- More information at Delhi and Bangalore. (559) 324-6401. 3918. Subscription price is $50 paid through membership dues. Periodicals Postage Paid at www.calchamber.com/events. Webinar: Dried Fruit Opportunities Sacramento, CA. Business Resources in Mexico. U.S. Department of POSTMASTER: Send address changes to Preventing Workplace Fraud Webinar On Agriculture, California Department of Alert, 1215 K Street, Suite 1400, Sacramento, Demand. CalChamber. (800) 331-8877. Food and Agriculture. November 16. CA 95814-3918. Publisher: Allan Zaremberg. International Trade (916) 563-3200. Executive Editor: Ann Amioka. Art Director: Marcy Wacker. Capitol Correspondent: China International Industry Fair. Asia Society Green Finance Conference. Christine Haddon. Photographer: Megan Wood. Shanghai World Expo Group. Asia Society Northern California. November 9–13, Shanghai. December 8, San Francisco. Permission granted to reprint articles if credit is given to the California Chamber of Com- [email protected]. (415) 421-8707. merce Alert, and reprint is mailed to Alert at Sri Lanka Design Festival. Academy of address above. Design. November 11–17, Sri Lanka. E-mail: [email protected]. [email protected]. Home page: www.calchamber.com. Outbound Mission to India. Western Next Alert: U.S. Agricultural Trade Association (WUSATA). November 13–20, India, November 19 CALIFORNIA CHAMBER OF COMMERCE NOVEMBER 5, 2010 ● PAGE 3

Voters Show Concern About Jobs, Economy

Although many pundits will write that the supported removing the Legislature’s national Republican tidal wave stopped involvement in reapportionment, when at the Sierra Nevada mountains, a closer they defeated Proposition 27, which analysis indicates that California voters would have eliminated the Citizens are no less concerned about the direction Redistricting Commission, and passed of government, employment issues and Proposition 20, which extends the defi cit spending than the rest of the commission’s authority to redrawing country. congressional districts. California is a state with an overwhelming registration advantage for Jobs: No. 1 Issue Democrats, which certainly has an impact So what does all this mean for the on statewide candidate races. business community and doing business But, if Jerry Brown received a in California? mandate from the voters, it is to follow Even though the anti-incumbent through on his pledges for the state to attitude in the rest of the country did “live within its means” and to adopt no not prevail in California, we do know new taxes without a vote of the people. that jobs were the No. 1 issue for voters. Since the beginning of May, the Mood of Voters CalChamber’s action plan to promote An analysis of the outcome of the economic recovery and job creation ballot propositions serves only to has been posted on our website. Some reinforce the mood of the voters. elements of that action plan appeared ● Proposition 21, an $18-per-vehicle to be part of Governor-Elect Brown’s fee increase to fund state parks, was platform. soundly rejected, even though there was Over the next couple of months, we little opposition. will be preparing the CalChamber’s ● Proposition 22, which was approved, Commentary comprehensive annual guide to major limits the ability for the state to use local By Allan Zaremberg business issues. Although the Business government funds to balance the state Issues and Legislative Guide normally budget. Clearly, this shows a distrust of is not published and distributed until the Legislature to solve the January, we will make it state’s fi scal issues with local available to Governor-Elect government resources. Brown and his transition ● Proposition 24, which team in advance to provide would have reinstated taxes “…a closer analysis indicates that California background on some of the on California companies that voters are no less concerned about the direction issues we think will improve invest in jobs and property, both the California economy was overwhelmingly defeated of government, employment issues and defi cit and the revenues it generates despite an aggressively spending than the rest of the country.” for the state and local funded “yes” campaign by the governments. teachers’ union. I have said many times ● Proposition 26, sponsored that advocacy at CalChamber by the California Chamber is not about a political of Commerce, clearly defi nes fees and philosophy. It is about doing what’s taxes at the state and local levels so that best for business and the political governments can’t pass real taxes with a provision that will withhold legislators’ process. Our job is to work with the new simple majority vote. In spite of a well- pay if the budget is late and the ballot administration to ensure that it has the fi nanced “no” campaign and a confusing label referencing intent language that benefi t of the business community’s ideas ballot label, the voters approved the measure maintains the two-thirds on what it will take to move our economy this measure, indicating a desire for vote for tax increases. (We believe, forward. transparency in their government. however, that the Legislature will try to ● Although the CalChamber opposed implement majority vote taxes because of Allan Zaremberg is president and chief Proposition 25, the majority vote budget Proposition 25.) executive offi cer of the California measure, it passed, mostly because of the ● Finally, the voters overwhelmingly Chamber of Commerce. NOVEMBER 5, 2010 ● PAGE 4 CALIFORNIA CHAMBER OF COMMERCE

