Existing law requires a local government agency letting a public transit service contract out to bid to give a bidding preference for contractors and subcontractors who agree to retain for a specified period certain employees who were employed to perform essentially the same services by the previous contractor or subcontractor. Such a contractor or subcontractor is required to offer employment to those employees, except for reasonable and substantiated cause. Existing law requires a successor contractor or subcontractor that determines that fewer employees are needed than under the prior contract to retain qualified employees by seniority within the job classification. The existing contractor is required to provide prescribed information regarding employment under the existing service contract to the awarding authority, any entity that the awarding authority identifies as a bona fide bidder, and the successor contractor. Existing law authorizes an employee who was not offered employment or who has been discharged in violation of existing law, or his or her agent, to bring an action against the successor contractor or subcontractor in any superior court having jurisdiction over the successor contractor or subcontractor. Existing law authorizes an awarding authority to terminate a service contract under prescribed circumstances.

This bill would expand the application of these provisions to exclusive contracts for the collection and transportation of solid waste. The bill would require the information provided to a bona fide bidder to be made available in writing at least 30 days before bids for the service contract are due. The bill would establish certain provisions applicable only to service contracts for the collection and transportation of solid waste, including limits on the requirement to retain employees and specified requirements for notice and opportunity to cure in the context of civil action or termination. The bill would not apply to contracts awarded before January 1, 2017, or to contracts for which the bid process has been completed before January 1, 2017. By requiring local agencies to give a bidding preference under these provisions to those contractors and subcontractors for the collection and transportation of solid waste, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

Existing law requires a local government agency letting a public transit service contract out to bid to give a bidding preference for contractors and subcontractors who agree to retain for a specified period certain employees who were employed to perform essentially the same services by the previous contractor or subcontractor. Such a contractor or subcontractor is required to offer employment to those employees, except for reasonable and substantiated cause. Existing law requires a successor contractor or subcontractor that determines that fewer employees are needed than under the prior contract to retain qualified employees by seniority within the job classification. The existing contractor is required to provide prescribed information regarding employment under the existing service contract to the awarding authority, any entity that the awarding authority identifies as a bona fide bidder, and the successor contractor. Existing law authorizes an employee who was not offered employment or who has been discharged in violation of existing law, or his or her agent, to bring an action against the successor contractor or subcontractor in any superior court having jurisdiction over the successor contractor or subcontractor. Existing law authorizes an awarding authority to terminate a service contract under prescribed circumstances.

This bill would expand the application of these provisions to exclusive contracts for the collection and transportation of solid waste. The bill would require the information provided to a bona fide bidder to be made available in writing at least 30 days before bids for the service contract are due. The bill would establish certain provisions applicable only to service contracts for the collection and transportation of solid waste, including limits on the requirement to retain employees and specified requirements for notice and opportunity to cure in the context of civil action or termination. The bill would not apply to contracts awarded before January 1, 2017, or to contracts for which the bid process has been completed before January 1, 2017. By requiring local agencies to give a bidding preference under these provisions to those contractors and subcontractors for the collection and transportation of solid waste, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

Existing law requires a local government agency letting a public transit service contract out to bid to give a bidding preference for contractors and subcontractors who agree to retain for a specified period certain employees who were employed to perform essentially the same services by the previous contractor or subcontractor. Such a contractor or subcontractor is required to offer employment to those employees, except for reasonable and substantiated cause. Existing law requires a successor contractor or subcontractor that determines that fewer employees are needed than under the prior contract to retain qualified employees by seniority within the job classification. The existing contractor is required to provide prescribed information regarding employment under the existing service contract to the awarding authority, any entity that the awarding authority identifies as a bona fide bidder, and the successor contractor. Existing law authorizes an employee who was not offered employment or who has been discharged in violation of existing law, or his or her agent, to bring an action against the successor contractor or subcontractor in any superior court having jurisdiction over the successor contractor or subcontractor. Existing law authorizes an awarding authority to terminate a service contract under prescribed circumstances.

This bill would expand the application of these provisions to exclusive contracts for the collection and transportation of solid waste. The bill would require the information provided to a bona fide bidder to be made available in writing at least 30 days before bids for the service contract are due. The bill would establish certain provisions applicable only to service contracts for the collection and transportation of solid waste, including limits on the requirement to retain employees and specified requirements for notice and opportunity to cure in the context of civil action or termination. The bill would not apply to contracts awarded before January 1, 2017, or to contracts for which the bid process has been completed before January 1, 2017. By requiring local agencies to give a bidding preference under these provisions to those contractors and subcontractors for the collection and transportation of solid waste, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

Existing law requires a local government agency letting a public transit service contract out to bid to give a bidding preference for contractors and subcontractors who agree to retain for a specified period certain employees who were employed to perform essentially the same services by the previous contractor or subcontractor. Such a contractor or subcontractor is required to offer employment to those employees, except for reasonable and substantiated cause. Existing law requires a successor contractor or subcontractor that determines that fewer employees are needed than under the prior contract to retain qualified employees by seniority within the job classification. The existing contractor is required to provide prescribed information regarding employment under the existing service contract to the awarding authority, any entity that the awarding authority identifies as a bona fide bidder, and the successor contractor. Existing law authorizes an employee who was not offered employment or who has been discharged in violation of existing law, or his or her agent, to bring an action against the successor contractor or subcontractor in any superior court having jurisdiction over the successor contractor or subcontractor. Existing law authorizes an awarding authority to terminate a service contract under prescribed circumstances.

This bill would expand the application of these provisions to exclusive contracts for the collection and transportation of solid waste. The bill would require the information provided to a bona fide bidder to be made available in writing at least 30 days before bids for the service contract are due. The bill would establish certain provisions applicable only to service contracts for the collection and transportation of solid waste, including limits on the requirement to retain employees and specified requirements for notice and opportunity to cure in the context of civil action or termination. The bill would not apply to contracts awarded before January 1, 2017, or to contracts for which the bid process has been completed before January 1, 2017. By requiring local agencies to give a bidding preference under these provisions to those contractors and subcontractors for the collection and transportation of solid waste, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

Existing law requires a local government agency letting a public transit service contract out to bid to give a bidding preference for contractors and subcontractors who agree to retain for a specified period certain employees who were employed to perform essentially the same services by the previous contractor or subcontractor. Such a contractor or subcontractor must is required to offer employment to those employees, except for reasonable and substantiated cause. Existing law requires a successor contractor or subcontractor that determines that fewer employees are needed than under the prior contract to retain qualified employees by seniority within the job classification. The existing contractor must is required to provide prescribed information regarding employment under the existing service contract to the awarding authority, any entity that the awarding authority identifies as a bona fide bidder, and the successor contractor. Existing law authorizes an employee who was not offered employment or who has been discharged in violation of existing law, or his or her agent, to bring an action against the successor contractor or subcontractor in any superior court having jurisdiction over the successor contractor or subcontractor. Existing law authorizes an awarding authority to terminate a service contract under prescribed circumstances.

