MOORLACH UPDATE — CRP and AB 465 — September 20, 2015

The fall California Republican Party (CRP) Convention was held at the Anaheim Marriott and concluded on Sunday at noon. The Sacramento Bee was there this weekend and provides the first piece below. The photo is from the morning General Session. Orange County is in the bottom right-hand corner.

Attending CRP conventions has been a fun opportunity over the past two-plus decades. For an account of the March 1993 Convention, see the LOOK BACKS section in MOORLACH UPDATE — Harold De Boer — March 13, 2013 John Moorlach. One name that is mentioned
is John Ben’s, who was there this weekend. He and I spent time together at this convention and shared fond memories of conventions past. .

What made this convention very special is the number of delegates who thanked me for my UPDATEs and the e-mails that my office has been sending concerning Caltrans. Thank you to all those who had a chance to thank me personally. Your affirmations are deeply appreciated.

The questioning was around Presidential candidate Donald Trump. This is a free country and everyone is allowed to exercise their freedom of speech. Although many may complain about how Donald Trump communicates his message, a number of those polled are reflecting, I believe, a frustration with how things are going. They are looking for someone who can close a deal, negotiate, and get things done in a country that is sinking deep into debt. From that perspective, we should be listening to what these voters are expressing.

The lead article in Sundays’ OC Register Business section is an indepth piece on AB 465. The reporter e-mailed me the following question:

"Why did you vote against it? The bill, which is on Brown’s desk, as you know, would require that arbitration agreements between employers and employees be voluntary."

My response:

1. Conflicted with both State and Federal case law and is preempted.

2. Unnecessary, as adequate protections already exist.

3. Potential for increasing litigation and overwhelming the courts.

4. Undermines job creation, making California even less competitive and sending the wrong message.

5. I could on, especially with addressing myths and facts.

Her response:

"John, thanks. This came in after we already shipped the OC delegation box that ran with the story. Just included the votes without quotes. Thanks."

I’m sure the piece was lengthy enough without adding comments from the delegation.

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California GOP softens on immigration, but will message get drowned out?

California Republican Party adopts more moderate plank on immigration

State GOP fears rhetoric in presidential race will drown out message

Despite new immigration position, activists gravitate to Donald Trump

Activists attend the California Republican Party’s fall convention in Anaheim on Sept. 20, 2015.

Activists attend the California Republican Party’s fall convention in Anaheim on Sept. 20, 2015. dsiders The Sacramento Bee/David Siders

By David Siders and Christopher Cadelago

dsiders

The California Republican Party’s adoption of a more moderate plank on immigration Sunday marked a step forward in the party’s long, mostly fruitless effort to draw more Latino voters into its fold.

In a floor vote Sunday, the party struck terms from its platform such as “illegal alien” and withdrew the party’s support for a requirement specifying workers on guest visas get tamper-proof identification cards allowing the government to track them.

But as Republican activists decamped from their fall convention over the weekend, it was unclear how deeply their new immigration platform would resonate. The presidential race – not a party position statement – plays most prominently for voters, and this year’s contest has dwelled on a frontrunner, Donald Trump, who has called immigrants rapists and criminals.

“It’s terrible,” said Tony Quinn, a political analyst and former Republican legislative aide. “The Trump stuff just drowns everything else out.”

If it continues, Quinn said, “you can just imagine these poor (state) legislators who have to run for re-election when people are debating birthright citizenship and hauling people down to Mexico and that kind of stuff.”

More than in most other states, California Republicans know the consequence of strident rhetoric on immigration. Proposition 187, the 1994 initiative to restrict public services to undocumented immigrants, was later overturned by the courts. But it alienated many Latino voters as they were emerging as a major force in the state.

Republican registration has fallen to 28 percent statewide.

In their second debate, on Wednesday, Trump reiterated that he would build a wall on the U.S.-Mexico border, then deport “a lot of really bad dudes in this country from outside.” He criticized Florida Gov. Jeb Bush, who has called for a path to legal status for undocumented immigrants, for speaking Spanish on the campaign trail.

At the party’s convention hotel in Anaheim, many members of the state’s political and professional class were left shaking their heads.

“It kills us,” said Assemblyman Rocky Chávez, an Oceanside Republican who is running for a U.S. Senate seat. “If you have Trump up there running his message, that would pretty much assure any Republican in California is going to go down. It’s not going to be just me. It’s going to be Assembly members and senators … Somebody like him would pretty much damage the image of all the good, hard-working Republicans.”

Even if Trump cannot maintain his early standing in the polls, as many analysts predict, Chávez said, “For California, what he brings back is a lot of the rancor of the 1990s, and I think that will hurt us.”