CalChamber Radio Ads, Legal Analysis Help Turn Tide Against Marijuana Initiative

California voters employment law advisor that was of proving that an employee who tested this week soundly released in August. positive for marijuana was “actually rejected California Proposition 19 sought to legalize the impaired” from performing the job before Chamber of cultivation, processing, transportation, taking any adverse action against the Commerce- distribution and sale of marijuana for employee. opposed personal use in California. Employers would have been Proposition 19, The measure was written in a way that prohibited from discriminating against which would have blurred the line for employers regarding marijuana users by taking marijuana legalized pot use important workplace issues, however, use into account when deciding whether in California, but including whether employers must allow to hire an applicant. Any marijuana- also would have marijuana smoking at work and who smoking job applicant not hired could created a legal quagmire for employers, would pay for marijuana-related accidents. have fi led a lawsuit claiming marijuana compromised workplace safety and The measure established a new, higher, use was the reason, even if the employer established a new class of protected but yet-undefi ned standard of “actual had no knowledge of the use. workers in the state. impairment.” Moreover, unlike alcohol use, which As Alert went to press, Proposition As CalChamber General Counsel employers can prohibit at work, under 19 had failed with 54 percent of voters Erika Frank explained at a joint Proposition 19, employers could have rejecting the measure and 46 percent legislative committee hearing in taken action only for marijuana use that supporting it. September, the vague wording in “actually impairs” work performance. Until a couple of weeks before the Proposition 19 would have made Frank reiterated in her testimony that the election, polling showed that Proposition sweeping changes to the way that term “actually impairs” is a new legal 19 was likely to pass. employers do business and would standard that has never been defi ned have required employers to offer extra or tested in court. The lack of a clear CalChamber Radio Ad protections to marijuana users. defi nition would have forced a delay In late October, CalChamber began If the measure had been approved, in disciplinary actions used to protect running radio ads educating voters about employers, including the State of workplace safety and driven up costs due how the initiative would undermine California, would have faced the burden to increased litigation. the rights of employers to ensure their workers are not high, raising the risk of injury, lawsuits and increased insurance costs. CalBusPAC, the CalChamber’s issues PAC, commissioned a statewide survey to determine the message for a paid media campaign and funded the statewide radio ad campaign. In an interview with the Los Angeles Times, Denise Davis, CalChamber vice president of media relations and external affairs, explained, “When people understand what would happen in the workplace when this becomes law, they are inclined to vote no.” Legal Analysis Another key to the successful campaign was the CalChamber legal analysis, used by all the major papers that editorialized against Proposition 19. CalChamber’s products division began looking into the employer implications if Proposition 19 were to become law Wood Photo by Megan in July. That initial review raised many Erika Frank, CalChamber general counsel, outlined at a joint legislative committee hearing in questions and led to the preparation of September how Proposition 19, the marijuana initiative on the November ballot, would have the full legal analysis by CalChamber’s compromised workplace safety and established a new class of protected workers in the state. CALIFORNIA CHAMBER OF COMMERCE NOVEMBER 5, 2010 ● PAGE 5

Voters Say ‘Yes’ to Majority Vote Budget, But Also Back Two-Thirds Vote on ‘Fees’