This bill would make expand the application of these provisions applicable to exclusive contracts for the collection and transportation of solid waste. The bill would require the information provided to a bona fide bidder to be made available in writing at least 30 days before bids for the service contract are due. The bill would establish certain provisions applicable only to service contracts for the collection and transportation of solid waste, including limits on the requirement to retain employees and specified requirements for notice and opportunity to cure in the context of civil action or termination. By requiring local agencies to give a bidding preference under these provisions to those contractors and subcontractors for the collection and transportation of solid waste, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

Existing law requires a local government agency letting a public transit service contract out to bid to give a bidding preference for contractors and subcontractors who agree to retain for a specified period certain employees who were employed to perform essentially the same services by the previous contractor or subcontractor. Such a contractor or subcontractor must offer employment to those employees, except for reasonable and substantiated cause. Existing law requires a successor contractor or subcontractor that determines that fewer employees are needed than under the prior contract to retain qualified employees by seniority within the job classification. The existing contractor must provide prescribed information regarding employment under the existing service contract to the awarding authority, any entity that the awarding authority identifies as a bona fide bidder, and the successor contractor.

This bill would add employees of solid waste collection and transportation contractors and subcontractors to those provisions. make these provisions applicable to contracts for the collection and transportation of solid waste. By requiring local agencies to give a bidding preference under these provisions to those contractors and subcontractors, subcontractors for the collection and transportation of solid waste, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

Existing law requires a local government agency letting a public transit service contract out to bid to give a bidding preference for contractors and subcontractors who agree to retain for a specified period certain employees who were employed to perform essentially the same services by the previous contractor or subcontractor. Such a contractor or subcontractor must offer employment to those employees, except for reasonable and substantiated cause. Existing law requires a successor contractor or subcontractor that determines that fewer employees are needed than under the prior contract to retain qualified employees by seniority within the job classification. The existing contractor must provide prescribed information regarding employment under the existing service contract to the awarding authority, any entity that the awarding authority identifies as a bona fide bidder, and the successor contractor.

This bill would add employees of solid waste collection and transportation contractors and subcontractors to those provisions. By requiring local agencies to give a bidding preference to those contractors and subcontractors, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1669

Author:(Roger Hernández)

As Amended Ver:June 27, 2016

Majority vote

Original Committee Reference: L. & E.

SUMMARY: Extends an existing bid preference for public transit contractors who agree to retain employees to also include contracts for the collection and transportation of solid waste, as specified.

The Senate amendments:

1. Provide that this bill shall not apply to contracts awarded before January 1, 2017, or to contracts for which the bid process has been completed before January 1, 2017.
2. Provide that this bill shall only apply to service contracts for the collection and transportation of solid waste when an awarding agency decides to let an exclusive solid waste collection and transportation contract out to bid.
3. Provide that this bill is not intended to determine whether or not a local agency should procure a service contract by inviting bids, extend an existing service contract, renegotiate its service contract with the prior contractor, or exercise any other right it possesses pursuant to specified existing law to determine aspects of solid waste handling that are of local concern.
4. Provide that this bill does not modify, limit, or abrogate in any manner any franchise, contract, license, or permit granted or extended by a city, county, or other local government agency before January 1, 2017.

EXISTING LAW:

1. Requires all bidders on public transit service contracts to advise the awarding authority whether they will retain the employees of the prior contractor/subcontractor.
2. Requires awarding authorities who put out a bid for public transit service to provide a 10% bidding preference to contractors and subcontractors who agree to retain the employees of the prior contractor/subcontractor for a period of at least 90 days.
3. Requires existing contractors to provide awarding authorities with specified employee information, which will assist bidding contractors/subcontractors in costing their bids.
4. Exempts contractors/subcontractors from retaining employees for "cause," as defined.
5. Authorizes the new contractor/subcontractor to pay alternate wages and provide alternate benefits from those of the prior contractor/subcontractor.
6. Authorizes the new contractor/subcontractor to retain fewer employees than the prior contractor, if necessary. In such a situation, the employees shall be retained by seniority within the given job classification.
7. Authorizes employees who have not been offered employment or who have been discharged in violation of the provisions of this bill to bring suit against the contractor/subcontractor in superior court.
8. Provides for remedy in the form of reinstatement, back pay, benefits and attorney's fees and costs.
9. Obliges an awarding authority, after public hearing, to terminate a contract substantially breached by a contractor/subcontractor.
10. Provides that such a terminated contractor/subcontractor is ineligible to bid or be awarded a contract/subcontract with the terminating awarding authority for between one and three years, to be determined by the awarding authority.
11. Also provides for employment retention protection for employees of janitorial and building maintenance contractors, as specified.

FISCAL EFFECT: According to the Senate Appropriations Committee, this bill could result in a General Fund state reimbursable mandate on local government, the magnitude of which is unknown, but potentially in the low hundreds of thousands of dollars annually.

COMMENTS: Existing law already establishes a 10% bidding preference for public transit service contractors and subcontractors who agree to retain employees of the previous contractor for a period of at least 90 days. That requirement was enacted by SB 158 (Alarcón), Chapter 103, Statues of 2003. This bill would extend those requirements to contractors and subcontractors who submit bids for contracts for the collection and transportation of solid waste.

This bill is sponsored by the California Teamsters Public Affairs Council. The sponsor states that this bill is intended to prevent keeping workers from being displaced when a city's contract for solid waste services changes companies. They argue that when cities and counties contract for services like solid waste disposal, they are often focused on the costs of the bids, the level of service provided, and the type of diversion offered. In many cases, the workers fall through the cracks when contracts change hands. The existing workforce, trained and experienced, is summarily laid off and replaced.

The sponsor contends that this bill rewards companies who retain existing solid waste service employees for 90 days after the new contract takes effect with a 10% bid preference. This allows the company an opportunity to decide whether to retain the employee, while giving the employee additional time to prepare for a possible layoff job.

Opponents argue that, while well-intentioned, the type of bid preference created by this bill is nonessential to the service being delivered. There are many other considerations for contracting with a waste hauler in order to provide maximum benefit, such as rates, ability to service a community, and the ability to meet state diversion requirements. Opponents argue that there are already significant limitations for what local governments can and cannot contract. This bill simply adds another unnecessary layer of bureaucratic red tape at the expense of scare taxpayer resources.

