Legislators Keep Moving "Job Killer" Proposals

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Policy committees in both houses of the Legislature have been approving California Chamber of Commerce-opposed "job killer" proposals in recent weeks while rejecting job creator bills, according to the May 11th California Camber of Commerce Alert newsletter. Just last week, the Senate Judiciary Committee approved legislation inflating litigation and insurance costs, SB 1528 (Steinberg; D-Sacramento), not long after rejecting a bill to protect employers from inappropriate litigation, job creator SB 1374 (Harman; R-Huntington Beach). Other "job killers" have been sent to the suspense files of the Assembly or Senate Appropriations committees pending a review of their fiscal impact. The CalChamber will be urging legislators to keep those "job killers" on the suspense file to prevent the damage they would do to California’s still-struggling economy.

In light of the state Controller’s report this week that state tax receipts were 20 percent below projections in April, an improving economy remains a critical piece of any solution to California’s budget woes.
The Governor’s updated budget plan is expected to be released on May 14.

Senate Judiciary Action

SB 1528 proposes to establish a new framework for calculating damages in personal injury actions, allowing an injured party to recover expenses never actually incurred. While the details of the framework have yet to be filled in by the author, the CalChamber opposes any attempt to change how medical damages are calculated that conflicts with the California Supreme Court decision in Howell v. Hamilton Meats & Provisions, Inc., which is the stated goal of the bill sponsor.

Compensatory damages in personal injury cases serve to make a plaintiff whole, or to compensate him/her for losses actually incurred. When the loss at issue is the cost of medical care received by the plaintiff, it is well settled under California law that a plaintiff may recover "no more than the amounts paid by the plaintiff or his or her insurer for the medical services received or still owing at the time of the trial" (Howell v. Hamilton Meats).

The bill seeks to upend traditional compensatory damages, allowing plaintiffs and their attorneys to use the higher billable amount—which in some cases can be many times higher than the amount actually paid. These higher damages will artificially inflate both the amount of damages in the case and the "settlement value." Many times, cases are "worth" three times the amount of compensatory damages.

By allowing injured plaintiffs to recover more than the medical costs they’ve actually paid, SB 1528 will result in an unfair windfall to plaintiffs, inflate litigation costs, encourage the filing of more lawsuits, and dramatically increase rates for automobile, workers’ compensation and general liability insurance, harming individuals and employers alike.

This bill also will impose significantly higher costs for employers and consumers already struggling in a weak economy.

Key Vote
Senate Judiciary approved SB 1528 on May 8 by a vote of 3-2:

Ayes: Corbett (D-San Leandro), Evans (D-Santa Rosa), Leno (D-San Francisco).

Noes: Blakeslee (R-San Luis Obispo), Harman (R-Huntington Beach).

Assembly Judiciary Action

"Job killer" bills that expand discrimination litigation and allow inappropriate wage liens have moved from the Assembly Judiciary Committee.

AB 1999 (Brownley; D-Santa Monica) makes it virtually impossible for employers to manage their employees and exposes them to a higher risk of litigation by expanding the Fair Employment and Housing Act (FEHA) to include a protected classification for any person who is, who will be, or who is perceived as a family caregiver. Extending employment protections to individuals simply on the basis that they provide "medical" care for a family member or "supervise" the care a family member receives, will burden employers and subject them to costly litigation.

There were approximately 19,500 discrimination claims filed in 2010 with the state Department of Fair Employment and Housing under FEHA, which was 1,000 complaints more than in 2009.

Adding this new expansive classification to FEHA will only cause such cases to increase dramatically, placing California employers at a significant disadvantage.

AB 2517 (Eng (D-Monterey Park) creates a dangerous and unfair precedent in the wage and hour arena by allowing employees in the car washing industry to file liens on an employer’s real property or any property where work was performed, based on an alleged but unproven wage claim.

California has some of the most onerous wage and hour laws in the country. Even the Labor Commissioner, charged with interpreting and enforcing wage and hour laws, disagrees with courts regarding the proper application of California law in this area.

Nevertheless, AB 2517 would allow any employee, employee representative, or the Labor Commissioner to file a lien against an employer’s real property or personal property simply on the basis that the employee believes he/she has a valid wage claim against the employer.

At the time of filing the lien, the employee would have no burden to provide any actual evidence that the employer violated any wage and hour law. Rather, all the employee would have to do is simply provide: (1) a demand statement of the alleged amount owed; (2) employer’s name; (3) description of the property; and (4) the employee’s address.

This lien could be applied for single employee wage claims that amount to several hundred dollars in damages and/or class action and representative wage claims that allege millions of dollars in damages.

Employees should not be allowed to interfere with an employer’s business or property, or someone else’s real property where work was performed, through filing a lien of such significance without first proving the merit of their allegations. To allow otherwise will basically subject employers to constant extortion in order to avoid dealing with a lien on their property.

Key Votes
Both AB 1999 and AB 2517 passed Assembly Judiciary on April 24 by votes of 6-3.

Ayes: Alejo (D-Salinas), Atkins (D-South Park/Golden Hill), Dickinson (D-Sacramento), Feuer (D-Los Angeles), Monning (D-Carmel), Wieckowski (D-Fremont).

Noes: Gorell (R-Camarillo), Jones (R-Santee), Wagner (R-Irvine).

Absent/abstaining/not voting: Huber (D-El Dorado Hills).