(April 28, 2004) The last of three California Chamber-sponsored bill to modify the “sue your boss” law (SB 796) goes before a Senate committee today. The other two failed to pass an Assembly committee earlier this month.
SB 1861 (Ashburn; R-Bakersfield) will be heard by the Senate Labor and Industrial Relations Committee this morning.
Contact committee members to support the bill
Although the new Sue Your Boss law went into effect just four months ago, a number of California companies are finding themselves under attack. Lawsuits using the new law have been filed against major motion picture studios, biotech companies, office supply stores and more. In several instances, one law firm is using the same plaintiff to file identical lawsuits against multiple companies.
The new law being used in these lawsuits, SB 796 (Dunn; D-Garden Grove) (Chapter 906, statutes of 2003) allows bounty-hunting private attorneys to sue employers for wage-and-hour Labor Code violations, thus providing a new lucrative incentive for workers and their private attorneys to file meritless lawsuits against employers. The private attorneys can keep a portion of the assessed fines and penalties.
The Chamber supports SB 1861 because it provides a review mechanism that helps check frivolous lawsuits by requiring state Labor Agency review of alleged Labor Code violations before a private enforcement lawsuit may be filed.
”California companies are now at high risk for 'shakedown lawsuits' because SB 796 permits employees and former employees to bring private enforcement lawsuits for alleged Labor Code violations without ever informing state labor law enforcement officials or the employer of the alleged violation,” said Julianne Broyles, Chamber director of employee relations and small business. “SB 1861 provides the necessary review of alleged violations in order to protect California businesses from fraudulent claims filed by unscrupulous attorneys.'
Until SB 796 went into effect, labor law enforcement was the sole responsibility of the Labor and Workforce Development Agency. SB 796’s proponents showed no evidence that the agency or any of its divisions, such as the Labor Commissioner or Cal/OSHA, were not properly enforcing the law. SB 796 leaves employers vulnerable to a wide array of new civil lawsuits, and provides new incentives for unfair competition lawsuits.
The Chamber has sponsored other bills to modify or eliminate SB 796. Unfortunately, both were voted down in the Assembly Labor and Employment Committee. Those bills were:
AB 2181 (Campbell; R-Irvine), which would have repealed SB 796.
AB 2650 (Bates; R- Laguna Niguel), which exempted businesses with fewer than 100 employees from SB 796, providing that only state labor enforcement officials may investigate, cite or prosecute to enforce California Labor Code violations for smaller employers.
Action Needed
The Chamber is urging employers to contact committee members to voice support of SB 1861.
To obtain letters of support, or to get Senate Labor and Industrial Relations Committee member information, please visit our website at: www.calchamber.com.
Staff Contact: Julianne Broyles