Analysis Prepared by: Ben Ebbink / L. & E. / (916) 319-2091 FN: 0004008

 THIRD READING  

Bill No: AB 1669

Author:

:

Vote:

SENATE LABOR & IND. REL. COMMITTEE: 4-1, 6/22/16

AYES: Mendoza, Jackson, Leno, Mitchell

NOES: Stone

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/11/16

AYES: Lara, Beall, Hill, McGuire, Mendoza

NOES: Bates, Nielsen

ASSEMBLY FLOOR: 52-26, 5/5/16 - See last page for vote

SUBJECT:

SOURCE: California Teamsters Public Affairs Council

DIGEST: This bill requires a 10 percent bid preference for bidders who agree to retain for a period of 90 days the employees of the prior contractor or subcontractor on local agency contracts for the collection and transportation of solid waste.

ANALYSIS:

Existing law:

1. Requires all bidders on public transit service contracts to advise the awarding authority whether or not they will retain the employees of the prior contractor/subcontractor.
2. Requires awarding authorities who put out a bid for public transit service to provide a 10 percent bidding preference to contractors and subcontractors who agree to retain the employees of the prior contractor/subcontractor for a period of at least 90 days.
3. Requires existing contractors to provide awarding authorities with specified employee information, including the number of employees performing services under the service contract and their wages, benefits and job classifications to assist contractors and subcontractors in costing their bids.
4. Exempts contractors/subcontractors from retaining employees for "cause," limited to the employee’s performance or conduct or failure to pass any required substance and alcohol test, physical examination, criminal background check required by law or any other lawful qualification.
5. Authorizes the new contractor/subcontractor to pay alternate wages and provide alternate benefits from those of the prior contractor/subcontractor.
6. Authorizes the new contractor/subcontractor to retain fewer employees than the prior contractor, if necessary. In such a situation, the employees shall be retained by seniority within the given job classification.
7. Authorizes employees who have not been offered employment or who have been discharged in violation of the provisions of this bill to bring suit against the contractor/subcontractor in superior court and provides for remedy in the form of reinstatement, back pay, benefits and attorney's fees and costs.
8. Obliges an awarding authority, after public hearing, to terminate a contract substantially breached by a contractor/subcontractor. Provides that such a terminated contractor/subcontractor is ineligible to bid or be awarded a contract/subcontract with the terminating awarding authority for between one and three years, to be determined by the awarding authority.
9. Provides similar employment retention provisions for employees of janitorial and building maintenance contractors, as specified.

This bill:

1. Extends the existing 10 percent bid preference (as specified above) to contracts for the collection and transportation of solid waste.
2. Provides a definition of “solid waste” found in the Public Resources Code.
3. Specifies that “subcontractor” includes any person who performs a portion of the contractor’s express obligations under a service contract but does not include a contractor’s vendors, suppliers, insurers, or other service providers.
4. Requires existing service contractors (for both public transit and solid waste contracts) to provide specified employee information – total number, wages, benefits – to bona fide bidders in writing at least 30 days before bids for the service contract are due.
5. Specifies that the following applies to service contracts for the collection and transportation of solid waste:
   1. A successor contractor/subcontractor is required to retain only employees whose employment would be terminated with the contract changes.
   2. A successor contractor/subcontractor is not required to retain an employee under a prior service contract under any of the following circumstances:
      1. If the employee does not meet any standard hiring qualification lawfully required by the successor contractor or subcontractor for the position.
      2. If the successor would be required to terminate or reassign an existing employee covered under a collective bargaining agreement in order to hire the employee of the prior contractor/subcontractor.
      3. If, and to the extent, the actual number of employees meeting the retention requirements exceeds the number previously communicated to bidders.
   3. An employee or his/her agent shall not bring an action against a successor contractor or subcontractor without first giving written notice of the violation or breach and 30 days to cure.
   4. An awarding authority shall not terminate a service contract without first giving the successor contractor or subcontractor written notice of the violation or breach and 30 days to cure.
   5. Specifies that these provisions shall only apply to service contracts when an awarding agency decides to let an exclusive solid waste collection and transportation contract out to bid. It is not intended to determine whether or not a local agency should procure a service contract by inviting bids, extend an existing service contract, renegotiate its service contract with the prior contractor, or exercise any other right it possesses to determine aspects of solid waste handling that are of local concern.
   6. Specifies that these provisions do not modify, limit, or abrogate in any manner any franchise, contract, license, or permit granted or extended by a city, county, or other local government agency before January 1, 2017.
6. Specifies that these provisions do not apply to contracts awarded before January 1, 2017, or to contracts for which the bid process has been completed before January 1, 2017.

Background

Existing law already provides a 10 percent bidding preference for public transit service contractors and subcontractors who agree to retain employees of the previous contractor for a period of at least 90 days. That requirement was enacted by SB 158 (Alarcón, Chapter 103, Statutes of 2003). The author believes this bill is necessary to also protect the workers against a loss of a job due to contract changes in the collection and transportation of solid waste. This bill extends these provisions to public contracts for the collection and transportation of solid waste.

Related/Prior Legislation

SB 599(Mendoza, 2015) would have extended the provisions on the existing 10% bid preference for transit contracts to such contracts with the State of California. The bill was vetoed by Governor Brown.

AB 508(Swanson, 2011) was very similar, but not identical, to this bill and would have added contracts for solid waste handling and recycling to the existing 10% bid preference provisions. AB 508 was referred to, but never heard, in the Senate Appropriations Committee.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee, this bill could result in a General Fund state reimbursable mandate on local government, the magnitude of which is unknown, but potentially in the low hundreds of thousands of dollars annually.

SUPPORT: (Verified 8/12/16)

California Teamsters Public Affairs Council (source)

California Labor Federation, AFL-CIO

Recology

OPPOSITION: (Verified 8/12/16)

California Special Districts Association

California State Association of Counties

Inland Empire Disposal Association

Integrated Waste Management Task Force

League of California Cities

Los Angeles County Solid Waste Management Committee

Los Angeles County Waste Management Association

Solid Waste Association of Northern America

Solid Waste Association of Orange County

Waste Connections Inc.

ARGUMENTS IN SUPPORT: Proponents argue that when cities and counties contract for services like solid waste disposal, they are often focused on the costs of the bids, the level of service provided, and the type of diversion offered. In many cases, the workers fall through the cracks when contracts change hands. The existing workforce, trained and experienced, is summarily laid off and replaced.

Proponents argue that these mass layoffs hurt individual families, but also impact the local economy. Promoting a stable workforce allows workers to invest in and contribute to their community. It also means fewer workers relying on unemployment benefits or other taxpayer-funded programs.

