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  • Kevin Cleveland

California Legislature At It Again

A third of the way through 2018 already, and the California Legislature is hard at work creating new laws to damage California businesses. It is unclear if their intention is to drive us out of the state or merely that they lack the understanding of the impact that these silly laws have. The following is a list of bills and a brief description of their content so that business owners may be aware, and may even want to take action, to complain about such legislation before it is too late.

1. Assembly Bill 1761 (Introduced by Assembly Member Muratsuchi from Torrance): This legislation is labeled “Customer Blacklist and Hotel Workers’ Panic Button.” It denies hotel guests due process, by requiring hotels to create a “blacklist” of guests who have been accused of having engaged in inappropriate conduct towards hotel employees. These are not proven accusations; merely claims made. The Bill prohibits hotels from allowing those guests on the blacklist to enter their properties for a period of up to three (3) years. It is unclear whether these lists will be shared amongst hotels and/or each hotel will maintain its own, but it could result in massive lawsuits against hotel owners by visiting guests when they are labeled, but not proven guilty, of any misconduct.

2. Assembly Bill 1902 (Introduced by Assembly Member Levine from San Rafael): This Bill could be labeled “Interference with Contract.” This legislation will impact “personal service contracts” (as defined in the legislation) and will require that these contracts be priced based on an undefined and unspecified “area income” rate. It appears that “this area income rate” may include wage rates from different industries and different occupations that have nothing in common with the personal services being provided. The new legislation would also grant the Department of Industrial Relations new authority to value companies, and determine if similar services are included under the provisions of the bill, what constitutes the proper “area income”.

3. Assembly Bill 2069 (Introduced by Assembly Member Bonta from Oakland): This legislation is aimed at the current fashionable waive of pro marijuana use in the state and prohibits an employer from terminating or otherwise taking negative action against employees who are using medical marijuana while working. The legislation purports to create a new protected class under the Fair Employment & Housing Act (“FEHA”) having to do with “medical marijuana” users. Allowing employees to work while “high” puts employers in an untenable situation and unable to provide safe work environments.

4. Assembly Bill 2765 (Introduced by Assembly Member Low from Campbell): This legislation would regulate the “digital market place” by including those economies and businesses under the provisions of the Fair Employment & Housing Act and expanding the protected classifications under FEHA. The new classifications would include contractors and family members of contractors working in the digital market place. This legislation would also create further uncertainty with regard to the distinction between “employee” and “independent contractor”, and increase litigation under the Private Attorneys General Act (“PAGA”) in the digital market place.

5. Assembly Bill 3080 (Introduced by Assembly Member Gonzalez-Fletcher from San Diego): This legislation would prohibit settlement agreements in labor and employment claims, as well as banning arbitration agreements made as a condition of employment. It is likely that even if passed in California this last portion prohibiting arbitration agreements would be found unlawful under the Federal Arbitration Act. However, if passed it will certainly increase litigation which benefits to trial attorneys, and may stand in the way of private resolution of disputes between employers and employees.

6. Senate Bill 1284 (Introduced by Senator Jackson from Santa Barbara): This Bill would require California employers to provide “pay data” to the California Department of Industrial Relations. When submitted in the format described, this data could create a false impression of wage discrimination or unequal pay, even where none exists, and subject employers to unfair criticism, enforcement measures and significant litigation costs to defend against meritless claims.

7. Senate Bill 1300 (Introduced by Senator Jackson from Santa Barbara): This legislation would allow any person to file a lawsuit alleging failure to prevent harassment or discrimination, even when no harassment occurs. The legislation does not require that the individual be an “affected” party, or establish “standing”. The Bill limits the use of severance agreements and prohibits the use of general releases or non-disparagement clauses in employer and employee contracts.

8. Senate Bill 562 (Introduced by Senator Lara from Bell Gardens): Government run healthcare is here! This law if passed, would create a new statewide, “single payor”, government run healthcare program under the auspices of the California State government. The Bill does not provide for funding, but simply references a “revenue plan.” This should be read to include new and substantial taxes on all Californians as well as business owners.

After reviewing this list of Bills, it should be obvious that the California Legislature is not interested in benefiting businesses. The Employers’ Council, on the other hand, is! Employers are again encouraged to have their employee handbooks updated and to provide training for management (and even rank-and-file workers) when appropriate. Employers should be advised that the mandatory harassment training for businesses with 50 or more employees has been expanded again and must now include not only an interactive component, but must address sexual harassment, abusive conduct (added in the last 2 years) and a sequent on transgender rights in the workplace (added this year). Employers interested in such training may contact Dave Cohen at The Employers’ Council for guidance and to schedule such activity.

Members of The Employers’ Council are also reminded that they have access to an Annual Consultation at no charge, and are encouraged to take advantage of this service as it often reveals weaknesses and areas of concern which can be rectified and/or corrected to avoid liability. Although we do not like to be “alarmists”, employees and their attorneys are now, more than ever, bringing class action and PAGA lawsuits which are extremely expensive to defend. It is easier to avoid than to fix after the fact. For further information about the legislation above and/or the services provided by The Employers’ Council, please contact Dave Cohen at or (916) 927-8797.

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