©2023 Seyfarth Shaw LLP www.seyfarth.com 2023 Cal-Peculiarities | 389 18.7 Collective Bargaining Agreement Waiver Issues Assembly Bill (AB) 1654, effective January 2019, provided an exemption for employees in the construction industry from the Private Attorneys General Act of 2004 (PAGA) if employees’ collective bargaining agreements met certain requirements.27 To qualify for a PAGA exemption, the CBA must: apply to working conditions, wages, and hours of work of employees in the construction industry, ensure employees receive a regular hourly wage not less than 30% more than the minimum wage, prohibit Labor Code violations redressable by PAGA, contain a grievance and binding arbitration procedure to redress Labor Code violations remedied by PAGA, expressly waive the requirements of PAGA in clear and unambiguous terms, and authorize an arbitrator to award all remedies available under PAGA, except for penalties payable to the LWDA. Similarly, on January 1, 2022, Senate Bill (SB) 646 went into effect, which provides a limited exception from PAGA for certain janitorial employees performing work pursuant to a collective bargaining agreement.28 For the exception to apply, the janitorial employees must be covered under a CBA in effect before July 1, 2028, that expressly provides for the wages, hours of work, and working conditions of employees, and provides premium wage rates for all overtime hours worked. The CBA must also: ensure employees recieve total hourly compensation, inclusive of wages, health insurance, pension, training, vacation, holiday, and fringe benefit funds, not less than 30% more than the state minimum wage, prohibit Labor Code violations redressable by PAGA, provide for a grievance and binding arbitration procedure to redress those violations, and allow the union to pursue a grievance on behalf of all affected employees, expressly waive the requirements of PAGA in clear and unambiguous terms, and authorize an arbitrator to award any and all remedies otherwise available under the Labor Code. Although SB 646 only covers the property services industries and janitorial employees, the passage of the bill along with AB 1654 raise potential for other industries to seek similar exemptions from PAGA. 1 Lab. Code §§ 1164-1164.13. 2 Gerawan Farming, Inc. v. ALRB (United Farm Workers), 189 Cal. Rptr. 3d 261 (2015), rev. granted, 191 Cal. Rptr. 3d 497 (Cal. Aug. 19, 2015). The Supreme Court agreed to decide whether (1) the MMC process violates the equal protection clauses of the state and federal Constitutions, (2) the MMC process effects an unconstitutional delegation of legislative power, (3) an employer can oppose a certified union’s request for referral to the MMC process by asserting that the union has abandoned the bargaining unit. 3 Gerawan Farming, Inc. v. ALRB (United Farm Workers), 3 Cal. 5th 1118 (2017), cert. denied, 139 S. Ct. 60 (2018). 4 NLRB v. Babcock, 351 U.S. 105 (1956). 5 8 Cal. Code Regs. § 20900. Perhaps this cal-peculiar regulation made sense back in 1975, when many employees lived on the growers’ property and lacked the communications technology that have since evolved over the last half-century.
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