The sponsor contends that this bill rewards companies who retain existing solid waste service employees for 90 days after the new contract takes effect with a 10 percent bid preference. This allows the company an opportunity to decide whether to retain the employee, while giving the employee additional time to prepare for a possible layoff job.

ARGUMENTS IN OPPOSITION: According to opponents of this bill, while well intentioned, this bill infringes on local control and flexibility. Opponents state that, although rehiring employees who are threatened with the loss of their jobs is common in the solid waste industry, they oppose the idea that this voluntary practice should be codified into law. They argue that there is no evidence of a widespread failure to rehire employees when a solid waste contracts change.

They also argue that local governments implement bidding processes for services primarily to assure services are rendered at the most affordable cost for residents. When 10 additional percentage points are factored into the overall score of a contractor’s bid, as proposed in this bill, the contract may be awarded to a bidder whose price is higher than the lowest responsible bidder. This preference may result in increases to ratepayers’ fees for waste collection, recycling, and disposal services, which could result in higher costs to consumers for many years to come.

Additionally, they argue that this type of requirement would make it difficult to switch providers even if there were problems with the very same employees to which this bill requires that an agency give preference. Finally, opponents argue that with limited resources, it is critical that local governments have authority over contracting and employment decisions to provide the most cost effective services.

ASSEMBLY FLOOR: 52-26, 5/5/16

AYES: Alejo, Arambula, Atkins, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Roger Hernández, Holden, Irwin, Jones-Sawyer, Levine, Lopez, Low, McCarty, Medina, Mullin, O'Donnell, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Rendon

NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Chávez, Dahle, Gallagher, Grove, Hadley, Harper, Jones, Kim, Lackey, Linder, Maienschein, Mathis, Mayes, Melendez, Obernolte, Olsen, Patterson, Steinorth, Wagner, Waldron, Wilk

NO VOTE RECORDED: Beth Gaines, Nazarian

Prepared by:

8/15/16 20:17:18

**** END ****

SENATE COMMITTEE ON

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 1669 (Roger Hernández) - Displaced employees: service contracts: collection and transportation of solid waste

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

AB 1669 would require a ten percent bid preference for bidders who agree to retain the employees of the prior contractor or subcontractor on local agency contracts for the collection and transportation of solid waste.

Fiscal Impact:

This bill could result in a General Fund state reimbursable mandate on local government, the magnitude of which is unknown, but potentially in the low hundreds of thousands of dollars annually.

Background:

Current law requires local agencies that put out a bid for public transit services to provide a 10 percent bidding preference to any bidder who agrees to retain employees of the prior contractor or subcontractor for at least 90 days. The law does not require a new contractor to retain employees of the prior contractor unless the bid preference is granted, nor does it require a new contractor to pay the same wages or offer the same benefits as the former contractor. The law, which has been in place since 2003, is intended to provide a measure of job security to transit workers when a local agency changes transit service contracts.

Proposed Law:

This bill would extend the existing 10 percent bid preference for public transit contractors who agree to retain employees, as specified, from a prior contractor or subcontractor to also include contracts for the collection and transportation of solid waste.

Related Legislation:

• SB 599 (Mendoza) of 2015 would have extended the provisions on the existing 10 percent bid preference for transit contracts to such contracts with the State. This bill was vetoed by the Governor.
• AB 508 (Swanson) of 2011 was very similar, but not identical, to this bill and would have added contracts for solid waste handling and recycling to the existing 10 percent bid preference provisions. AB 508 was referred to, but never heard, in this Committee.
• SB 158 (Alarcon), Statutes of 2003, Chapter 103, created the bid preference for contracted transit services for public agencies.

Staff Comments:

The California Constitution requires the State to reimburse local agencies and school districts for certain costs it mandates. If the Commission on State Mandates (Commission) were to determine that the bill contains such mandated costs, state reimbursement would be required. The bill would apply to any local government agency, including any city, county, special district, transit district, joint powers authority, or nonprofit corporation that awards or otherwise enters into contracts for the collection and transportation of solid waste in California. Consequently, the fiscal impact of this bill depends on the extent to which local agencies file claims with the Commission. The number of future claims in unknown.

As previously noted, current law authorizes a similar local bid preference for public transit services. No test claims have been filed with the Commission for the public transit bid preference.

-- END --

SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS

Senator Tony Mendoza, Chair

2015 - 2016 Regular

Bill No: AB 1669 Hearing Date: June 22, 2016

Subject: Displaced employees: service contracts: collection and transportation of solid waste

KEY ISSUE

Should the Legislature require a ten percent bid preference for bidders who agree to retain the employees of the prior contractor or subcontractor on contracts for the collection and transportation of solid waste?

ANALYSIS

Existing law:

1. Requires all bidders on public transit service contracts to advise the awarding authority whether or not they will retain the employees of the prior contractor/subcontractor. (Labor Code §1070-1074)
2. Requires awarding authorities who put out a bid for public transit service to provide a 10 percent bidding preference to contractors and subcontractors who agree to retain the employees of the prior contractor/subcontractor for a period of at least 90 days.
3. Requires existing contractors to provide awarding authorities with specified employee information, including the number of employees performing services under the service contract and their wages, benefits and job classifications to assist bidding contractors and subcontractors in costing their bids.
4. Exempts contractors/subcontractors from retaining employees for "cause," limited to the employee’s performance or conduct or failure to pass any required substance and alcohol test, physical examination, criminal background check required by law or any other lawful qualification.
5. Authorizes the new contractor/subcontractor to pay alternate wages and provide alternate benefits from those of the prior contractor/subcontractor.
6. Authorizes the new contractor/subcontractor to retain fewer employees than the prior contractor, if necessary. In such a situation, the employees shall be retained by seniority within the given job classification.
7. Authorizes employees who have not been offered employment or who have been discharged in violation of the provisions of this bill to bring suit against the contractor/subcontractor in superior court and provides for remedy in the form of reinstatement, back pay, benefits and attorney's fees and costs.
8. Obliges an awarding authority, after public hearing, to terminate a contract substantially breached by a contractor/subcontractor. Provides that such a terminated contractor/subcontractor is ineligible to bid or be awarded a contract/subcontract with the terminating awarding authority for between one and three years, to be determined by the awarding authority.
9. Provides similar employment retention provisions for employees of janitorial and building maintenance contractors, as specified. (Labor Code §1060-1065)

This Bill would extend the existing 10 percent bid preference for public transit contractors who agree to retain employees (as specified above) from a prior contractor or subcontractor to also include contracts for the collection and transportation of solid waste.

