NFIB California Main Street Minute, June 5-9

Date: June 05, 2023

From your small-business advocacy team in Sacramento

Welcome to the June 5-9 edition of the NFIB California Main Street Minute.

The Legislature

  • One of the more important deadlines on the legislative calendar passed Friday (June 2). It was by this date all bills must have passed their house of origin and into the opposite chamber or are dead for the rest of the session.
  • NFIB targeted 47 bills for support, opposition, or monitoring. Because of the control progressives have in the California Legislature, of the 15 bills targeted for support by NFIB and its business coalition allies, only one made it out of its house of origin and into the opposite chamber, in this case, Assembly Bill 1355 was passed on to the Senate.
  • Of the 32 remaining bills, all of which were opposed by NFIB and its coalition partners, 20 passed into the opposite chamber and 12 died. A brief description of all 47 bills and their status can be read here.

Tim’s Take

  • Tim Taylor, NFIB California’s chief legislative advocate, reports, “There were some victories among the bills that we opposed, including:

“AB 747 (McCarty), which would have essentially made non-compete clauses practically and functionally illegal, died in the Assembly. It additionally threatened attorneys with potential disbarment should they craft non-compete clauses.

“AB 259 (Lee), which would have levied a wealth tax of 1.5% against the world-wide net worth of California’s top earners and would have deputized the DOJ to enforce those measures, died in the Assembly.

“AB 1690 (Kalra), which was the spot bill for potentially revisiting the single-payer health care issue, died in the Assembly.

“SB 809 (Smallwood-Cuevas), which would have made it illegal for employers to use prior convictions of employee candidates as a reason for not hiring them, died in the Senate.”

Next Big Deadlines

  • June 15, state budget must be passed by midnight
  • September 14, last day for each house to pass bills. Recess for the rest of year commences upon adjournment
  • October 14, last day for governor to sign bills.

Governor Sympathetic on UI Debt

  • NFIB California State Director John Kabateck and California Business Roundtable President Robert Lapsley met with Dee Dee Myers, Gov. Gavin Newsom’s director of his Office of Business and Economic Development and top economic confidant, on Friday (June 2) to gauge the state’s chief executive’s thoughts on California’s enormous unemployment insurance trust fund debt with the federal government.
  • To cope with the extraordinary demands for unemployment benefits caused by the pandemic, around 20 states had to borrow from the federal government to keep their trust funds solvent. To date, only California and New York have not paid Uncle Sam back. They are, however, paying the interest on their loans (they have no choice), but, unlike other states, none of the principal.
  • Myers told Kabateck and Lapsley that the governor was very concerned and sympathetic about the problem but could not find any legislative support for doing something about it. Both men also discussed with Myers infrastructure difficulties and doing something about the California Environmental Quality Act (CEQA).

NFIB Small Business Roundtable

  • The first in a series of re-ignited Small Business Roundtables was a success. Members met with Assemblyman Josh Hoover. A brief recap with photos and a call to get involved in future ones can be read here.


Highlights from NFIB Legislative Program Manager Caitlin Lanzara’s weekly report

  • Supreme Court Update

Glacier Northwest, Inc. v. International Brotherhood of Teamsters – Unions Cannot Destroy Employer Property without Consequences

On Thursday, the Supreme Court decided that unions cannot intentionally destroy employer property without consequences. In a nearly unanimous decision (8-1), the Court held that the National Labor Relations Act does not preempt state tort law, meaning companies can seek damages for the intentional destruction of their property even during labor disputes. The decision explained, “the Union executed the strike in a manner designed to compromise the safety of Glacier’s trucks and destroy its concrete… Because the Union took affirmative steps to endanger Glacier’s property rather than reasonable precautions to mitigate that risk, the NLRA does not arguably protect its conduct.”

NFIB’s amicus brief before the Supreme Court can be found here, and our statement on the decision can be read here.

  • Administrative Law/Regulatory Update – NLRB General Counsel Memo Essentially Bans Non-Competes

On May 30, NLRB General Counsel Jennifer Abruzzo sent a memo to all NLRB regional offices claiming the proffer, maintenance, and enforcement of non-compete provisions in employment contracts and severance agreements almost always violates the NLRA. Abruzzo claims non-competes “chill employees in the exercise of Section 7 rights unless it is narrowly tailored to address special circumstances justifying the infringement on employee rights.”

This memo comes on the heels of the Board’s recent decision in McLaren Macomb, in which the Board held that severance agreements violate the NLRA if they include confidentiality or non-disparagement restrictions.

June Webinar

  • The Legal Center’s monthly webinar is June 7th and the topic is Classifying Workers Correctly: Employee or Independent Contractor? This webinar will cover the federal and state law requirements for worker classification and the penalties for misclassifying employees. Registration is now open here.

Next Main Street Minute June 12.

Photo snip courtesy of the California State Senate website

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