The new immigration platform was supported by the party’s legislative leaders and passed overwhelmingly on the convention floor. The new language removed a statement that election ballots and other government documents be printed only in English. However, the platform maintains the party’s support for English as the “official language of government.”

Yet even as the state party moderated its own positions, some in its rank-and-file look fondly on an outsider who holds a hard line. Trump, the real estate developer and TV personality, is popular not only nationally – but also in California. He leads all other Republican candidates among GOP voters in this state, with 24 percent support, according to a recent University of Southern California/Los Angeles Times poll.

Barbara Fleeman Hazlett, president of a Republican group in northern San Diego County, supported Chávez in his most recent election and hugged him in a lobby of the convention hotel. But she said Trump is “bringing up a lot of good points,” especially on immigration, and Don Genhart, of Palm Desert, said he plans to open a Trump campaign committee in the Coachella Valley.

“He’s saying what we all feel and are afraid to say,” Genhart said. “The border, the wall, the Trump wall, I think that’s going to be great.”

Conservative activists who opposed the platform change noted that the document maintains the party’s opposition to gay marriage and abortion rights and protection of gun rights.

California is a major donor state in presidential elections, but its ability to influence candidates’ platforms – or to insert state-specific issues into the contest – has been limited. The primary election will not reach California until June, long after the nomination typically is decided.

Despite the presence of all of the Republicans in Simi Valley for a debate at the Ronald Reagan Presidential Library two days before the opening of the state party convention, only one candidate, Arkansas Gov. Mike Huckabee, lingered in the Los Angeles area to address the California delegation. Wisconsin Gov. Scott Walker, who had been booked to speak at a Saturday night dinner, cancelled on the event to campaign in early nominating states, instead.

Huckabee lamented that presidential debates so far have focused more on social issues than taxes, education and infrastructure.

“It’s frustrating, quite frankly,” he said.

Huckabee has mustered attention less for his tax policies than for his defense of Kim Davis, the Kentucky county clerk who refused to issue marriage licenses to gay couples. In a Twitter feud with California Lt. Gov. Gavin Newsom, Huckabee compared Davis’ decision to Newsom’s issuance of marriage licenses to gay couples while mayor of San Francisco. Newsom noted that once the court ordered him to stop, he did.

But Newsom and other Democrats have reserved most of their energy for Trump, delighting in the controversy surrounding his candidacy. Before the debate last week, Newsom released an animated video attacking Trump for immigration policies he said would be a “disaster.” On the last night of this year’s legislative session, Senate Democrats adopted a resolution condemning Trump’s views on immigration and calling on Californians to divest from his businesses.

State Sen. John Moorlach, a Republican from Costa Mesa, viewed excitement surrounding Trump not as a liability, but an opportunity to engage voters on subjects other than social issues. Moorlach, who was moderating a panel on pension reform at the convention, said Trump has shone light on an electorate that is “mad and they’ve had enough and they want to see it fixed,” he said.

Republican presidential candidates other than Trump could help the party on immigration, said Bill Whalen, a research fellow at Stanford University’s Hoover Institution and former speechwriter for Gov. Pete Wilson. Sen. Marco Rubio, of Florida, and Ohio Gov. John Kasich, among others, hold more moderate views on issue.

If Bush wins the nomination and “he’s going around the state speaking Spanish and offering what Californians might see as a more enlightened view of conservatism,” Whalen said, “he might be that guy (to help the party’s image), too.”

Republicans in Sacramento have tried repeatedly to distance themselves from their Washington counterparts.

Two years ago, then-Senate Republican Leader Bob Huff and others from his caucus joined Democratic colleagues in supporting a Democratic resolution urging Congress to take a comprehensive approach to improving the nation’s broken immigration system. In doing so, Huff sought to advance the many benefits to the U.S. from foreign immigration, citing the economy and social and entrepreneurial aspects.

California Republicans also have been prodded on immigration by their political allies in business. The California Chamber of Commerce has pushed for the California GOP delegation in the House to support legislation that would create a guest-worker program and establish a path to citizenship for those living in the country illegally.

A smattering of GOP state lawmakers also have backed a handful of major immigration bills in recent years, including measures allowing undocumented immigrants to receive driver’s licenses and practice law.

Marcelino Valdez, the state party official from Fresno who authored the amended platform language, said it was an essential message to send in order to remain competitive in elections across California.

“These are things that we can point to when we’re talking to people door to door,” Valdez said, offering a counter to the anti-immigrant exuberance around Trump.