Additionally, this bill would:

1. Provide a definition of “solid waste” found in the Public Resources Code.
2. Specify that “subcontractor” includes any person who performs a portion of the contractor’s express obligations under a service contract but does not include a contractor’s vendors, suppliers, insurers, or other service providers.
3. Require that existing service contractors (for both public transit and solid waste contracts) provide the specified employee information – total number, wages, benefits – to bona fide bidders in writing at least 30 days before bids for the service contract are due.
4. Specify that the following applies to service contracts for the collection and transportation of solid waste:
   1. A successor contractor/subcontractor is required to retain only employees whose employment would be terminated with the contractor changes.
   2. A successor contractor/subcontractor is not required to retain an employee under a prior service contract under any of the following circumstances:
      1. If the employee does not meet any standard hiring qualification lawfully required by the successor contractor or subcontractor for the position.
      2. If the successor would be required to terminate or reassign an existing employee covered under a collective bargaining agreement in order to hire the employee of the prior contractor/subcontractor.
      3. If, and to the extent, the actual number of employees meeting the retention requirements exceeds the number previously communicated to bidders.
   3. An employee or his/her agent shall not bring an action against a successor contractor or subcontractor without first giving written notice of the violation or breach and 30 days to cure.
   4. An awarding authority shall not terminate a service contract without first giving the successor contractor or subcontractor written notice of the violation or breach and 30 days to cure.
5. Specify that these provisions do not apply to contracts awarded before January 1, 2017, or to contracts for which the bid process has been completed before January 1, 2017.

COMMENTS

1. Need for this bill?

Existing law already establishes a 10 percent bidding preference for public transit service contractors and subcontractors who agree to retain employees of the previous contractor for a period of at least 90 days. That requirement was enacted by Senate Bill 158 (Alarcón) of 2003. The author believes this bill is necessary to also protect the workers against a loss of a job due to contract changes in the collection and transportation of solid waste. This bill would extend these provisions to public contracts for the collection and transportation of solid waste.

2. Proponent Arguments:

This bill is sponsored by the California Teamsters Public Affairs Council who state that this bill is intended to prevent workers from being displaced when a city’s contract for solid waste services changes companies. They argue that when cities and counties contract for services like solid waste disposal, they are often focused on the costs of the bids, the level of service provided, and the type of diversion offered. In many cases, the workers fall through the cracks when contracts change hands. The existing workforce, trained and experienced, is summarily laid off and replaced.

Proponents argue that these mass layoffs hurt individual families, but also impact the local economy. Promoting a stable workforce allows workers to invest in and contribute to their community. It means people can stay in their homes, kids can stay in their schools, and families can retain health insurance. It also means fewer workers relying on unemployment benefits or other taxpayer-funded programs.

The sponsor contends that this bill rewards companies who retain existing solid waste service employees for ninety days after the new contract takes effect with a 10 percent bid preference. This allows the company an opportunity to decide whether to retain the employee, while giving the employee additional time to prepare for a possible layoff job.

3. Opponent Arguments:

According to opponents of this measure, while well intentioned, this bill would infringe on local control and flexibility. Opponents state that, although rehiring employees who are threatened with the loss of their jobs is common in the solid waste industry, they oppose the idea that this voluntary practice should be codified into law. They argue that there is no evidence of a widespread failure to rehire employees when a solid waste contract changes hands. They also argue that local governments implement bidding processes for services primarily to assure services are rendered at the most affordable cost for residents. When ten additional percentage points are factored into the overall score of a contractor’s bid, as proposed in the bill, the contract may be awarded to a bidder whose price is higher than the lowest responsible bidder. This preference may result in increases to ratepayers’ fees for waste collection, recycling, and disposal services, which could result in higher costs to consumers for many years to come.

Additionally, they argue that this type of requirement would make it difficult to switch providers even if there were problems with the very same employees to which this bill requires that an agency give preference. Finally, opponents argue that sustaining the necessary degree of local control over solid waste collection activities has been a cornerstone of California policy for over 100 years. With limited resources, they argue that it is critical that local governments have authority over contracting and employment decisions to provide the most cost effective services.

4. Prior and Related Legislation:

SB 599(Mendoza) of 2015 would have extended the provisions on the existing 10% bid preference for transit contracts to such contracts with the State of California. This bill was vetoed by Governor Brown.

AB 508(Swanson) of 2011 was very similar, but not identical, to this bill and would have added contracts for solid waste handling and recycling to the existing 10% bid preference provisions.AB 508 was referred to, but never heard, in the Senate Appropriations Committee.

SB 158 (Alarcon), Statutes of 2003, Chapter 103, created the bid preference for contracted transit services for public agencies.

SUPPORT

California Teamsters Public Affairs Council (Sponsor)

California Labor Federation, AFL-CIO

Recology

OPPOSITION

California Special Districts Association

California State Association of Counties

Inland Empire Disposal Association

Integrated Waste Management Task Force

League of California Cities

Los Angeles County Solid Waste Management Committee

Los Angeles County Waste Management Association

Solid Waste Association of Northern America

Solid Waste Association of Orange County

Waste Connections Inc.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 1669

Author:(Roger Hernández)

As Amended Ver:April 28, 2016

Majority vote

SUMMARY: Extends an existing bid preference for public transit contractors who agree to retain employees to also include contracts for the collection and transportation of solid waste, as specified.

EXISTING LAW:

1. Requires all bidders on public transit service contracts to advise the awarding authority whether they will retain the employees of the prior contractor/subcontractor.
2. Requires awarding authorities who put out a bid for public transit service to provide a 10% bidding preference to contractors and subcontractors who agree to retain the employees of the prior contractor/subcontractor for a period of at least 90 days.
3. Requires existing contractors to provide awarding authorities with specified employee information, which will assist bidding contractors/subcontractors in costing their bids.
4. Exempts contractors/subcontractors from retaining employees for "cause," as defined.
5. Authorizes the new contractor/subcontractor to pay alternate wages and provide alternate benefits from those of the prior contractor/subcontractor.
6. Authorizes the new contractor/subcontractor to retain fewer employees than the prior contractor, if necessary. In such a situation, the employees shall be retained by seniority within the given job classification.
7. Authorizes employees who have not been offered employment or who have been discharged in violation of the provisions of this bill to bring suit against the contractor/subcontractor in superior court.
8. Provides for remedy in the form of reinstatement, back pay, benefits and attorney's fees and costs.
9. Obliges an awarding authority, after public hearing, to terminate a contract substantially breached by a contractor/subcontractor.
10. Provides that such a terminated contractor/subcontractor is ineligible to bid or be awarded a contract/subcontract with the terminating awarding authority for between one and three years, to be determined by the awarding authority.
11. Also provides for employment retention protection for employees of janitorial and building maintenance contractors, as specified.

