Emergency legislation promises to revitalize the California economy and place our state in the forefront of jurisdictions promoting economic growth and employment opportunity.
The California’s Open for Business—Really!—Act (“COBRA”), AB 666, effective April 1, works the following reforms in California employment law.
PAGA repeal. Article I of COBRA repeals the Private Attorneys General Act of 2004. The legislative finding reports that PAGA, during its first ten years, did little more than enrich opportunistic plaintiffs’ counsel by creating collateral settlement leverage in wage and hour class actions.
Other wage and hour reform: Systematic Labor Code amendments advance a new general principle that pay practices that are lawful under federal law are also lawful in California, absent express statutory language stating a clear intent to deviate from the employment law followed in America generally. Under COBRA, judges no longer can invent special rules to burden California employers. The Legislature has thus restored California to the national fold with respect to a business’s use of piece rates, commission plans, temporary employment agencies, independent contractor relationships, and other traditional methods of securing services.
Litigation reform: Employees suing employers must now make a written monetary demand before they sue. Plaintiffs’ lawyers cannot recover attorney’s fees or costs unless the final outcome of the case is more favorable to the employee than the amount of the initial demand. And defendants filing summary judgment motions can now do so with 28 days’ notice (as is often the case in federal courts), rather than the excessive 75 days’ notice that California now requires.
Leave law reform: COBRA repeals California’s new mandatory paid sick leave act, and preempts municipal ordinances that require paid sick leave.
In his signing statement, Governor Jerry Brown praised the Legislature’s historic bipartisan accomplishment: “When we got to talking about this, everyone realized that we were tired of California being the laughing stock of the nation. No prudent business was even thinking about starting or expanding operations here with all the crazy labor laws we’ve created. They were just driving up costs and impairing efficiency while encouraging shake-down ‘gotcha’ lawsuits. Now we can truly welcome the businesses that create jobs for California families.”
Governor Brown continued: “We finally realized that our labor law has been prescriptive without being clear, mandatory without accounting for how working relationships vary, and onerous to employers while not producing significant benefits for workers. Enough already!”
By our source in Sacramento