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WECA Political Update June 23, 2022

Thursday, June 23, 2022

US Supreme Court Overrules Key Holding of Iskanian Regarding Arbitrability of PAGA Claims

Key Points

  • On June 15, 2022, in Viking River Cruises, Inc. v. Moriana, the U.S. Supreme Court held that the Federal Arbitration Act preempts a California state law rule holding that PAGA claims cannot be compelled to individual arbitration. Instead, PAGA permits private plaintiffs to sue their employers on behalf of the state of California and collect civil penalties for Labor Code violations committed against themselves and other aggrieved employees.
  • Explaining that PAGA allows aggregation of the named plaintiff’s claims and the claims of other employees, Viking River Cruises distinguished between the “individual” and “non-individual” claims brought in a PAGA action. Accordingly, it held that the “individual” claim might be compelled to arbitration but left in place the state law rule against forced arbitration of the “non-individual” claims.
  • The Court also held that under its reading of state law, the “non-individual” claims could not proceed in Court if the individual claims have been compelled to arbitration. Concurring opinions regarding the majority’s application of state law and the potential for legislative responses suggest that litigation over arbitration issues in PAGA cases may continue.
You can read the opinion here: 20-1573 Viking River Cruises, Inc. v. Moriana (06/15/2022)

And because the left-hand doesn’t know what the right decided…
CA Appellate Court Rejects Uber’s Arbitration Agreement for PAGA Claims
 A California appellate court has upheld the decision of a trial court to deny Uber’s petition to compel arbitration in a case involving the worker misclassification of a former Uber Eats driver. According to the Court, an agreement that the driver signed waiving the right to bring a claim under California’s Private Attorneys General Act (PAGA) is unenforceable since such claims belong to the state, not the individual. Story

Newly elected Assembly Member Isaac Bryan is the author of AB 2419 to invest 40 percent of IIJA funding to low-income, Indigenous, and rural communities and communities of color, and union construction unions, who, despite their prevailing wages, are, obviously, part of the disadvantaged and low-income communities by requiring that to receive IIJA funds, any project costing more than five million dollars must be carried out under a project labor agreement that includes provisions to encourage apprenticeship training and the hiring of disadvantaged workers. WECA was the lone opponent when it was approved in the Senate Environmental Quality Committee, chaired by Senator Stern (a co-author), who replied to WECA’s opposition by incorrectly saying (some might call it “fake news”), “The building trades only want prevailing wages and not a PLA."

SB 1020 Clean Energy, Jobs, and Affordability Act of 2022 State Senator John Laird is the author of a bill to establish interim targets for the statewide 100 percent clean energy policy and requires state agencies to accelerate their 100 percent clean energy goal by 15 years. It also establishes a California Affordable Decarbonization Authority as a nonprofit public benefit organization as a mechanism to help fund various electric utility-related programs and activities. It requires each state agency, except the State Water Resources Development System (State Water Project), to ensure that zero-carbon resources and eligible renewable energy resources supply 100 percent of electricity procured on its behalf by December 31, 2030, by either: installing zero-carbon resources or eligible renewable energy resources on state-owned or state-leased buildings to serve the state agency’s onsite load; or procuring zero-carbon resources or eligible renewable energy resources through the local publicly owned electric utility (POU) or load-serving entity (LSE) providing retail service to the state agency. But, but, but. Because the State Building and Construction Trades Council controls votes, it requires new procurement commitments made on behalf of a state agency by its LSE or POU after June 1, 2022, to be constructed with contractors using multicraft project labor agreements. The bill passed its muster in the Assembly Committee on Utilities and Energy chaired by Eduardo Garcia (who is very close with the trades). It passed party line with Chad Mayes (I) joining his demo colleagues. WECA was the lone opponent to the mandatory PLA language.