FISCAL EFFECT: According to the Assembly Appropriations Committee, this bill will result in potential General Fund state reimbursable mandated costs, likely minor, to extend a 10% bid preference to solid waste handling and recycling contractors. Existing law authorizes a similar local bid preference for public transit services. No test claims have been filed with the State Mandates Commission for the public transit bid preference.

COMMENTS: Existing law already establishes a 10% bidding preference for public transit service contractors and subcontractors who agree to retain employees of the previous contractor for a period of at least 90 days. That requirement was enacted by SB 158 (Alarcón), Chapter 103, Statues of 2003. This bill would extend those requirements to contractors and subcontractors who submit bids for contracts for the collection and transportation of solid waste.

This bill is sponsored by the California Teamsters Public Affairs Council. The sponsor states that this bill is intended to prevent keeping workers from being displaced when a city's contract for solid waste services changes companies. They argue that when cities and counties contract for services like solid waste disposal, they are often focused on the costs of the bids, the level of service provided, and the type of diversion offered. In many cases, the workers fall through the cracks when contracts change hands. The existing workforce, trained and experienced, is summarily laid off and replaced.

The sponsor contends that this bill rewards companies who retain existing solid waste service employees for 90 days after the new contract takes effect with a 10% bid preference. This allows the company an opportunity to decide whether to retain the employee, while giving the employee additional time to prepare for a possible layoff job.

Opponents state that, although rehiring employees who are threatened with the loss of their jobs is common in the solid waste industry, they oppose the idea that this voluntary practice should be codified into law. They state that there is no evidence of a widespread failure to rehire employees when a solid waste contract changes hands. Moreover, competition in the solid waste industry has resulted in a consolidation of contractors. Opponents argue that to the extent that a new state law requiring a bid preference will mean an increase to operating costs, it may drive even more companies into extinction. Finally, they argue that sustaining the necessary degree of local control over solid waste collection activities has been a cornerstone of California policy for over 100 years.

Analysis Prepared by: Ben Ebbink / L. & E. / (916) 319-2091 FN: 0002790

ASSEMBLY THIRD READING

ATR Bill Id:AB 1669

Author:(Roger Hernández)

As Amended Ver:March 8, 2016

Majority vote

SUMMARY: Extends an existing bid preference for public transit contractors who agree to retain employees (as specified) to also include contracts for the collection and transportation of solid waste.

EXISTING LAW:

1. Requires all bidders on public transit service contracts to advise the awarding authority whether they will retain the employees of the prior contractor/subcontractor.
2. Requires awarding authorities who put out a bid for public transit service to provide a 10% bidding preference to contractors and subcontractors who agree to retain the employees of the prior contractor/subcontractor for a period of at least 90 days.
3. Requires existing contractors to provide awarding authorities with specified employee information, which will assist bidding contractors/subcontractors in costing their bids.
4. Exempts contractors/subcontractors from retaining employees for "cause," as defined.
5. Authorizes the new contractor/subcontractor to pay alternate wages and provide alternate benefits from those of the prior contractor/subcontractor.
6. Authorizes the new contractor/subcontractor to retain fewer employees than the prior contractor, if necessary. In such a situation, the employees shall be retained by seniority within the given job classification.
7. Authorizes employees who have not been offered employment or who have been discharged in violation of the provisions of this bill to bring suit against the contractor/subcontractor in superior court.
8. Provides for remedy in the form of reinstatement, back pay, benefits and attorney's fees and costs.
9. Obliges an awarding authority, after public hearing, to terminate a contract substantially breached by a contractor/subcontractor.
10. Provides that such a terminated contractor/subcontractor is ineligible to bid or be awarded a contract/subcontract with the terminating awarding authority for between one and three years, to be determined by the awarding authority.
11. Also provides for employment retention protection for employees of janitorial and building maintenance contractors, as specified.

FISCAL EFFECT: According to the Assembly Appropriations Committee, this bill will result in potential General Fund state reimbursable mandated costs, likely minor, to extend a 10% bid preference to solid waste handling and recycling contractors. Existing law authorizes a similar local bid preference for public transit services. No test claims have been filed with the Commission on State Mandates for the public transit bid preference.

COMMENTS: Existing law already establishes a 10% bidding preference for public transit service contractors and subcontractors who agree to retain employees of the previous contractor for a period of at least 90 days. That requirement was enacted by SB 158 (Alarcón), Chapter 103, Statues of 2003. This bill would extend those requirements to contractors and subcontractors who submit bids for contracts for the collection and transportation of solid waste.

This bill is sponsored by the California Teamsters Public Affairs Council. The sponsor states that this bill is intended to prevent keeping workers from being displaced when a city's contract for solid waste services changes companies. They argue that when cities and counties contract for services like solid waste disposal, they are often focused on the costs of the bids, the level of service provided, and the type of diversion offered. In many cases, the workers fall through the cracks when contracts change hands. The existing workforce, trained and experienced, is summarily laid off and replaced.

The sponsor contends that this bill rewards companies who retain existing solid waste service employees for 90 days after the new contract takes effect with a 10% bid preference. This allows the company an opportunity to decide whether to retain the employee, while giving the employee additional time to prepare for a possible layoff job.

Opponents state that, although rehiring employees who are threatened with the loss of their jobs is common in the solid waste industry, they oppose the idea that this voluntary practice should be codified into law. They state that there is no evidence of a widespread failure to rehire employees when a solid waste contract changes hands. Moreover, competition in the solid waste industry has resulted in a consolidation of contractors. Opponents argue that to the extent that a new state law requiring a bid preference will mean an increase to operating costs, it may drive even more companies into extinction. Finally, they argue that sustaining the necessary degree of local control over solid waste collection activities has been a cornerstone of California policy for over 100 years.

Analysis Prepared by: Ben Ebbink / L. & E. / (916) 319-2091 FN: 0002755

Date of Hearing: April 20, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1669

Author:(Roger Hernández) – As Amended Ver:March 8, 2016

Urgency: No State Mandated Local Program: Yes Reimbursable: Yes

SUMMARY:

This bill extends an existing bid preference for public transit contractors who agree to retain employees to also include contracts for the collection and transportation of solid waste.

FISCAL EFFECT:

Potential GF state reimbursable mandated costs, likely minor, to extend a 10 percent bid preference to solid waste handling and recycling contractors. Existing law authorizes a similar local bid preference for public transit services. No test claims have been filed with the Commission on State Mandates for the public transit bid preference.

COMMENTS:

1. Purpose. Current law requires local agencies that put out a bid for public transit services to provide a 10% bidding preference to any bidder who agrees to retain employees of the prior contractor or subcontractor for at least 90 days. The law does not require a new contractor to retain employees of the prior contractor unless the bid preference is granted, nor does it require a new contractor to pay the same wages or offer the same benefits as the former contractor. The law, which has been in place since 2003, is intended to provide a measure of job security to transit workers when a local agency changes transit service contracts.

