Legislation strongly opposed by the California Chamber of Commerce has been signed by the Governor, who also agreed with CalChamber opposition in vetoing other bills.
Bills signed included:
• AB 1897 (R. Hernández; D-West Covina) Contractor Liability. Unfairly imposes liability on a contracting entity for the contractor’s wage and hour violations and lack of workers’ compensation coverage despite the lack of any evidence that the contracting entity controlled the working conditions or wages of the contractor’s employees.
• AB 2617 (Weber; D-San Diego) Interference with Arbitration Agreements and Settlement Agreements. Unfairly prohibits the enforcement of arbitration agreements or pre-litigation settlement agreements that require the individual to waive their right to pursue a civil action for the alleged violation of civil rights.
• AB 1792 (Gomez; D-Los Angeles) Publicly Shames Employers. Unfairly targets the largest employers in California who have more than 100 employees enrolled in Medi-Cal for inclusion in an online list, exposing them to liability, public protests and media attacks, without regard to the rising cost of health care and other factors that often make health care coverage prohibitively expensive for employers.
Vetoed bills would have opened franchise contracts to litigation, interfered with private contracts, denied due process for agricultural employers, increased workers’ compensation costs for hospitals, and created an unworkable permitting system for hazardous waste facilities.
• Expansion of Litigation for Franchisors. SB 610 (Jackson; D-Santa Barbara) would have unfairly limited a franchisor’s ability to terminate a franchisee agreement with a poor-performing franchise and substantially increased litigation by limiting the termination of a contract to a “substantial, material breach” which is undefined, and can only be pursued after the franchise has been provided a 30-day right to cure.
The coalition opposing SB 610 included franchisors ranging from restaurants to retailers, movers, senior care, maid service, storage units and sports nutrition.
In vetoing SB 610, Governor Edmund G. Brown Jr. commented that the standard in the bill was “new and untested.” The proposed changes, he wrote, “would significantly impact California’s vast franchise industry that relies on the certainty of well-settled laws.”
California franchisors (based in or seeking franchises in California) must file each year with the California Department of Business Oversight. The department reports processing 3,545 franchise filings (both new and renewals) in 2013. Many national franchisors are exempt from California registration due to filing with the Federal Trade Commission.
• Interference with Private Contracts. SB 1094 (Lara; D-Huntington Park/Long Beach) would have inappropriately interfered with the ability of successful health facilities operators to purchase or merge with struggling hospitals, increasing the risk and cost of financing for these transactions, by allowing the California Attorney General to retroactively amend the terms of the transfer agreement for up to five years rather than resorting to traditional remedies when she unilaterally determined that one of the parties has breached the contract or made material misrepresentations.
• Due Process for Agricultural Employers. SB 25 (Steinberg; D-Sacramento) would have denied due process for agricultural employers by requiring employer to implement collective bargaining contract ordered by the Agricultural Labor Relations Board while appealing the order, unless the employer meets a high standard to win a stay.
• Expands Costly Presumptions. AB 2616 (Skinner; D-Berkeley) would have increased workers’ compensation costs for public and private hospitals by presuming certain diseases and injuries are caused by the workplace.
• Creates Unworkable Permitting System for Hazardous Waste Facilities. SB 812 (de León; D-Los Angeles) would have fundamentally undermined the Department of Toxic Substances Control’s recently proposed plan to issue protective and timely hazardous waste permits by creating extraordinarily aggressive and arbitrary permit processing timelines.