Wednesday, February 1, 2023

Lawsuit-Encouraging Bill on Governor’s Desk

Legislation making it easier for plaintiffs’ lawyers to file pay equity lawsuits passed the Legislature last week and now awaits action by the Governor.

AB 1209 (Gonzalez Fletcher; D-San Diego) seeks to publicly shame employers for wage disparities that do not violate the law. Throughout the legislative session, it has been opposed as a job killer by the California Chamber of Commerce and a coalition of employer associations and local chambers of commerce.

Current Law

In 2015, the CalChamber and California Legislative Women’s Caucus celebrated compromise legislation that modernized the state’s equal pay law and was touted as the strongest such law in the nation.

The current law makes plain that the standard for equal wages is “substantially similar work,” not just the job title or description. It also carefully allocates the litigation burdens between the employee and employer.

Ideally, an employee must prove he/she is performing substantially similar work and is receiving unequal wages. The burden then shifts to the employer to establish a legitimate factor—such as education, experience, seniority, merit or geography—for the wage disparity.

An employer that cannot show a legitimate reason for the wage gap has violated the law.

AB 1209

AB 1209 requires many private employers and nonprofits to collect data on salaries of all well-paid white collar employees. The statistics for each job title or classification must be analyzed and recategorized according to whether the job duties are substantially similar. Businesses would deliver the data to the Secretary of State to be posted on a publicly accessible website.

Legitimate reasons for pay differentials would not be highlighted in the database.

Smokescreen

As pointed out in a recent opinion piece, “By using the smokescreen of transparency, the bill author and her plaintiffs’ attorneys allies aim to unravel the carefully structured compromise. In effect, the legislation would require employers to serve up reams of data that attorneys need to establish a case. What a gift!”

(“Why blow up a good deal on equal pay?” by CalChamber Policy Advocate Jennifer Barrera and Kara Bush, director of state government affairs for the Computing Technology Industry Association, appeared in The Sacramento Bee on August 30.)

Plaintiffs’ Attorneys React

Just two days after the Assembly gave final approval to AB 1209, the Sacramento Business Journal (paywall) reported that plaintiffs’ attorneys were anticipating new business:

But at least one member of the California Employment Lawyers Association has said he will proactively use the database to pursue wage disparity cases.

“By posting this on the Secretary of State’s website, the government is basically giving us (plaintiff lawyers) the data we need to go in there and hammer companies,” said Galen T. Shimoda, attorney owner at Shimoda Law Corp.

Although the wage data cannot form the sole basis of a lawsuit, he believes the database will help set him “on the right track.” And while the purpose of the bill is not to spark litigation against large companies, Shimoda believes the government understands that litigation is a part of the corrective force needed to address wage disparity.

“With AB 1209 providing true statistics, it’s almost like the government is saying, ‘Here’s the basis, litigators—go for it, start filing,’” he said.

Action Needed

The CalChamber is urging members to contact the Governor and ask him to veto AB 1209.

Staff Contact: Jennifer Barrera

Jennifer Barrera
Jennifer Barrera
Jennifer Barrera took over as president and CEO of the California Chamber of Commerce on October 1, 2021. She has been part of the CalChamber team since 2010 and stepped into the top position after serving as CalChamber executive vice president, overseeing the development and implementation of policy and strategy for the organization, as well as representing the CalChamber on legal reform issues. Barrera is well-known for her success rate with the CalChamber’s annual list of job killer legislation, efforts to reform the Private Attorneys General Act (PAGA) and leadership working with employers on critical issues, including most recently those arising from the COVID-19 pandemic. In addition, she advises the business compliance activities of the CalChamber on interpreting changes in employment law. Barrera earned a B.A. in English from California State University, Bakersfield, and a J.D. with high honors from California Western School of Law. See full bio

Related Articles

New California Law Expands Pay Scale Disclosure, Pay Data Reporting

Legislation signed by Governor Gavin Newsom last week requires employers to make pay scales available to job applicants and employees and expands California’s pay data reporting requirements. Now that SB 1162 has been signed, employers...

New Article Shows Record Number of PAGA Filings During Pandemic

While most business operations seemed to slow down during the COVID-19 pandemic, new data shows that one industry did not: plaintiff’s firms filing lawsuits. Private Attorneys General Act (PAGA) filings were sky-high in 2020 and...

CalChamber-Led Coalition Fights Costly Prop. 65 Warning Change

Proposed changes to Proposition 65 warning rules just two years after they went into effect will invite new frivolous enforcement actions against businesses and force them to once again spend millions of dollars overhauling...