This bill, sponsored by the California Teamsters Public Affairs Council, would apply the 10% bid preference to contractors for the collection and transportation of solid waste. This bill would apply to any local government agency, including any city, county, special district, transit district, joint powers authority, or nonprofit corporation that awards or otherwise enters into contracts for the collection and transportation of solid waste in California. This bill is sponsored by the California Teamsters Public Affairs Council.

1. Prior related legislation. This bill is similar to AB 508 (Swanson) from 2011. AB 508 was referred to, but never heard, in the Senate Appropriations Committee.
2. Support. According to the sponsor, when cities and counties contract for services like solid waste disposal, they are often focused on the costs of the bids, the level of service provided, and the type of diversion offered. In many cases, the workers fall through the cracks and are laid off or replaced when a new contract is put in place. This bill rewards companies who retain existing solid waste service employees for ninety days after the new contract takes effect with a 10% bid preference. This allows the company an opportunity to decide whether to retain the employee, while giving the employee additional time to prepare for a possible layoff job. Existing law already provides such a preference in bids for transit services.
3. Opposition. The Solid Waste Association of North America is opposed to this bill. According to the opposition, local governments should have authority over contracting and employment decisions to provide the most cost effective services. Preference for one contractor or subcontractor over another should not be pre-determined by a requirement that may be inappropriate based on unique contracting, staffing, and economic circumstances that local governments may face. Bidders have the option to retain previous employees and local governments already have the right to put such terms in procurement documents to meet local needs.

Analysis Prepared by: Misty Feusahrens / APPR. / (916) 319-2081

Date of Hearing: April 13, 2016

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Susan Talamantes Eggman, Chair

ABPCA Bill Id:AB 1669 (

Author:Roger Hernández) – As Amended Ver:March 8, 2016

SUBJECT: Displaced employees: service contracts: collection and transportation of solid waste.

SUMMARY: Requires any local government agency that awards contracts for the collection and transportation of solid waste to give a 10% preference to any bidder who agrees to retain, for at least 90 days, employees of a previous contractor or subcontractor. Specifically, this bill:

1. Expands an existing 10% bid preference for public transit service contract bidders who agree to retain, for a period of not less than 90 days, employees of a previous contractor or subcontractor to also apply to contracts for the collection and transportation of solid waste.
2. Defines “solid waste” to mean all putrescible and nonputrescible solid, semisolid, and liquid wastes, including garbage, trash, refuse, paper, rubbish, ashes, industrial wastes, demolition and construction wastes, abandoned vehicles and parts thereof, discarded home and industrial appliances, dewatered, treated, or chemically fixed sewage sludge which is not hazardous waste, manure, vegetable or animal solid and semisolid wastes, and other discarded solid and semisolid wastes. “Solid waste” does not include any of the following wastes:
   1. Hazardous waste, as specified;
   2. Radioactive waste regulated, pursuant to the Radiation Control Law, as specified; and,
   3. Medical waste regulated, pursuant to the Medical Waste Management Act, as specified.
3. Makes findings and declarations regarding the economic impacts when a local agency awards a solid waste contract to a new contractor and the new contractor does not retain employees of the prior contractor, such as unnecessary reliance on unemployment insurance, public social services, and health programs.
4. Provides that, if the Commission on State Mandates determines that this bill contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made, pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.

EXISTING LAW:

1. Requires all bidders on local agency public transit service contracts to declare as part of the bid whether or not they will retain the employees of the prior contractor or subcontractor for a period of not less than 90 days.
2. Requires local agencies that put out a bid for public transit services to provide a 10% bidding preference to any bidder who agrees to retain the employees of the prior contractor or subcontractor for a period of not less than 90 days.
3. Requires existing contractors to provide local agencies with specified employee information to assist bidding contractors or subcontractors in costing their bids.
4. Exempts contractors or subcontractors from their obligation to retain employees for "cause," as defined.
5. Provides that the new contractor or subcontractor is not required to pay the same wages or offer the same benefits as those of the prior contractor or subcontractor.
6. Authorizes the new contractor or subcontractor to retain fewer employees than the prior contractor, if necessary. In such a situation, the employees shall be retained by seniority within the given job classification.
7. Authorizes employees who have not been offered employment or who have been discharged in violation of the provisions of current law to bring suit against the contractor or subcontractor in superior court, and provides for remedy in the form of reinstatement, back pay, benefits and attorney's fees and costs.
8. Requires a local agency, after a public hearing, to terminate a contract substantially breached by a contractor or subcontractor. A terminated contractor or subcontractor is ineligible to bid or be awarded a contract with the terminating local agency for between one and three years, to be determined by the local agency.
9. Provides for employment retention protection for employees of janitorial and building maintenance contractors, as specified.

FISCAL EFFECT: This bill is keyed fiscal.

COMMENTS:

1. Author's Statement. According to the author, "Even as the economy shows signs of recovery, many workers who have lost their jobs are finding it difficult or nearly impossible to find new ones. When cities or counties contract for garbage services, they are often focused on the costs of the bids and the level of service provided. In many cases, workers fall through the cracks when contracts change hands. The existing workforce, trained and experienced, is summarily laid off and replaced.

"These mass layoffs hurt individual families, but also impact the local economy. Promoting a stable workforce allows workers to invest in and contribute to their community. It means people can stay in their homes, kids can stay in their schools, and families can retain health insurance. It also means fewer workers are relying on unemployment insurance or other taxpayer-funded programs."

1. Background and Bill Summary. Current law requires local agencies that put out a bid for public transit services to provide a 10% bidding preference to any bidder who agrees to retain employees of the prior contractor or subcontractor for at least 90 days. The law does not require a new contractor to retain employees of the prior contractor unless the bid preference is granted, nor does it require a new contractor to pay the same wages or offer the same benefits as the former contractor. The law, which has been in place since 2003, is intended to provide a measure of job security to transit workers when a local agency changes transit service contracts.

This bill would add contracts for the collection and transportation of solid waste to these provisions, thereby offering the same protections to solid waste workers. This bill would apply to any local government agency, including any city, county, special district, transit district, joint powers authority, or nonprofit corporation that awards or otherwise enters into contracts for the collection and transportation of solid waste in California. This bill is sponsored by the California Teamsters Public Affairs Council.

1. Previous Legislation. SB 158 (Alarcon), Chapter 103, Statutes of 2003, established a bidding preference for public transit service contractors and subcontractors who agree to retain, for a period of at least 90 days, employees of a previous contractor or subcontractor.

