Thursday, November 9, 2023

U.S. Chamber Releases White Paper on "Whole of Government" Union Support The U.S. Chamber of Commerce released a white paper detailing the various elements of the Biden/Harris administration's advocacy for unions. The report examines how President Biden's "whole of government" approach to using the federal government to promote unionization harms workers, employers, and the economy. Read the full report here.
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Newsom Requires Diversity Reporting, But Not For Himself

Coming soon to California: a diversity reporting mandate for venture capital firms. Not coming soon to California: a diversity reporting mandate for Gov. Gavin Newsom.

As the bill signing period wrapped up earlier this month, Newsom approved a measure that will force venture capital firms operating in California to collect and disclose demographic data about the founders of the companies they invest in — while on the very same day, he vetoed for the third time a similar transparency requirement for his own gubernatorial appointments.

Senate Bill 54 by state Sen. Nancy Skinner, a Berkeley Democrat, was among nearly 900 measures that Newsom signed into law this year. It represents an effort to boost lagging venture capital investments in businesses founded by women, Latino and Black entrepreneurs.

Under the law, venture capital firms must annually survey the founding teams of the companies they invested in during the year for information such as gender identity, race, ethnicity and disability status, as well as whether they are LGBTQ+, military veterans or California residents. Aggregated data, along with how much money was invested in those businesses, will be reported to the state starting March 1, 2025.

The National Venture Capital Association opposed the bill, arguing it would “produce misleading and counterproductive data that would hurt the cause of diversity” because founders from diverse backgrounds would be more likely to participate in the voluntary surveys, exaggerating their representation in startup investments.

Newsom identified his own issues with “problematic provisions,” “unrealistic timelines” and the cost to the state of administering the program — some of which he promised to address in cleanup language in the next budget — but ultimately signed the measure.

·        Newsom, in his signing statement: “This bill resonates deeply with my commitment to advance equity and provide for greater economic empowerment of historically underrepresented communities.”

The governor looked less favorably on SB 702 by Sen. Monique Limón, a Santa Barbara Democrat who has spent the past three years trying to pass a law documenting the diversity of gubernatorial appointments. Newsom again rejected her latest effort, which would have required the governor’s office, starting in 2026, to annually publish aggregate demographic information of appointees to state boards and commissions in the previous year, including their ethnicity, gender, disability status, region, party affiliation and veteran status.

In his veto message, Newsom noted that the data would be voluntarily self-reported and argued that it would therefore “not necessarily accurately reflect the diversity of appointees.” Limón expressed frustration in a statement to CalMatters that her proposal was in line with the goals and data collection methods of the venture capital firm reporting mandate that Newsom signed.

·        Limón: “We believe that this Administration has taken strides to diversify our statewide appointees, but more needs to be done to ensure we have mechanisms in place long after this Administration is gone.” 

The governor’s office did not respond to repeated questions from CalMatters about why Newsom supported a diversity reporting requirement for venture capital firms but not for himself, why he signed that bill in spite of the concerns he identified, and why he thought that self-reported data was only a problem for the gubernatorial appointments proposal.

·        Newsom spokesperson Omar Rodriguez, in an email: “Thanks for reaching out. The messages for SB 54 and SB 702 speak for themselves here. Will let you know if we have anything further to add.”

This story first appeared in CalMatters and is reprinted with permission.

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Labor-Backed Coalition Springs Up to Fight PG&E On Rates A new labor-backed coalition led by one of Pacific Gas and Electric’s most raucous critics is fighting the powerful utility (and its primary union) over its customers’ rising bills. The group, called FAIR California, officially launched its first action, protesting PG&E’s request for a 26 percent rate hike, scheduled for a vote at the Public Utilities Commission. It’s led by Sam Liccardo, the former San Jose mayor who once advocated for transferring ownership of PG&E to its customers from investors. Among the coalition’s members is the California Alliance for Jobs, which represents the Northern California District Council of Laborers, the Northern California Carpenters Regional Council, and the International Union of Operating Engineers Local 3. The group also includes the AARP, the Housing Action Coalition, the Latino Business Foundation in Silicon Valley and local chambers of commerce. A key piece of PG&E’s rate hike request is its plan to spend $5.9 billion to bury 2,000 miles of electrical distribution lines to try to reduce wildfire risks. The utility’s lines have sparked major, deadly wildfires in recent years, contributing to its second bankruptcy filing in 2019.