Because the war in Ukraine isn’t F’d up enough, now the lobbyists are involved (and not in the war zone) SCM Consulting Limited, an affiliate of the company that owns the steel plant in Mariupol, Ukraine, that became the site of a standoff between Russian and Ukrainian militaries in a battle for control of the strategic port city, has hired Qorvis on a $60,000-per-month contract (!) to provide public relations services, according to documents filed recently with the DOJ. Qorvis will highlight the “operations and humanitarian efforts” of the steel plant’s parent company, System Capital Management, which reportedly employs more than 200,000 people, and its owner, Rinat Akhmetov. Akhmetov, who the filings say has “held an important role in political parties in Ukraine,” is the country’s richest man. He told Ukrainian media that he planned to sue Russia for as much as $20 billion in damages to his steel plants. Qorvis will work to win the company-earned media coverage and “assist with securing media interviews and proactive media engagement regarding events and projects as requested by the client,” according to the filings. SCM’s Azovstal steel plant was one of Ukraine’s last holdouts in Mariupol, with hundreds of Ukrainian fighters who had been “holed up in the facility for weeks under an intense Russian assault” finally evacuating the plant earlier this month, The Washington Post reported, calling the showdown “a desperate symbol of Ukrainians’ will to fight and die for their land, a key factor in Ukraine’s military successes against Russia’s larger, more powerful army.”

Hardball Diplomacy (The best kind). People close to LA Mayor Eric Garcetti reportedly privately pressured Arizona Sen. Mark Kelly to support Garcetti’s ambassadorial nomination, according to a story in POLITICO. As part of the push, they left the strong impression that the Arizona Democrat could be cut off from donor networks should he refuse to back the beleaguered nominee to be U.S. ambassador to India. The outreach infuriated Kelly, who vented to associates that he felt like he was being strong-armed over his refusal to relent on Garcetti’s nomination, two of the people with direct knowledge said. Kelly, up for reelection this year, is a top Senate fundraiser and frequently draws from Southern California as part of his campaign’s national reach. One person familiar with the advocacy said they were surprised that allies in Garcetti’s orbit believed Kelly, a retired astronaut (and fighter pilot) who prides himself on his independent streak, could be swayed by appeals from significant donors and luminaries. The person added that they believed the appeals were part of a coordinated campaign involving several Garcetti supporters. “These kinds of tactics backfire,” a second person familiar with the effort told POLITICO. “It’s hard to believe Garcetti didn’t have knowledge or didn’t push for these donors to call.”

IRS Raises Standard Mileage Rate for July to December 2022 On June 9, 2022, the Internal Revenue Service issued Announcement 2022-13, increasing the optional standard mileage rate for the final six months of 2022 from 58.5 cents per mile to 62.5 cents per mile. The new rate will be effective for travel from July 1, 2022, through December 31, 2022. The old rate of 58.5 cents per mile will remain effective through June 30, 2022. Learn more

Arizona Chamber of Commerce & Industry inks agreement with Israeli counterpart Arizona’s business advocacy organization signed a deal with Israel’s leading business group to collaborate on areas of shared interest. The signing between the Arizona Chamber of Commerce & Industry and the Federation of Israeli Chambers of Commerce was part of an Arizona delegation to Israel last week led by Gov. Doug Ducey. Story

Inflation costs you… according to NBC’s Charlie Herman, an American household now has to pay an additional $460 monthly to buy the same things they did a year ago. So how many families have an extra McKinley lying around? (Yes, there is (was) a $500 bill).

November State Ballot Four ballot measures have already qualified, with another six awaiting confirmation they’ve secured enough signatures by the June 30 deadline. But a few high-profile issues have recently cropped up in the Legislature and could show up in November, along with a deal that could remove one proposition — if they clear both houses by the end of the month.

Abortion: Legislative leaders had said they were considering enshrining the right to an abortion before POLITICO published the early draft majority opinion by the Supreme Court striking down Roe v. Wade. (Yeah, right). But the revelation put that action into high gear, prompting Sen. Pro Tem Toni Atkins (D-San Diego) and Assembly Speaker Anthony Rendon (D-Lakewood) to introduce SCA 10, which would protect the right to abortion as well as contraception. An easy path to the ballot is anticipated, considering the Democratic supermajority in the Legislature and how swiftly SCA 10 cleared three Senate committees last week. On Monday, the bill cleared the Senate and now moves on to the Assembly.