AB 2189 (Koretz) of 2002 would have required a public transit contractor to retain the employees of a former contractor during a 60-day transition employment period. AB 2189 was vetoed with the following message:

"Unlike the problems that plague workers in the janitorial industry, workers that labor under public contracts are not subject to the exploitation that motivated me to sign the legislation for janitorial workers."

SB 20 (Alarcon), Chapter 795, Statutes of 2001, created the Displaced Janitor Opportunity Act, which requires successor janitorial contractors with 25 or more employees to retain for 60 days employees of the previous employer performing janitorial or building maintenance service duties with four months or more service.

1. State Mandate. This bill is keyed a state mandate, which means the state could be required to reimburse local agencies for implementing the bill's provisions if the Commission on State Mandates determines that the bill contains costs mandated by the state.
2. Arguments in Support. The California Teamsters Public Affairs Council, sponsor of this measure, states, "The current law for transit service contracts has been in effect for nearly fifteen years. It has stabilized the industry, allowing drivers to retain work. There have been no reported cases of litigation on the issue, which is a strong indication of how smoothly this law has functioned. As a practical matter, in the vast majority of cases, all of the bidders take the preference, which results in no difference in the cost to the contracting entity but avoids needless job displacement."
   
3. Arguments in Opposition. The Solid Waste Association of North America, in opposition, writes, "This legislation would infringe on local control and flexibility. With limited resources, it is critical that local governments have authority over contracting and employment decisions to provide the most cost effective services. Preference for one contractor or subcontractor over another should not be pre-determined by a requirement that may be inappropriate based on unique contracting, staffing, and economic circumstances that local governments may face. Bidders have the option to retain previous employees and local governments already have the right to put such terms in procurement documents to meet local needs."
4. Double-Referral. This bill was heard by the Labor and Employment Committee on April 6, 2016, where it passed with a 5-2 vote.

REGISTERED SUPPORT / OPPOSITION:

Support

California Teamsters Public Affairs Council

California Labor Federation

Opposition

Inland Empire Disposal Association

Los Angeles County Waste Management Association

Solid Waste Association of North America

Solid Waste Association of Orange County

Analysis Prepared by: Angela Mapp / L. GOV. / (916) 319-3958

Date of Hearing: April 6, 2016

ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT

Roger Hernández, Chair

ABPCA Bill Id:AB 1669 (

Author:Roger Hernández) – As Amended Ver:March 8, 2016

SUBJECT: Displaced employees: service contracts: collection and transportation of solid waste

SUMMARY: Extends an existing bid preference for public transit contractors who agree to retain employees (as specified) to also include contracts for the collection and transportation of solid waste.

EXISTING LAW:

1. Requires all bidders on public transit service contracts to advise the awarding authority whether they will retain the employees of the prior contractor/subcontractor.
   
2. Requires awarding authorities who put out a bid for public transit service to provide a 10 percent bidding preference to contractors and subcontractors who agree to retain the employees of the prior contractor/subcontractor for a period of at least 90 days.
   
3. Requires existing contractors to provide awarding authorities with specified employee information, which will assist bidding contractors/subcontractors in costing their bids.
   
4. Exempts contractors/subcontractors from retaining employees for "cause," as defined.
   
5. Authorizes the new contractor/subcontractor to pay alternate wages and provide alternate benefits from those of the prior contractor/subcontractor.
   
6. Authorizes the new contractor/subcontractor to retain fewer employees than the prior contractor, if necessary. In such a situation, the employees shall be retained by seniority within the given job classification.
   
7. Authorizes employees who have not been offered employment or who have been discharged in violation of the provisions of this bill to bring suit against the contractor/subcontractor in superior court.
   
8. Provides for remedy in the form of reinstatement, back pay, benefits and attorney's fees and costs.
   
9. Obliges an awarding authority, after public hearing, to terminate a contract substantially breached by a contractor/subcontractor.
   
10. Provides that such a terminated contractor/subcontractor is ineligible to bid or be awarded a contract/subcontract with the terminating awarding authority for between one and three years, to be determined by the awarding authority.
    
11. Also provides for employment retention protection for employees of janitorial and building maintenance contractors, as specified.

FISCAL EFFECT: Unknown

COMMENTS: Existing law already establishes a 10 percent bidding preference for public transit service contractors and subcontractors who agree to retain employees of the previous contractor for a period of at least 90 days. That requirement was enacted by Senate Bill 158 (Alarcón) of 2003.

This bill would simply extend those requirements to contractors and subcontractors who submit bids for contracts for the collection and transportation of solid waste.

This bill is double referred to the Local Government Committee upon passage out of this Committee

Arguments in Support

This bill is sponsored by the California Teamsters Public Affairs Council. The sponsor states that this bill is intended to prevent keeping workers from being displaced when a city’s contract for solid waste services changes companies.

They argue that when cities and counties contract for services like solid waste disposal, they are often focused on the costs of the bids, the level of service provided, and the type of diversion offered. In many cases, the workers fall through the cracks when contracts change hands. The existing workforce, trained and experienced, is summarily laid off and replaced.

These mass layoffs hurt individual families, but also impact the local economy. Promoting a stable workforce allows workers to invest in and contribute to their community. It means people can stay in their homes, kids can stay in their schools, and families can retain health insurance. It also means fewer workers relying on unemployment benefits or other taxpayer-funded programs.

The sponsor contends that this bill rewards companies who retain existing solid waste service employees for ninety days after the new contract takes effect with a 10 percent bid preference. This allows the company an opportunity to decide whether to retain the employee, while giving the employee additional time to prepare for a possible layoff job. Existing law already provides such a preference in bids for transit services.

Arguments in Opposition

Opponents state that, although rehiring employees who are threatened with the loss of their jobs is common in the solid waste industry, they oppose the idea that this voluntary practice should be codified into law. They state that there is no evidence of a widespread failure to rehire employees when a solid waste contract changes hands. Moreover, competition in the solid waste industry has resulted in a consolidation of contractors. Opponents argue that to the extent that a new state law requiring a bid preference will mean an increase to operating costs, it may drive even more companies into extinction. Finally, they argue that sustaining the necessary degree of local control over solid waste collection activities has been a cornerstone of California policy for over 100 years.

Prior Related Legislation

This bill is similar, but not identical to, AB 508 (Swanson) from 2011. AB 508 was referred to, but never heard, in the Senate Appropriations Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

California Labor Federation, AFL-CIO

California Teamsters Public Affairs Council (sponsor)

Opposition

Inland Empire Disposal Association

Los Angeles County Waste Management Association

Solid Waste Association of North America

Solid Waste Association of Orange County

Analysis Prepared by: Ben Ebbink / L. & E. / (916) 319-2091