Governor Completes Action on Major Bills

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Governor Gavin Newsom laid down his lawmaking pen the night of October 13 after signing 890 new laws into effect, and vetoing another 156, including three California Chamber of Commerce job killer bills.

The CalChamber tracked more than 700 bills this year, formally opposing more than 100. Most of the legislation the CalChamber opposed was either stopped or amended to address concerns.

Of 19 job killer bills identified this year, the Legislature sent seven to the Governor, who signed four of those bills into law. At the urging of the CalChamber, the Governor rejected three job killer bills.

In one of labor’s major defeats of the year, the CalChamber led a large coalition to secure a veto of SB 799 (Portantino; D-Burbank), which would have provided unemployment compensation to striking workers. (See October 6 Alert.)

The Governor also vetoed several other onerous labor-supported bills, including SB 627 (Smallwood-Cuevas; D-Los Angeles), setting a stringent recall process for certain employers to return former employees to the workforce; AB 1356 (Haney; D-San Francisco), a WARN Act expansion; and SB 725 (Smallwood-Cuevas; D-Los Angeles), requiring grocery stores to pay mandatory severance.

He also vetoed a plaintiff attorney-sponsored bill, AB 524 (Wicks; D-Oakland), which would have subjected employers, especially small employers, to litigation.

Job Killer Bills

The Governor signed the following job killer bills:

AB 647 (Holden; D-Pasadena) Grocery Workers. Significantly expands statute related to successor grocery employers, including disrupting the ability for independent small stores to join together and creating a significant new private right of action.

SB 365 (Wiener: D-San Francisco) Undermines Arbitration. Discriminates against use of arbitration agreements by allowing trial courts to continue trial proceedings during any appeal regarding the denial of a motion to compel.

SB 616 (Gonzalez; D-Long Beach) Costly Sick Leave Expansion on All Employers. Imposes new costs and leave requirements on employers of all sizes, which is in addition to all other enacted leave mandates that small employers throughout the state are already struggling with to implement and comply.

SBX1 2 (Skinner; D-Berkeley) Windfall Profits Tax. Sets an arbitrary cap on the amount of profit that a refiner operating in the state of California can earn over a quarterly basis. This measure would further diminish supply, discourages operational efficiencies, and would limit the amount of capital a refiner could reinvest into their infrastructure to support California’s long-term climate goals.

The Governor vetoed the following job killer bills:

AB 524 (Wicks; D-Oakland) Expansion of Litigation Under FEHA. 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 provides direct care of any person of their choosing, and creates a de facto accommodation requirement that will burden small businesses.

SB 627 (Smallwood-Cuevas; D-Los Angeles) Onerous Return to Work Mandate. 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.

SB 799 (Portantino; D-Burbank) Increased Unemployment Insurance Taxes to Subsidize Striking Workers. SB 799 will allow striking workers to claim UI benefits when they choose to strike. Because the UI Fund is paid for entirely by employers, SB 799 will effectively add more debt onto California employers. Moreover, SB 799 will effectively force employers to subsidize strikes at completely unrelated businesses because the UI Fund’s debt adds taxes for all employers, regardless of whether they’ve had a strike.

Many CalChamber-supported bills were signed.

Also worth noting are the water-related CalChamber-opposed bills that were stopped this year, but may be brought up again in 2024. The bills dealt with groundwater, water rights and the Delta Conveyance Project.

For a full list of the CalChamber priority bills that were stopped, amended to address business concerns, or signed into law, see the the Final Status Report in this Alert.