An op-ed Liccardo published Monday in McClatchy’s California newspapers gives a flavor of his style. He accused PG&E of prioritizing its shareholders over ratepayers with excessive spending on TV ads, executive pay and lobbying, saying “PG&E executives continue to fiddle while California burns.”

Hunter Stern, an assistant business manager with IBEW 1245, which represents PG&E electrical workers, said the union was discouraging others from joining the group.

“We are aware they are recruiting people and asking for money. 1245 is urging any labor organization to think twice about joining an organization run by an individual with his past,” said Stern, referencing Liccardo.

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NLRB Issues Joint Employer Final Rule

Last month, the Board issued its Final Rule addressing the Standard for Determining Joint-Employer (JE) Status under the National Labor Relations Act (NLRA). The 229-page rule restores the deeply flawed standard first announced during the Obama administration in its 2015 Browning-Ferris (BFI) decision and expands potential liability for employers. During the Trump administration, the NLRB reversed the BFI standard via a final rule, requiring a putative joint employer to “possess and exercise…substantial direct and immediate control” over essential terms and conditions of employment to determine that status. Today’s action rescinds the Trump board’s rule and “makes extreme and troubling changes to Board law,” as Member Marvin Kaplan states in his dissent.

Under the new JE standard, an entity may be considered a joint employer of a group of employees if each entity has an employment relationship with the employees and they share or codetermine one or more of the employees’ essential terms and conditions of employment, which are defined exclusively as: (1) wages, benefits, and other compensation; (2) hours of work and scheduling; (3) the assignment of duties to be performed; (4) the supervision of the performance of duties; (5) work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline; (6) the tenure of employment, including hiring and discharge; and (7) working conditions related to the safety and health of employees.

In contrast to the 2020 final rule, the 2023 rule considers the alleged joint employers’ authority to control essential terms and conditions of employment, whether or not such control is exercised (i.e., potential control), and without regard to whether any such exercise of control is direct or indirect. Notably, the rule makes either unexercised or indirect control independently sufficient to determine joint employer status, which goes beyond the BFI standard. The new JE rule further eliminates the second step of BFI’s joint-employer standard, which required proof that a putative joint employer “possesses sufficient control over employees’ essential terms and conditions of employment to permit meaningful collective bargaining.” The ultimate effect of the rule announced today will make it far easier for the NLRB to declare that joint employment status exists in commonplace business relationships.

The NLRB issued a fact sheet on the new JE rule, which is available here.

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Utah Union Participation Utah has one of the lowest union participation rates in the country—3.9 percent in 2022, according to the U.S. Bureau of Labor Statistics (BLS). Beyond Utah, despite union favorability on the rise, the unionization rate hit a record low of 10.1 percent in 2022, down from 20.1 percent in 1983, the first year the BLS collected data. For union advocates, reversing that trend could be a long process. Story

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Elections Matter Politico writes, “Weeks of chaos in the House seem to have taken a toll on Rep. David Valadao’s reelection chances. Cook Political Report, the nonpartisan forecaster led by Dave Wasserman, changed its rating for CA-22 recently, moving it from a leans-Republican district to a toss-up. ‘Valadao’s votes for Jordan and Johnson for speaker in a Biden +13 district are a sign he’s still looking over his right shoulder after last year’s close call.’ Valadao barely made it out of the primaries last year, nearly losing to pro-Trump veteran Chris Mathys, who is running again. He then squeezed out a narrow victory over Democrat Rudy Salas, who is also running again in hopes of a rematch.”

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New California Employment Laws Have Arrived Earlier this month, Gov. Gavin Newsom signed 890 bills from the 2023 legislative session. Several of these bills are employment-related and have far-reaching implications for employers (and their HR teams tasked with administering changes). The story includes many of the critical employment-related laws enacted in this session. These laws become effective January 1, 2024, but employers should review their policies and practices now to be sure they are prepared to address these changes. Story and Story

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EEO-1 Filing Period Now Open; Reports Due by December 5, 2023 After multiple delays, on October 31, 2023, the Equal Employment Opportunity Commission (EEOC) announced the opening of the 2022 EEO-1 data collection portal. All employers with 100 or more employees, federal government contractors and subcontractors with at least 50 employees, and a federal government contract of $50,000 or more must file their EEO-1 reports by December 5, 2023. The EEOC “strongly encourages eligible filers to begin the filing process as soon as possible.” Story

