Posted on March 8th, 2017
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The California Employer Bill of Rights?
Yes, that is a question mark.
A Bill of Rights for California Employers doesn’t currently exist but one is certainly needed.
We, the employers of this great State create the jobs and we the employers create the tax revenue for California politicians to spend.
So why aren’t the politicians making laws that protect us business owners from frivolous lawsuits and more importantly from inequitable jury awards and extortion style attorneys on the other side?
BECAUSE THERE IS NO INCENTIVE FOR CALIFORNIA OR THE POLITICIANS PERSONALLY TO PROTECT EMPLOYERS.
When it comes to California Labor Laws, the conversation is almost always centered around employee rights. It’s a foregone conclusion (to us anyway!) that employers should also have rights. But employer rights is not something we ever hear about. I have been doing my best to change this with interviews on employer defense.
When compared to the numerable advantages given to employees, the odds can seem grim for owners of a California based business. However, you as an employer should be entitled to certain rights also.
Just because they’re not hanging on every wall of the office (as employee rights are), it doesn’t mean they should not exist.
If you are an employer, I don’t need to tell you that trying to run a successful business while navigating California’s complex labor laws is an extremely challenging undertaking.
In my experience working with hundreds of employers over the years, business owners do not (except in rare cases) intentionally break the law.
Typically, employers run into Labor issues because they’ve misunderstood or are unaware of certain laws and they way they work. Because these laws are not being applied correctly, or in some cases at all, employers can eventually get bitten.
Employee side lawyers actively seek out labor violations with the intention of exploiting employers and their business. What seems like a minor infraction or a mistake, is seen by them as the potential for a very big payday.
We are at a point in California where the biggest liabilities for a business owner are their employees.
Although, initially well intentioned, the labor laws have morphed into a way to incentivize fraud and extortion.
Until business owners create a political organization that gives a voice to employers in Sacramento, the laws are going to continue to erode the business environment and remove the incentive for entrepreneurs to invest their time and money into new business ventures. Our businesses cannot continue to remain vulnerable because of unequal employee leverage.
Who wants to take a stand?
I don’t want anarchy or revolution, I just want the incentive to sue employers removed from existing laws. I want a fair penalty for labor violations that does not put your businesses out of business.
And most of all, I want employee side attorneys to be held accountable for filing frivolous lawsuits.
Like the United States Bill of Rights was added to the Constitution to quell overreach, abuse of power, and protect individual freedoms, employers need a Bill of Rights to prevent the same harms.
Between the state of California’s out of control labor laws and the greedy employee side attorneys looking to exploit employers for personal gain, it’s time for us to demand our own amendments.
This is our Bill of Rights for California Employers.
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Reduce the incentive for employees to sue for minor things.
For minor issues and infractions, employers must be given the opportunity to show that they did not intentionally violate the law. They should be given an appropriate window of time to investigate, address, and correct the problem.
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There should be limits placed on attorney fees.
The current law allows attorneys to collect their entire attorney fees if they win on one cause of action no matter how small.
That little tiny error could cost you, the employer, thousands of dollars in attorneys fees both for your defense and also the fees of the attorney that sued you.
“That’s right, the law makes you fund the lawsuit against you. “
Limiting the amount of attorney’s fees either as a percentage of the amount for the infraction, or only for attorney’s fees associated to the specific cause of action won would limit the attorney’s fees considerably, and reduce the incentive to sue employers for every little issue.
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Insurance Companies should be required to investigate fraud not just automatically settle out.
Workers Compensation fraud is completely out of control. Anytime an employee is fired, an employer risks having a worker’s compensation claim filed.
Sure, insurance will cover it but they will likely settle and then raise the employer’s premium. At the end of the day, the employee wins; the employee’s attorney wins; the insurance company wins; The EMPLOYER LOSES.
All fraud should be investigated and punished to remove the incentive to file fraudulent claims and attorneys should be held liable for fake injury claims they file.
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Employers should not have strict liability for violation of labor codes by supervisors.
Employers should only be held responsible if the employee has reported the issue and the owner had the opportunity to try to correct the issue. Current laws allow an employer to be held strictly liable for any violation of the labor code by a supervisor.
For example, an absentee owner hires management to run their business; management violates the labor code; employer is automatically held liable.
- The Labor Board should be required to be neutral!
The Labor Board claims to be neutral but just a visit to any Labor Board office makes it clear that they are representing employees only. The judge, jury and executioner is the lawyer representing the employee.
This is clearly not fair and not how it actually is and how its presented is completely different.
The Labor Board should hear both sides of the story impartially and rule on the merits of each situation. For the most part they try to quickly settle cases against the employer knowing they are in tough situation that they may just want to end even if they did nothing wrong.
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Leave Arbitration Agreements (ADR) options alone!
Arbitration agreements are good for both sides. It allows an expert former judge or attorney to hear both sides and decide if there has been a violation of the labor code. It is also faster and less expensive process.
Why are plaintiff’s side attorneys attempting to get rid of arbitration agreements?
Because they do not get a sympathetic jury and potentially lose their very big attorney fees award!
There is a big push right now by attorneys who represent employees to get rid of arbitration agreements. They have been pushing all kinds of stories on why they should go away.
Do not buy it! They want them to go away so they can line their pockets with more lawsuits.
- Protect personal assets from judgements!
Corporate laws incentivize creation of business and jobs because it allows a person to start a business, and protect the assets that are not part of the business.
Setting up a business entity like an LLC or a Corporation helps protect you from someone from going after you personal assets (your house, your car etc..) in a judgement against you.
Guess which area of law this does not apply to? That is right…. Labor Law.
If you lose in certain labor cases they can go after your personal assets and you do not have the protections of business formations that business people have long relied on.
Why in the world do these protections not apply to labor disputes?
If a labor violation is found, both the owner of the business and even a supervisor who does not own the business is personally liable!
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There should be caps on jury awards!
How is it possible that a minimum wage employee that claimed seven months of labor violations received a jury award in the amount of $185 million dollars? Simple. Juries are made of employees not employers.
As employees they do not understand the struggle of starting their own business from nothing. They cannot relate to the difficulty of trying to run a successful business, keep customers happy, keep employees happy and make a profit.
As employees they will never know the burden us employers have trying to keep up with California’s crazy taxes and labor laws.
So of course these juries made up of employees are going to relate to plaintiff who is an employee.
We are saying that if an employee has been wronged and an employer has been foud to have violated a labor law the employee should be compensated. That is fair.
What is not fair are these outrageous jury awards that do not match the damages. At the end of the day if you are awarding these employee plaintiffs these absurd amounts only two parties benefit.
The employee plaintiff and their attorneys.
But if you put that company out of business how many people does that cause harm to? Not only the employer but the dozens or maybe even hundreds of employees that worked there and will no longer have jobs.
Conclusion
Too many employers in the state of California are hostages in their own businesses. They are afraid to terminate a bad employee because the cost of proving they did not violate the labor laws is considerably more expensive than just paying to have the problem go away.
It isn’t right, it isn’t sustainable and it’s a risky recipe if California wants to retain its status as the 6th largest economy in the world.
What about you? Have you had enough yet? Are you ready to challenge the State of California to demand an Employer Bill of Rights?
If you want to join us in our fight to make California a great place to do business again keep following us here on the blog and connect with me below.
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Hi I’m John Fagerholm, the founding partner of DefendMyBiz. My mission is to defend employers like you from California’s unfair labor laws.
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