By Anthony P. Raimondo
It is mixed news from the agricultural industry as Governor Jerry Brown took action on important legislation for California agriculture. Governor Brown vetoed SB 25, a bill that would have amended the Agricultural Labor Relations Act to make it easier for unions to force contracts on farmers.
Under current law, employers with 25 or more employees who are negotiating their first contracts with a union can be forced into “mandatory mediation.” This is not mediation at all, but a procedure known as “interest arbitration.” In this process, the employer and the union present their proposals to the arbitrator, and argue and present evidence as to why their position should be the final contract. The arbitrator decides what the contract will be, and the ALRB forces the contract on the farmer and the workers with an order that is enforceable in court. Under current law, the contract is not implemented while the farmer appeals. The proposed bill would have made it nearly impossible for a farmer to avoid implementation of a contract during an appeal, virtually rendering the appeal meaningless. Also, for older certifications, the bill removed the obligation to show that the employer committed an unfair labor practice before taking them to the mandatory mediation process. Thankfully, Governor Brown restrained himself from signing this unfair and oppressive legislation.
In a crushing blow to California’s business community, Governor Brown signed legislation that will hold employers liable liable when subcontractors violate wage, workplace safety or workers’ compensation rules. AB 1897 makes employers legally responsible and liable for the actions of labor contractors and staffing agencies with respect to workers supplied by that labor contractor. The bill makes employers responsible for the payment of wages and the failure to obtain valid workers’ compensation coverage, and prohibits an employer from shifting responsibility for workplace safety to the labor contractor. The bill states that it does not prohibit client employers and labor contractors from mutually contracting for otherwise lawful remedies for breach of contract by the other party, but prohibits the employer from shifting all responsibility and liability to the contractor.
The legislation was a labor movement priority of organized labor, and was labeled a “job killer” by the California Chamber of Commerce.
“Worker protection laws in California are already in place for labor violations and should be enforced,” John Kabateck, executive director of the California chapter of the National Federation of Independent Business, said at a news conference at the Capitol last week. “The only thing this bill is going to do is hurt our state’s economy and jobs.”
While the bill is by every measure a disaster for business, it does not fundamentally alter the risks of using labor contractors. Even under prior law, it was very rare for employers to be able to shift all legal responsibility and liability to contractors because the law recognizes joint employment – when an employer has more than one employer at a time.
There are many good reasons to use a reputable labor contractor, but the desire to avoid responsibility for labor compliance is not one of them. A good labor contractor can be a reliable source of labor, and can provide safety, human resource, payroll, and recordkeeping compliance. So while the bill is certainly nothing to celebrate, it does not deprive employers of the advantages offered by reputable labor contractors.
The goal of this article is to provide employers with current labor and employment law information. The contents should not be interpreted or construed as legal advice or opinion. For individual responses to questions or concerns regarding any given situation, the reader should consult with Anthony Raimondo at Raimondo & Associates in Fresno, at (559) 432-3000.