Involuntary servitude: Another proposed state constitutional amendment is in play: ACA3, introduced last year by Sen. Sydney Kamlager (D-Los Angeles), would ban involuntary servitude in California. The bill cleared the Assembly months ago and proposed an amendment to prohibit slavery and involuntary servitude “except to punish crime.” Depending on how that is defined, it could increase pay for inmate labor. It now faces a two-thirds vote in the Senate. Kamlager is on the fast track to higher office. In 2010 Kamlager worked on the campaign to elect Holly Mitchell to the California State Assembly, becoming District Director after Mitchell's victory. In 2015 she won a seat on the Los Angeles Community College Board. After Sebastian Ridley-Thomas announced his resignation from the State Assembly on December 27, 2017, Kamlager entered the race to serve the remainder of his term. She won the April 3, 2018, special election to represent California's 54th State Assembly district. Then on November 10, 2020, Kamlager announced that she would be a candidate for the California State Senate to succeed her former boss Holly Mitchell, who was elected to the Los Angeles County Board of Supervisors. On March 2, 2021, Kamlager was elected to the California State Senate with a 67.67 percent vote. Then, she became a candidate to replace Karen Bass, following her mayoral bid, for California's 37th congressional district. Whew, four races in seven years.

Plastics: Voters are slated to decide on a November plastics proposition that would ban Styrofoam, place a fee on single-use plastics, and start the clock on making these products compostable and recyclable by 2030. But that measure could be replaced by a deal in the form of SB54 by Sen. Ben Allen (D-Santa Monica), which legislative leaders and environmental groups say doesn’t go far enough. Atkins, Rendon, and other opponents have described the timeline to negotiate the bill and get it passed and signed by the governor by June 30 as “impossibly short."

Dan Walters covered a couple of other measures we’ll see (maybe) in November:

With the scarcity of drama in statewide office campaigns, the November election’s major focus will be on ballot measures, topped by a high-dollar duel over who, if anyone, will control gambling on sports events.

Tribes that now dominate casino gambling in the state are divided over whether to pursue a tribal measure to limit sports wagering to their casinos, which has already qualified for the ballot or concentrate resources on defeating a rival measure proposed by a coalition of online gambling companies.

Tribes committed to an opposition strategy are already broadcasting and streaming ads aimed at the online betting measure, alleging that it will cause gambling addiction. The opposition coalition plans to place its online measure on the 2024 ballot if it can defeat the corporate proposal.

However, sports wagering is not the only issue facing voters. Others likely to make the ballot include two measures that would raise income taxes on high-income Californians, one for pandemic preparedness, and the other to subsidize electric vehicle purchases.

Lyft, a major rideshare corporation, primarily sponsors the latter. It has been criticized as a corporate effort to make taxpayers underwrite a state requirement that Lyft and other companies, such as Uber, electrify their fleets.

Other pending initiatives would guarantee state funding for arts and music in the schools, reduce single-use plastic packaging and impose new staffing requirements on dialysis clinics. Previous union-backed dialysis measures have failed.

A measure to raise the state’s minimum wage to $18 per hour, sponsored by wealthy Los Angeles investor Joe Sanberg, might make the ballot, but only if it meets the signature requirements by the June 30 deadline.

Finally, a referendum would overturn a state ban on flavored tobacco products— the latest example of corporate interests turning to the ballot to escape new regulations imposed by the Legislature.

The initiative and referendum processes were brought to California more than a century ago as a way for voters to assert their will over a Legislature then dominated by corporate interests. However, they have largely evolved — or devolved — into ways for corporate and other special interests to have their way, as this year’s crop of ballot measures proves anew.