Effective opposition led by the California Chamber of Commerce has stopped SB 399, a job killer bill that stifles employer speech, from advancing this year.
CalChamber efforts also have helped stall a number of problematic bills that will increase business costs and expose employers to costly litigation. These bills have been placed on the suspense file in the Assembly or Senate Appropriations committees and will need to make it out of these fiscal committees by September 1 in order to continue moving through the legislative process.
Among the bills the CalChamber will be monitoring this week is a job killer bill that imposes an onerous return to work mandate.
Job Killer Stopped for the Year
Job killer bill SB 399 (Wahab; D-Hayward) has been stopped for the year and is now a two-year bill—meaning that legislators may bring it up for consideration again next year.
SB 399 chills employer speech regarding religious and political matters, including unionization. The bill is likely unconstitutional under the First Amendment and preempted by the National Labor Relations Act (NLRA).
SB 399 effectively prohibits discussions regarding political matters in the workplace, specifically preventing employers from requiring employees to attend “an employer-sponsored meeting” or “participate in, receive, or listen to any communications with the employer” where the purpose is to communicate the employer’s opinion “about” political matters.
In an opposition letter, the CalChamber pointed out that the intent of SB 399 is to effectively chill any communications by the employer or in the workplace about political matters.
Because SB 399 creates a new section of the Labor Code, any good faith error in interpreting the bill or its exceptions creates liability under the Private Attorneys General Act (PAGA), which carries significant penalties of $100 to $200 per employee per pay period.
Moreover, California and federal law already protect against employer coercion related to political matters. For example, the NLRA prohibits employers from making any threats to employees, interfering with or restraining exercise of their rights, coercing employees, or promising benefits to employees for voting a certain way in a union election, the CalChamber explained.
Return to Work Mandate
On Wednesday, the Assembly Appropriations Committee is scheduled to consider SB 627 (Smallwood-Cuevas; D-Los Angeles).
This job killer bill imposes an onerous and stringent process to hire employees based on seniority alone for nearly every industry, including hospitals, retail, restaurants, and movie theaters, which will delay hiring and eliminates contracts for at-will employment.
The bill forces an employer to send notices to all eligible, qualified employees for an available position and then wait five business days before analyzing acceptance offers based upon seniority. In an opposition letter sent to legislators, the CalChamber pointed out that under SB 93 (2021) and similar local ordinances, this waiting period has slowed hiring and SB 627 will have the same impact.
Another problematic aspect of SB 627 is that it forces employers to hire based on seniority, not skill. The bill ties the employer’s hands as far as hiring because they are allowed to consider only seniority, not who is most qualified for the job.
The CalChamber also warned that SB 627 likely violates the contracts clauses of the U.S. and California constitutions because it modifies existing at-will contracts. Any law that substantially impairs pre-existing contractual obligations violates the contracts clauses of both the federal and California constitutions.
SB 627 creates a novel, long-lasting retroactive right. Under California law, and absent an agreement otherwise, all “employment may be terminated at the will of either party on notice to the other” (Labor Code Section 2922), the CalChamber explained. Nearly every employment agreement in California either impliedly or expressly recognizes the at-will nature of the relationship. Employers hired workers assuming that, if the viability of their business was threatened, they could lay off these workers without granting them a possible cause of action.
“Given the fact that there is no justification for SB 627 and its broad applicability to nearly every industry without any limitation in time or scope, it is unlikely that the state would be able to show that SB 627 is ‘appropriate and reasonable’ in serving a specific interest,” the CalChamber said.
The following are some of the bills that are currently stalled:
- SB 253 (Wiener; D-San Francisco): Imposes a mandatory climate tracking, and auditing on climate emissions that will fall heavily on all California businesses, impacting competitiveness and increasing costs. In Assembly Appropriations Suspense File.
- SB 616 (Gonzalez; D-Long Beach): Imposes new costs and leave requirements on employers of all sizes, by more than doubling existing sick leave mandate, which is in addition to all other enacted leave mandates that small employers throughout the state are already struggling with to implement and comply. In Assembly Appropriations Suspense File.
- AB 594 (Maienschein; D-San Diego): Allows all public prosecutors to enforce significant portion of the Labor Code, risking inconsistent enforcement and with no protection against additional recovery under a subsequent Private Attorneys General Act (PAGA) lawsuit. In Senate Appropriations Suspense File.
- AB 524 (Wicks; D-Oakland): Exposes employers to costly litigation under the Fair Employment and Housing Act by asserting that any adverse employment action was in relation to the employee’s family caregiver status, which is broadly defined to include any employee who contributes to the care of any person of their choosing, and creates a de facto accommodation requirement that will burden small businesses. In Senate Appropriations Suspense File.