“I was the first to say that what Donald Trump is saying doesn’t reflect who we are as Republicans and conservatives,” Valdez said.

Still, he credited Trump with the state party’s action on immigration.

“Donald Trump kind of put a little pressure so that we do get this correct – so that people listen to our points of view and where we stand on the issues, and they understand that we are pro-immigrant,” Valdez said.

David Siders: 916-321-1215, @davidsiders

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Day in Court

Gov. Jerry Brown faces a decision on mandatory workplace arbitration

BY MARGOT ROOSEVELT

Steve Hamil, a 42-year-old machinist at a surgical device company in Rancho Santa Margarita, was looking forward to his year-end bonus.

But last December, Applied Medical Resources sent a letter to its 3,000-plus employees saying that the bonuses, which the company regularly gives to workers at all levels, would depend on their signing a release waiving any claim to sue the company over workplace issues.

Any claims, whether for unpaid wages and missed rest breaks or racial, gender and other types of discrimination, would go to private arbitration, the release stipulated.

“Hosed for the holidays – a Christmas bonus in exchange for giving up our rights,” said Hamil, who signed the agreement but since has moved to another company. “People were upset – it was insulting.”

In fact, Hamil and his co-workers already had waived their right to sue by signing an arbitration agreement when they got hired, according to Applied Medical CEO Said Hilal, who characterized the year-end letter as a way to acknowledge the need to handle grievances in-house.

Arbitration agreements protect companies against “aggressive, grabby, fly-by-night attorneys” who file class-action lawsuits, Hilal said. “They find an employee you might have shorted by a dollar, and then they collect millions in legal fees.”

Under arbitration clauses, workers typically waive their rights to take complaints to the courts and to state and federal agencies. Instead, they are referred to the employer’s dispute resolution company, which provides a list of arbitrators from which to choose. The arbitrators, often attorneys or retired judges, make legally binding decisions in private, away from any media scrutiny.

Critics assert that forbidding class-action lawsuits and complaints to state labor agencies leaves low-income workers with little recourse against wage theft.

Attorneys will work on a contingency basis in class-action suits because there are multiple plaintiffs. But lawyers lack the financial incentive to take an individual worker’s case in an arbitration proceeding. The workers, many of whom make paltry wages, often cannot afford an attorney.

That unequal playing field, as worker advocates see it, has caught the attention of state politicians. Now companies’ ability to force employees to give up their day in court may be coming to an end in California.

A bill passed by the Legislature last month, AB 465, would make California the first state to ban arbitration agreements as a condition of employment and outlaw retaliation against current employees who refuse to sign them.

Gov. Jerry Brown is under intense pressure to veto the bill, which has been labeled a “job killer” by the California Chamber of Commerce and is opposed by some 40 trade groups representing homebuilders, restaurants, hotels, retailers and other industries.

Brownis under equal pressure to sign it by another 40-plus groups ranging from the American Civil Liberties Union to the Consumer Federation of California to labor unions representing nurses, truck drivers, firefighters, construction workers and others.

As yet, the governor has given no hint as to his inclination. He has until Oct. 11 to act or the bill automatically becomes law.

The California legislation comes in the wake of dramatic growth in the use of arbitration agreements as a condition of hiring.

The trend accelerated after a 5-4 United States Supreme Court decision in 2011 found that AT&T customers had given up their right to sue in the fine print of their service contract.

Mandatory arbitration clauses are becoming widespread not just in employment applications but in a broad variety of contracts, including credit card agreements and doctor’s forms. Businesses that had hesitated to impose them were emboldened by the Supreme Court decision.

The percentage of companies that used arbitration clauses to preclude class-action suits jumped from 16 percent in 2012 to 43 percent last year, according to a survey of 360 companies in 25 industries by the national law firm Carlton Fields Jorden Burt LLP, which represents employers.

In one high-profile case, a federal judge this month certified a class-action lawsuit against the car service Uber by three drivers who said the company mislabels employees as contractors. A majority of Uber’s 160,000 California drivers were excluded from the suit because they waived their rights when the company updated its employment contract last year.

The California legislation was spurred by a similar conflict at the Ports of Los Angeles and Long Beach, according to the California Labor Federation, which sponsored AB 465.

In the past year, the state’s Labor Commissioner has upheld complaints filed by port truckers claiming that their companies misclassified them as independent workers, thus depriving them of labor law protections that benefit employees.

In response to the successful complaints, trucking companies that employ hundreds of drivers are now insisting the drivers sign arbitration contracts waiving their right to file complaints, according to Julie Gutman Dickinson, a Teamsters union attorney who has been representing them.

