California Legislative Update: Governor Approves Bill on Appeal Bonds as Agriculture Bill Slowly Makes its Way to His Desk

Late last week, Governor Schwarzenegger approved a clarification of the law on appeals of Labor Commissioner decisions.  Meanwhile, SB 1121, concerning overtime for agricultural workers, reached the Governor's desk on July 20, and the Senate amended a bill concerning background checks.  A summary of these bills and key developments follow below.

AB 2772 (Swanson) Appeal Bonds - This bill clarifies that an employer wishing to appeal an administrative judgment by the Labor Commissioner is required to first post a bond.

As previously reported, the Legislature sent this bill to the Governor on July 6. The Governor approved the bill on July 15, and the Secretary of State Chaptered the bill the same day. As a non-urgency bill, the changes will take effect January 1, 2011.

Labor Code Section 98.2 currently provides: “Whenever an employer files an appeal pursuant to this section, the employer shall post an undertaking with the reviewing court in the amount of the decision, order, or award.”

The bill will amend Section 98.2 to read: “As a condition to filing an appeal pursuant to this section, an employer shall first post an undertaking with the reviewing court in the amount of the order, decision, or award.”

This bill was in response to a California appellate court decision (Progressive Concrete Inc.,v. Parker, 136 Cal. App. 4th 540, 548 (2006)) that held that the language in Section 98.2 was merely “directory,” and that a specific court order was necessary before an employer can be required to post a bond.

The effect of the court’s holding was to leave entirely to the discretion of a court whether or not to issue an order requiring the positing of the bond. Section 98.2 will expressly state that as a condition to filing an appeal of an administrative judgment, an employer must first post a bond with the reviewing court.

SB 1121 (Florez) Overtime - This bill would remove the exemption for agricultural employees from overtime and meal period requirements.

As previously reported, the California Legislature passed this bill on July 1 and it was expected to go to the Governor’s desk for veto or signature shortly thereafter. However, it appears the bill had been stalled in the enrollment process, according to the online official California Legislation Report.

On July 20, the bill was enrolled and sent to the Governor’s desk.  During the legislative session, the Governor must sign or veto legislation within 12 days of the day of transmittal or it becomes law without signature.

AB 482 (Mendoza) Consumer Credit Reports - This bill would prohibit employers, with the exception of certain financial institutions, from obtaining a consumer credit report for employment purposes unless the information meets specified requirements (see below).

Updating a previous report, the California Senate recently amended this bill to include an exception for trade secrets.

The bill language now allows for consumer credit reports for employment purposes if the information sought is (1) substantially job-related, meaning that the position of the person for whom the report is sought has access to money, other assets, or trade secrets or other confidential information, and (2) the position of the person for whom the report is sought is a position in the state Department of Justice, a managerial position, that of a sworn peace officer or other law enforcement position, or a position for which the information contained in the report is required to be disclosed by law or to be obtained by the employer.

Please check back regularly for updates on these and other bills.

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