(June 18, 2004) The California Chamber’s continuing plea for legislators to give employers relief from the “sue your boss” law remained unheeded this week as an Assembly committee approved a bogus fix instead.

SB 1809 (Dunn; D-Garden Grove) claims to address litigation issues raised by the “sue your boss” law enacted last year, SB 796 (Dunn; D-Garden Grove; Chapter 906).

In reality, SB 1809 does nothing to lessen the opportunities made possible by SB 796 for bounty hunting private attorneys to sue all public and private sector employers.

'The best solution would be to repeal SB 796 because thousands of Labor Code sections remain available for use by any current or former private or public sector employee seeking the huge, lucrative bounty hunter awards available under SB 796,' said Julianne Broyles, Chamber director of employee relations and small business. 'Repeal of SB 796 will stop bounty-hunting attorneys from inflicting further costs on California businesses as the state’s economy begins to recover.'

SB 796, which went into effect at the beginning of the year, permits current and former employees to file lawsuits against a business for alleged Labor Code violations and keep a portion of any fines and penalties assessed. The Chamber labeled the bill a “job killer.”

Until SB 796 was enacted, labor law enforcement was the sole responsibility of the state Labor and Workforce Development Agency. The author and supporters of SB 796 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.

Missing Provisions

The Chamber and the coalition of business and employer groups opposing SB 1809 cited many provisions the bill fails to include, but should if it were meant to provide true relief from the 'sue your boss' law:

• eliminate the bounty hunter provisions of SB 796.
• require that the current or former employee suffer any actual harm prior to filing a lawsuit.
• eliminate the one-sided provision for attorney’s fees to the employee only.
• prevent the employee from attaching other causes of action for the same violation, such as claims under Business and Professions Code Section 17200.
• eliminate SB 796’s outrageous per-worker-per-pay-period fine scheme.
• provide retroactive relief to those employers who have already been subjected to costly and wasteful litigation under SB 796.

Bogus Solution

The Chamber and other opponents of SB 1809 pointed out that the bill as written today fails to solve the problem of the meritless lawsuits and huge fines permitted by the 'sue you boss' law.

Amendments the author made to the bill earlier provide only for very limited instances where a court would be permitted to adjust the enormous civil fines imposed by SB 796 due to the many findings a court would have to make to justify a reduction.

The carefully worded amendment exempting posting and notice fines from SB 796 actions is a superficial improvement, because the provision does no more than direct the payment of the fine solely to the state Labor Agency, instead of the plaintiff, while attorneys would still collect fees and costs. The amendment does not bar the ability to bring an SB 796 enforcement lawsuit or prevent the attorney from collecting fees and costs.

Lawsuits Proliferate

Plaintiffs and their attorneys already are using SB 796 lawsuits to try to quickly pressure employers into settlement agreements before a case goes before a court.

The Chamber’s review of just a few of the lawsuits filed so far shows the potential added cost of doing business in California due to SB 796 lawsuits exceeds $336 million for just nine companies.

Attorneys are placing on the Internet “how-to” guides for filing an SB 796 lawsuit. The “Frequently Asked Questions” section of one such guide, titled “California’s Sue Your Boss Law,” includes the following question and answer:

“It looks like the Act is mainly a windfall for attorneys who find ways to sue businesses. Is this true?

“Bingo! The persons who will mainly benefit from the Act are not the ‘aggrieved employees,’ but the attorneys.”

Key Vote

The Assembly Labor and Employment Committee passed SB 1809 on a vote of 6-2:

Ayes: Koretz (D-West Hollywood); Mullin (D-South San Francisco); Chan (D-Oakland); Chu (D-Monterey Park); Laird (D-Santa Cruz); Leno (D-San Francisco).

Noes: S. Horton (R-Chula Vista); Campbell (R-Irvine).