“Many drivers are monolingual Spanish speakers,” she said. “They are not given copies of the arbitration agreements they are forced to sign in any language other than English. They are told they must sign if they want a job.”

Similarly, Spanish-speaking car wash workers who filed complaints in 2012 when their Santa Monica employer made them work off the clock found they unknowingly had signed arbitration agreements when they were hired.

Fast-food companies such as Pizza Hut, which employ low-wage workers, and janitorial services, with many non-English-speaking employees, also are folding arbitration clauses into job applications.

A key provision of AB 425 holds that the employer has “the burden of proving that the waiver was knowing and voluntary and not made as a condition of employment.”

The word “knowing” implies that the worker, even if he or she speaks another language, must understand the meaning of the arbitration agreement and that it involves waiving the right to sue.

Applied Medical is known for good wages and generous benefits. Skilled machinists and mold makers with only high school degrees can make six-figure salaries there. And the privately held company is unusual in awarding bonuses not just to managers but to employees across the board.

“If our company is doing well, everybody shares in it,” said CEO Hilal. “I know a lot of companies short their people, and that’s unconscionable. But that’s not us.”

Still, he is determined to avoid employee lawsuits. Protecting workers “should not be outsourced to shysters,” he said. “If the government is doing its homework, the rascals will be nailed.”

AB 465, Hilal predicted, will “give employment lawyers a blank check to go after companies. Every word will be worth several lawsuits. They will say if you didn’t translate to Thai, Mandarin and Vietnamese, then you haven’t made it clear.”

Caitlin Vega, the labor federation’s legislative counsel, insists that the new law “is not a ban on arbitration agreements – solong as they are voluntary. Employers who want them can explain why they are beneficial, and most workers may agree.”

Arbitration, she said, “Works between parties of relatively equal bargaining power, such as between businesses, or between unions and management. But it is unfair when one party is required to sign an agreement just to get a job.”

More and more, she adds, “These agreements are routinely required of low-wage immigrant workers, especially in industries with widespread labor abuses.”

AB 465 proponents say that arbitrators often favor corporate clients because dispute resolution companies want to be hired again. But this so-called “repeat player” theory is false, according to the California Chamber of Commerce, because an employee has an equal opportunity to pick the arbitrator from a list of candidates.

According to the Chamber, studies show that arbitration complaints are resolved faster than court cases. It cited a 2004 Cornell University survey that found that employees have a higher success rate in arbitration than in court.

More recent studies from UC Berkeley and Indiana University, however, found that under arbitration, fewer workers report wage theft, they win less often and awards are significantly smaller. That may be partially due to the growth of arbitration agreements in low-wage industries.

If AB 465 becomes law, companies will be severely restricted in their use of mandatory arbitration, according to Veronica Gray, an Irvine employment attorney with Nossaman LLP. “Employers … will have the burden of proving they were not made a condition of employment.”

If companies argue that a potential employee who refused to sign was not hired for other reasons, “That sets the employer up for a retaliation claim – and a very slippery slope,” Gray said.

Hilal sees Applied Medical’s offer of year-end bonuses as a generous gift, albeit with a string attached. “We go over and above salaries when the going gets good,” he said. “In the process, we ask, ‘Please level and tell us if have you any grievance. If you don’t feel like it, that’s fine. Then skip the discretionary pay.’”

But under AB 465, Applied Medical’s denying the bonus would be seen as retaliation, Vega said.

Hamil, the machinist who felt “hosed,” sees that as good news. Arbitration agreements “obligate you to agree to something when you never know what’s going to happen in the future,” he said.

The legislation, as he sees it, “would help the little guy.”

Contact the writer: mroosevelt Twitter: @MargotRoosevelt

How O.C.’s state legislators voted

AB 465, a California bill to end mandatory workplace arbitration, highlights the deep partisan divide over labor law.

In Orange County’s delegation, as in the legislature overall, Republicans opposed the bill and Democrats favored it.

In the Senate, the county’s only Democrat, Tony Mendoza (Artesia), voted yes, and the four Republicans, Patricia Bates (Laguna Niguel), Robert Huff (Diamond Bar), John Moorlach (Costa Mesa) and Janet Nguyen (Garden Grove), voted no.

In the Assembly, the county’s only Democrat, Tom Daly (Anaheim), voted yes. Five county Republicans voted no: Travis Allen (Huntington Beach), William Brough (Dana Point), Ling Ling Chang (Diamond Bar), Matthew Harper (Huntington Beach) and Kim Young (Fullerton).

Republican Donald Wagner (Irvine) did not vote.

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