Coyote Blog

Like many who do business in California, I often complain about the regulatory burden (free at last!)  People will ask, "So what one regulation would you get rid of?"  The problem is that this is a really hard question to answer because in most cases it is not any one regulation in particular, but the accumulation of regulation.  When a building collapses under a snow load, it is impossible to blame any single snowflake.

Have you noticed when you buy a product, you still get an insert that looks like the old instruction manuals we used to get, but that is in fact just page after page of legal and safety warnings with the actual useful stuff moved online?  Well companies have the same thing for employees, typically called an employee handbook.   Most of this is not really useful to employees but it is critical for compliance with a myriad of government regulations.  Our company always had an employee handbook, but starting around 2005 we were forced to have two -- one for California and one for everywhere else.   Each were reviewed and updated every few years.  Then in 2012 or so we were forced to switch to annual updates of the California handbook.   And then around 2018 we had to shift to twice a year updates of the California handbook, as the California legislature was creating so many new rules every session and California courts were creating so many new precedents and interpretation of existing rules that we had to constantly work to keep up with it.

Rules for meal breaks, arbitration agreements, non-compete agreements, cell phone use, background screening, privacy notices, and a million other things kept changing.  Just to pick one example at random, the California legislature keeps adding new forms of employee leave entitlements to this list:

• Sick Leave
• New Parent Leave
• Pregnancy Disability Leave
• Family and Medical Leave
• Bereavement Leave
• Voting Leave
• Jury Duty or Subpoena Leave
• Domestic Violence Victim Leave
• Crime Victims Leave
• Leave for School Activities
• Literacy Education Leave
• Drug/Alcohol Rehab Leave
• Kin Care
• Organ Donor/Bone Marrow Donor Leave
• Military Injury Leave
• Military Spouse Leave
• Reproductive Loss Leave

The last one I think really gives you a flavor of how the California Legislature spends its time.  Here is more detail:

Under Government Code 12945.6 (SB 848), employees at a company with at least five employees are allowed to take five days of leave within three months of a:

• failed adoption,
• failed surrogacy,
• miscarriage,
• stillbirth, or
• an unsuccessful assisted reproduction.

Seriously -- someone had to get worked up enough to create and sponsor a bill and push it through the entire process and get the governor to sign it to provide mandatory work leave for someone whose artificial insemination did not yield a child on the first try.  Good God my brother-in-law probably would have built up 6 months of leave as he had to try for years to finally be successfully, so long we started calling him the sperminator from all the times he had to fill a cup.

There is nothing too small to catch the California legislature's regulatory eye.   And almost every one of these laws might individually look OK or at least strike some empathy chord.  But in sum it is just overwhelming, particularly when it will not sit still.  There is always more and more piling on.

I will tell you a California labor regulation story.   California requires every employee to get a 30-minute unpaid meal break after working a certain number of hours.  The requirement is not to give the employee an opportunity to eat undisturbed, the employer has an affirmative obligation to make sure the employee gets and TAKES their meal break.   That seems like a nice thing to do -- what kind of Scrooge would deny their folks lunch?

Our first interaction with this law happened years ago where we had a gatehouse at a lake in California that required someone in it for 8 hours.  But by California meal break rules, we had to allow them an unpaid lunch for 30 minutes in the middle of that so they only got paid 7.5 hours per day.  Several employees who had this shift on various days approached us and begged to be able to work through lunch because they needed the extra money.  We let them.  And then come October (timed to get money for Christmas) and boom we get hit with a suit (turns out they were being advised the whole time and the entire situation was a trap they explicitly set for us).  We eventually had to settle -- though we had their request in writing, a California court decided that the employee could only waive their right to a work-free meal break with a signed letter EVERY DAY.  After this the rules got tighter and tighter.  Later we got sued when an employee who was wearing a company radio got a call on the radio during their break.  Boom, another suit for not giving them an uninterrupted 30 minutes without work.  So we started requiring everyone to check their radios and cell phones in a special locker before their break.  Eventually, to avoid lawsuits, we automatically paid the 1 hour missed meal penalty to any employee who started their lunch late -- we hired an extra person in the payroll department to audit time cards looking for meal break violations.  But then a few employees were intentionally starting their lunch late in order to collect the penalty.   Eventually we got to the insane work rule -- a rule that many companies in California have -- that it is a firing offense not to take one's meal break and to start it no later than 4:49 into their shift.

And this is just one example.  We have gone through similar hoops on everything from mediation agreements to background screening.

However, I will answer the question of what one or two regulations I would get rid of it I could waive a magic wand.  I would say

1.  the private attorney general act (PAGA) because it makes all the others worse.  PAGA authorizes aggrieved employees to file lawsuits to recover civil penalties on behalf of the State of California for Labor Code violations.
2.  The other change I would make is to eliminate the California Coastal Commission.  This is the single most destructive regulatory agency I have ever encountered, made worse by its incredible mission and scope creep and the fact that it has a history of giving special treatment to those with friends on the board or some kind of political pull.