Voters approved allowing legislators Ballot Language to pass the budget and related spending bills with just a majority The ballot label on Proposition 25 vote, but also backed a measure noted that it “Retains Two-Thirds Vote requiring that certain state and local Requirement for Taxes.” ‘fees’ be approved by a two-thirds In addition, Proposition 25 provides vote. that legislators will permanently forfeit Proposition 25, the majority vote daily reimbursement for salary and budget measure, passed with 55 expenses until the budget bill passes. percent of voters in support and 45 In opposing Proposition 25, the percent against. CalChamber argued that it will give Proposition 26, requiring state the majority party too much power and and local hidden taxes be approved eliminate the option of referendum for by a two-thirds vote, passed with fees or fee increases that are part of a 53 percent of the vote, versus 47 budget appropriation. percent opposition. The measure exempts the budget The California Chamber of bill and other bills providing for Commerce led the campaign appropriations related to the budget in support of Proposition bill from the existing two-thirds vote 26 to clearly defi ne fees requirement, and provides that those take and taxes so that effect immediately. real taxes can’t Proposition 26 be adopted with only a Proposition 26 requires that certain majority state fees be approved by two-thirds vote vote. of the Legislature and certain local fees be approved by two-thirds of the voters. The measure also increases the legislative vote requirement to two-thirds for certain tax measures, including those that do not result in a net increase in revenue, currently subject to majority vote. Proposition 26 closes a loophole in the law that allows the Legislature to raise taxes on products and services by a majority vote simply by calling Proposition 26 them “fees” instead Two-Thirds Vote on of taxes. Some State/Local Fees The CalChamber argued that hidden taxes Yes 52.9% and fees work against job creation, driving businesses out No 47.1% of California and forcing many small businesses to close. See Election: Page 6 NOVEMBER 5, 2010 ● PAGE 6 CALIFORNIA CHAMBER OF COMMERCE

Voters Keep Redistricting Commission, Extend Authority for Congressional Remaps

California voters Only San Francisco County voted to Citizens Commission kept the task of approve Proposition 27, 51 percent to 49 redrawing political percent, and to oppose Proposition 20, 54 The CalChamber believes California district boundaries percent “no” to 46 percent yes. cannot afford to return to a system in the hands where the politicians select their voters. of the Citizens Election Reform Although the 2008 measure creating Redistricting the Citizens Redistricting Commission CalChamber supported Proposition was not popular with politicians, it Commission and 20 as a critically important part of extended the was strongly supported by a bipartisan election reform, helping to make the coalition of consumer, senior, public commission’s congressional redistricting process more assignment to interest, taxpayer, community and open, fair and transparent, in addition to business groups. congressional districts. increasing competition in elections. Voters rejected Proposition 27, which The fi rst phase of the application Currently, there are 53 congressional process to become a member of the would have eliminating the Citizens districts in California—34 Democrat Redistricting Commission created by Citizens Redistricting Commission members and 19 Republican members. ran from December 15, 2009 through the California Chamber of Commerce- Only one seat has changed parties over supported reform initiative of 2008. February 16, 2010. the last decade when Democrat Jerry Applicants who were tentatively Nearly 60 percent of voters said “no” McNerney defeated Republican Richard to Proposition 27, while about 41 percent eligible based on information they Pombo in the 11th Congressional District provided in the fi rst application were voted “yes.” in 2006. Those percentages were reversed invited to complete the supplemental As Alert went to press following the application and return it by April 19. for Proposition 20, which extends to November 2 election, only 121 votes the Citizens Redistricting Commission The Applicant Review Panel on separated McNerney from his Republican September 29 submitted to legislative the additional authority to draw new opponent, David Harmer. boundaries for U.S. congressional leadership the names of 60 of the most In the 20th Congressional District, qualifi ed applicants—20 Republicans, districts in 2011. incumbent Democrat Jim Costa was Proposition 20 was supported by 20 Democrats, and 20 not affi liated with losing to Republican challenger Andy either of those two parties. Legislative 61.2 percent of voters, with 38.8 percent Vidak, with 48.5 percent of the vote to opposing the measure. leaders can strike up to eight names from Vidak’s 51.5 percent. each of the three groups. Legislative leaders are to return the list by November 15. By November 20, there Election Results on Propositions will be a random selection of the fi rst eight commissioners, who have until From Page 5 greenhouse gas emissions be reduced December 31 to select the remaining six. to 1990 levels by 2020 until California The commission is to begin work by Other Measures unemployment drops to 5.5 percent January 1, 2011. In other election results: or less for four consecutive quarters. For more information about the ● Proposition 21 would have Proposition 23 failed, 39 percent to 61 commission visit WeDrawTheLines.ca.gov. established an $18 annual vehicle percent. CalChamber had no position on license surcharge to help fund state Proposition 23. parks and wildlife programs. The ● Proposition 24 would have repealed CalChamber Calendar initiative failed to pass, 42 percent to 58 recent legislation that would: allow percent. CalChamber had no position on businesses to shift operating losses to Public Affairs Council Post-Election Proposition 21. prior tax years and that would extend the Retreat: November 10–12, Riverside ● California voters passed period permitted to shift operating losses Business Services Committee: CalChamber-supported Proposition 22, to future tax years; allow corporations December 2, San Francisco 61percent to 39 percent. Proposition to share tax credits with affi liated Board of Directors: 22 prohibits the state, even during a corporations; and allow multistate December 2–3, San Francisco severe fi scal hardship, from delaying businesses to use a sales-based income International Trade Breakfast: the distribution of tax revenues for calculation rather than a combination December 3, San Francisco transportation, redevelopment or local property-, payroll- and sales-based Annual Meeting: government projects and services. income calculation. The CalChamber- December 3, San Francisco ● Proposition 23 would have opposed measure failed, 41.5 percent to Fundraising Committee: suspended state law that requires 58.5 percent. December 3, San Francisco CALIFORNIA CHAMBER OF COMMERCE NOVEMBER 5, 2010 ● PAGE 7

