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E-236 - Thursday, July 11, 2019
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RECENT AURAL PLEASURE:
IN TODAY'S NOONER:
Happy Thursday! You're almost there.
It's been a crazy week and I'll be building the outlines this afternoon for our podcast recordings tomorrow for "What a Week" and Lieutenant Governor Eleni Kounalakis on Monday. There are way too many topics to cover, so let us know what you'd like us to focus on!
I'm just going to get to a few issues today but I'll be back tomorrow, the next day, etc. No summer recess for The Nooner! We can finally talk more about politics and 2020.
Yesterday was a cray-cray day in the Capitol as policy committees frenetically tried to put a wrap on their work by the pre-recess deadline.
Contractors, vapes, and Vaxx, oh my!
VAXX: Assemblywoman Lorena Gonzalez (D-San Diego) presided over an Assembly Appropriations Committee hearing to take testimony on SB 276 (Pan) before placing the bill that would tighten medical exemptions for vaccinations on the committee's Suspense File. While there was plenty of nastiness during the hearing with opponents of the bill making it personal against chair Gonzalez, it continued to follow her throughout the day.
Message from bill opponent: "Puppet bitch.. Dumb Latina who things (sic) she’s smart.. You’re another indoctrinated fool.. Can’t wait till you get cancer bitch!"
Consider me shocked that the opponent used "you're" correctly. By the way, Lorena has a bachelor's degree from Stanford University, a master's from Georgetown, and a law degree from UCLA School of Law. Yes, we're working on getting her back on the pod since the previous recording was lost with a hard drive crash. We now have redundancy.
Lorena: "This is just one of the beautiful messages I received last night. I ran an Appropriations meeting yesterday, as I run each of my committee hearings... with very strict rules. To keep from being accused of playing favorites, I always run the committee with the same strict rules. That caused a group of anti-vaxxers to get very mad, create memes about things that I supposedly said (changing the quote of course) and posting vile things not just on my social media but my husband’s and daughter’s."
Lorena goes on to explain her position on vaccinations but also her job as a public official not to block people who she disagrees with.
I've been around the Capitol for 25 years. Is it me or is the acrimony over policy unusually mean-spirited the last few years? Is it about the policy proposals, the national political climate, social media, or a combination thereof?
Candidly, I'm seriously concerned with the safety of many of our public officials. I'm about as absolutist on free speech as anyone because, as Gibran introduces me on the latest podcast, I am "the constitutional scholar who is overly worried with, uh, the Constitution."
I haven't talked to Lorena about this, but I'm guessing she might have a response something like "I'm a proud Latina. And, when you're an asshole and I stop you when you break committee rules for testimony, if that makes me a bitch, so be it."
I would surmise lawmakers of both parties and the entire professional Capitol community would be happy to stand behind her when she says it.
AB 5 (Gonzalez): Worker status: employees and independent contractors. Lorena had a big day yesterday, beyond just chairing the Approps hearing. She had several bills pass out of committee, none of which were bigger than her bill to write the Dynamex decision on independent contractors into the Labor Code. I've written much about the issue, including yesterday and many times before. The Nooner went out before the Senate Labor, Employment and Retirement Committee members spoke and voted 4-1 to advance the bill to Senate Appropriations.
While the four Democrats on the committee voted "aye" on the bill, both chair Jerry Hill and Hannah-Beth Jackson talked about issues that needed to be worked on before it reaches the Senate Floor.
As I wrote yesterday, there are several exemptions in the bill such as for truly independent barbers and cosmetologists that rent a station at a shop. The bill breaks out specified requirements that differentiate from people who are truly in that model and have a book of business (which can include walk-ins), determine their hours, and set their own rates. That differentiates from your fast-food model shops that often have "Cuts" or "Clips" in the name where hours are fixed and prices are posted and uniform by all doing the cutting.
However, there are lots of others that would like to be included, such as on-call make-up artists, seafood harvesters and, most vociferously, trucker "owner-operators." In each of these, there are examples for clear exemption to be "independent contractors" and others example where employers have used the previous 12-factor standard overturned by the California Supreme Court to abuse the category. The problem is drawing a line between the two, as has been done in the bill.
The owner-operator truck drivers were making the strongest arguments yesterday but are not as easy as barber/cosmetologists for which to draw a line. If a driver owns his cab, is dispatched by a company to pick up a load in a trailer owned by that company or a third party with an expected destination arrival time, does that meet the Dynamex conclusion that existing Labor Code requires the application of the "ABC test" that is used in other states.
