Senator Padilla’s Bill Closing Predatory Loopholes in Public Contracts Passes Senate Floor
SACRAMENTO – Senate Bill 751, Senator Steve Padilla’s (D-San Diego) legislation prohibiting municipalities from entering into exclusive service agreements that permit waste haulers to excuse the company from performing its duties during a labor dispute was passed today by the California State Senate.
In 2022, Senator Padilla had a front row seat to failure of business resulting in a widespread public health emergency. Republic Services failed to reach a labor agreement that triggered a strike, but in the franchise agreement with the City of Chula Vista, Republic Services had placed a provision that shielded the company from liability in the face of a strike or work stoppage. As workers called for better wages and the strike continued, Republic Services halted trash pick-up leaving residents to deal with the consequences. The clause shielded the company from liability for the trash piling up throughout the city. The vendor stalled for time while trash piled up, causing a public health emergency.
This provision, known as force majeure, is typically intended to protect parties in the face of an uncontrollable circumstance – “an act of God.” These provisions usually define uncontrollable circumstances as a natural disaster or an insurrection and are meant to cover action outside of the control of both parties. The franchise agreement with the City included labor disputes, entirely within a company’s ability to negotiate, as an uncontrollable circumstance.
Shielded by this loophole, the vendor had no incentive to come to an agreement with workers, all while trash piled up around the city. In the end, workers were forced to accept a contract they had already refused, in order to get back to work and be able to serve their community. San Diego and Chula Vista residents and workers were left deeply impacted in the wake of this public health threat. However, these exclusive monopoly agreements are a statewide issue, not just a regional one.
“Waste haulers should not be allowed to leverage a looming public health crisis and risk the public’s wellbeing in order to gain a better bargaining position,” said Senator Padilla. “These vendors weaponized a standard contract provision against unions and accepted the disruption to communities as an acceptable consequence of their stall tactics. We need to make sure that taxpayers gets the services they pay for, and we protect the public from entangled in a labor dispute.”
Senate Bill 751 will ensure no franchise contract, license, or permit for solid waste handling services that a local agency enters into or amends on or after January 1, 2024, can excuse the service provider from performing their duties in the event of a labor dispute. Stopping municipalities from entering into these predatory agreements helps California stop an emergent public health crisis before it begins and protect workers’ legal right to strike and collectively bargain while maintaining protections for circumstances that are outside of the control of both parties. California residents should not have to suffer for workers exercising their right to strike and companies should not be shielded from liability when workers are demanding better wages and safer working conditions.
“SB 751 by State Senator Steve Padilla will even the playing field between solid waste contractors and their employees should employees exercise their right to free speech,” said Jaime Vasquez, Secretary-Treasurer of Teamsters Local 542. “SB 751 will make sure that solid waste companies conduct themselves responsibly when entering into bargaining with their employees. For too long have companies extended strikes as a way to starve their employees forcing them into accepting a less than appropriate offer. This bill will now force companies to negotiate fairly and suffer the consequences should they not act as a responsible employer. We want to thank Senator Steve Padilla for putting sanitation workers in the forefront and allowing for their voice to finally be heard.”
The bill passed the Senate on a 30 to 9 vote. It now heads to the Assembly.
Steve Padilla represents the 18th Senate District, which includes the communities of Chula Vista, the Coachella Valley, Imperial Beach, the Imperial Valley, National City, and San Diego. Prior to his election to the Senate in 2022, Senator Padilla was the first person of color ever elected to city office in Chula Vista, the first Latino Mayor, and the first openly LGBT person to serve or be elected to city office. Website of Senator Steve Padilla: https://sd18.senate.ca.gov/