Business Support Leads to Victory for Pro-Jobs Candidates in Key Races

Support from a longtime community leader, with 62 County and part of Fresno, Kern and business-supported percent of the vote to her 38 percent. Tulare counties. independent ● In Senate District 34, incumbent The seat is currently held by Danny expenditure Senator Lou Correa (Santa Ana), the Gilmore (R-Hanford), who chose not to committee Democrat ranking highest in CalChamber seek re-election. helped pro- vote records, won with 64 percent of the Campaigns in both Senate District jobs candidates vote. 12 and Assembly District 30 were hard prevail in several The general election victories fought. Democrats would have been one- legislative followed a major special election win in vote closer to a two-thirds, veto-proof districts. Senate District 15 for Assemblyman Sam majority in both houses of the Legislature The California Chamber of Commerce Blakeslee (R-San Luis Obispo), which if their candidate had won either seat. is a major supporter of JobsPAC, which also helped maintain the current party has been backing pro-jobs candidates ratio in the Senate (see June 25 Alert). Primary Victory running in open legislative seats since In the primary election, JobsPAC Senate District 40 includes parts of 1992. support helped former Assemblyman and Riverside counties, and all In the November general election, secure a 22-vote victory over of Imperial County. Incumbent Senator JobsPAC helped boost the following a fellow Democrat, Assemblywoman Denise Moreno Ducheny of San Diego candidates to victory: Mary Salas, in Senate District 40. has reached her term limit. ● In Senate District 12, Anthony Vargas served in the Assembly from Cannella, the Republican mayor of Ceres, General Election 2001 to 2006. His CalChamber vote defeated Anna Caballero, a Democratic Senate District 12 includes Merced records placed him among the more Assembly member and former mayor of and San Benito counties, along with parts moderate Democrats in his last term in Salinas, with 53 percent of the vote to of Madera, Monterey and Stanislaus offi ce, before he reached his term limit in her 47 percent. This was a key race in counties. 2006. keeping the Senate at the same balance of The seat is currently held by Jeff Salas, who succeeded Vargas in 25 Democrats and 15 Republicans. Denham (R-Merced), who was elected to Assembly District 79, has been among ● In Assembly District 30, David Congress and has consistently supported the Democratic Assembly members Valadao, a Republican dairy farmer, CalChamber positions. ranking lower on the CalChamber vote defeated Fran Florez, a Democrat and Assembly District 30 includes Kings record.

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