(July 22, 2004) California Chamber-opposed “job killer” legislation that increases unreasonable liability on employers in California will be heard by the Senate Appropriations Committee on August 2.

AB 2889 (Laird; D-Santa Cruz) negatively distinguishes California from the rest of the nation by increasing insurance costs, exposing employers to attorneys’ fees, settlements and judgments, raising costs of products and making California employers less competitive by making employers liable for the harassment of a worker by a person over whom the employer has no control, such as customers or clients.

The Chamber has labeled this bill a “job killer” because it would unreasonably leave California employers open to new legal and financial liability under yet another law that businesses in other states do not face.

“AB 2889 places undue liability on California employers, especially small businesses,” said Julianne Broyles, Chamber director of employee relations and small business. “It makes employers legally liable for situations and people completely out of their control.”

The bill holds public and private employers liable, under the provisions of the Fair Employment and Housing Act (FEHA), for the harassment of a worker by a third party, such as clients or customers. All employers with five or more workers will be held liable for the harassment of a worker by any person, even those over whom an employer has no managerial or disciplinary authority.

The FEHA currently limits employers’ general duty to prevent harassment specifically to employees and contract workers, except in instances of sexual harassment. AB 2889 would extend employer liability to all forms of harassment.

Another concern is that California general business insurance policies nearly always exclude coverage of acts of third parties. This means any lawsuits brought under AB 2889 make California employers solely financially liable for the acts of persons who are not their employees.

Action Needed
The Chamber is urging all employers to contact Senate Appropriations Committee members and urge a “no” vote on AB 2889.  Use our easy-to-edit position letter.

For more information on AB 2889 or to view the entire “job killer” list, please visit our website at www.calchamber.com.