Under the ABC test, the hiring entity must determine:
(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and
(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and
(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
You can see how the application of the Dynamex decision poses a major problem for the trucking trade's owner-operator drivers. An interesting twist is the increase of Sikh drivers that were the focus of a recent fascinating Los Angeles Times article. These drivers showed up in force yesterday to ask for an exemption.
The other issue in AB 5 is retroactivity. As I wrote on May 3, the Ninth Circuit Court of Appeals held recently that the ABC test conclusion by the California Supreme Court was interpretation of existing Labor Code and thus applies retroactively.
Because the Dynamex (now owned by Montreal-based TFI International) ruling applied only to the class of workers performing duties for Dynamex at the time of the class certification, employers argue that the case opens up the floodgates for lawsuits against employers across the state, some of which have already been sued and lawyers are shopping for plaintiffs as we often see in class actions.
Some version of AB 5 is going to pass this year. Based on testimony and comments from Democratic members yesterday, there will be significant changes to the bill. Exemptions are likely to be added, although drawing satisfactory language acceptable to both sides is a real challenge. Labor unions obviously want to keep them as narrow as possible to allow organization of members, but the criteria varies significantly across industries.
Personally, I agree that the bill should be prospective without affecting the plaintiffs in Dynamex. The state's now-defunct Industrial Welfare Commission issued wage orders enforced by the Division of Labor Standards Enforcement that built the 12-point test used by employers before Dynamex. The Legislature did not seriously step in to the arena until Dynamex. Employers should not be financially penalized for actions taken before Dynamex or the AB 5 language is finalized.
The Legislature should have a clear law for employers to follow going forward, with well-thought-out exemptions. It should not allow a feeding frenzy for plaintiffs lawyers (who I usually side with) in an area of differentiation between state government (Department of Industrial Relations), the Supreme Court of California's interpretation of the Labor Code, and the Legislature's inaction until now to provide a clearer statement of the Labor Code.
More after the jump...
AB 1054 (Holden, Burke and Mayes): Public utilities: wildfires and employee protection. For the AP, Andrew Oxford writes that some cities are not happy with the language of the bill incorporating the conclusions of Governor Newsom's "strike team" on wildfire prevention and utility liability/cost recovery.
"With Pacific Gas & Electric Corp. in bankruptcy amid billions of dollars in wildfire liability claims, some California cities are considering buying off pieces of the utility’s assets and running parts of the power system on their own.
But new legislation aimed at bringing financial stability to PG&E and other utilities could make it harder for local governments to do that.
The bill would add protections for workers and involve regulators if any piece of a utility changes ownership.
Critics see it as a move to stall the purchase of PG&E assets."
This was the argument made on the Senate Floor by Senator Scott Wiener (D-San Francisco) in opposition to the bill. Proponents of the increased oversight argue that much of bankruptcy process is being driven by out-of-state private equity firms that bought up debt for the utility on the cheap. They argue that they are not looking out for what is in the long-term interests of California electricity customers or PG&E workers.
Add that organized labor is generally against moving to publicly operated electricity service, even though labor is generally happy (as I understand it) with such operations in Sacramento, Los Angeles, and Solana Beach. Becoming a part of a publicly operated entity means that collective bargaining agreements and salaries must be disclosed as a public agency.
The bill was just sent to the governor around 10:30 and it will be signed. However, there's a sense that there may be an attempt by these cities, which include San Diego and San Francisco, to get another bill before the year is done to loosen up the new hurdles on municipal utility purchase of assets as a stand-alone issue. Labor will fight but aside from Wiener's passionate please, there was no stopping or amending the final deal that was made public on Saturday and received overwhelming, bipartisan votes in both houses.
Dan Walters writes for CalMatters on the bill in a great piece borrowed on the history many of us have watched:
"Californians should always be skeptical when their politicians overhaul the state’s electrical utility system while promising more efficient, less polluting and reasonably priced service.
As with previous “reforms,” we won’t know the consequences, both real and political, until they happen."
AB 1639 (Gray, Cunningham, and Robert Rivas): The tobacco age verification and flavored e-cigarette restrictings bill was approved 16-0, by Assembly Governmental Organization with amendments. Five members abstained.
I can't do justice to the discussion and amendments today after sitting through a long hearing on the bill yesterday with lots of notes. I'll start writing it up this afternoon for tomorrow. Assembly Health will hear the bill after the Legislature returns from summer recess August 12.
New Nooner classifieds after the jump!