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California’s Next US Senator Could Be from … Maryland For more than a decade, California Senate hopeful Rep. Adam Schiff has claimed his primary residence is a 3,420 square-foot home he owns in Maryland, according to a CNN review of mortgage records. At the same time, Schiff has for years taken a homeowner’s tax exemption on a much smaller 650-square-foot condo he owns in Burbank, California, also claiming that home as his primary residence for a $7,000 reduction off the one percent property tax, amounting to a roughly $70 in annual savings. He did not take an exemption on his home in Maryland. Schiff, his wife, and two teenage children must be minimalists – living together in 650 square feet. But this would be consistent – Sen. Laphonza Butler, who was appointed to the open seat left vacant by Dianne Feinstein after her death – also lives in Maryland. How does that old saying go? My butt may live in Maryland, but my heart resides in California. Story

Speaking of which, Schiff and opponent Katie Porter (who lives in a UC subsidized home in Irvine) are in nearly a dead heat in California’s U.S. Senate race, well-positioned to move ahead to a runoff, a new poll shows. The two well-funded House Democrats have been pacing the field since the beginning of the year. Other candidates, including fellow Democratic Rep. Barbara Lee and Republican former baseball star Steve Garvey, have so far not shown an ability to make the race more broadly competitive. Story

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AZ Gov. Edits Tax Rebate Letters After Legal Threat Bob Bartlett’s favorite governor, Katie Hobbs, conceded to remove the website from future letters that go out to Arizonans who are eligible for an up to $750 tax rebate created in this year's state budget. Her spokesperson maintained they complied with the law, who aimed at GOP lawmakers' priorities. Story

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Leave for you, and you…Not to be “outdone” by candidate Schiff’s bill to give striking workers taxpayer subsidies for refusing to work, California Rep. Barbara Lee introduced a bill to give workers smoke leave during wildfires! A bill introduced in Congress by Lee, D-Oakland, would require employers to protect employees from the bad air caused by wildfires. This includes providing up to 12 weeks of unpaid annual leave — and sometimes paid leave — during periods of heavy smoke to those whose health is seriously threatened. Story

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13 Candidates Running for Retiring Rep. Debbie Lesko's AZ House Seat After watching the former House Speaker Kevin McCarthy walk over to Rep. Matt Gaetz on the House floor and “basically beg” for the votes to become speaker in January 2023 — after 15 rounds of voting — Greg Whitten knew he had to do something. The 39-year-old former Pentagon staffer and Arizona native said he decided to join the race for Arizona’s 8th Congressional District as a Democrat to defend democracy and reinstate normalcy to Congress. He said he was sick of the MAGA wing of the Republican Party and the ineffective governance by his representatives. Story

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New Form I-9 Required as of November 1, 2023 The new Form I-9—titled Employment Eligibility Verification and released on August 1, 2023—must be used for all new hires, effective November 1, 2023. The grace period—during which an employer could use the new Form I-9 or the Form I-9 (10/21/2019 version)—ended October 31, 2023. Story

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Large Contractors Union Shops Better at Anti-Harassment Training? Like most of you, I get the Construction “Daily Dive” email, whose motto is “We print any shit that hits our inbox.” Well, I may have put words in their mouth. I was intrigued by this recent story that noted, “There was also a large disparity between union and non-union shops: contractors that hire union workers are more than twice as likely (85 percent) to have anti-harassment training than those that hire non-union workers exclusively (42 percent).” That almost sounded like it came directly from union talking points. Well, it probably won’t surprise any of you that the report was “Produced in partnership with CPWR, The Center for Construction Research and Training.” And who do you suppose sponsors CPWR? NABTU.

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Big Changes Are Coming To Small Prop 65 Warnings Changes to the popular “short-form” warning option for businesses complying with California’s Proposition 65 are on the horizon and will likely make that warning longer and more difficult to use. Other important changes are on the way, too. Proposition 65 requires businesses to provide “clear and reasonable” warnings before knowingly and intentionally exposing California consumers to one of over 900 chemicals listed as “known to the State” to cause cancer or reproductive harm. In 2018, CalEPA’s Office of Environmental Health Hazard Assessment (OEHHA), which implements the law, enacted changes to its safe harbor regulations, making the standard safe harbor warning language longer and more specific but also introducing a “short-form” warning option with less language and a broad scope: it covered all exposures. It did not require users to specify a listed chemical. Story

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SB 553 Guidance The California Chamber held a webinar earlier this month with guidance for employers on SB 553 (Cortese), which passed this year and will create a range of new obligations for employers around workplace violence. The Chamber legal team prepared it, and it should benefit those trying to get their head around SB 553 as we head into 2024. For attorneys out there, it also provides some MCLE credit! It can be found here.