Los Angeles Business Journal

Bad Performance Review

OP-ED: California Assembly’s latest bill on worker retention is another example of the state impairing free enterprise. By MICHELE DENNIS Monday, August 15, 2011

In regards to your article in the July 11 issue headlined “State to Lock In Building Workers?,” if AB 350 becomes law, then almost every workplace in California will face the prospect of poorer building services. And our state’s already imperiled free enterprise system will suffer yet another legal setback, making it an even less attractive place for companies to do business.

This union-backed bill mandates that if a company providing building services such as maintenance, security, landscaping, window cleaning or food catering is discharged for poor service, the new provider must retain the very same workers employed by the rejected company for 90 days – regardless of performance levels.

Virtually every workplace would be impacted: offices, factories, hotels, hospitals and retailers, as well as apartment complexes. It could cause a ripple effect that would damage the state’s reputation throughout the country and the world, as tourists, business travelers and conventioneers experience poor service and spread the word when they return home.

The California Chamber of Commerce, the Building Owners and Managers Association of California, the California Hotel and Lodging Association, the California Apartment Association and nearly every other major economic group in the state opposes this blatant attempt to strengthen labor union membership. It is bad law because the U.S. Supreme Court held in 1976 in a case brought by an AFL-CIO member union that neither “States nor the National Labor Relations Board is afforded flexibility in picking and choosing which economic device of labor and management shall be branded unlawful.”

If made law, AB 350 would undermine the right of an employer to discharge a poor performing employee at will. Further, it could cause lawsuits against an employer if the workers that company “inherits” from the former firm have criminal records, abuse drugs or alcohol on the job and cause some form of injury. Companies would be deprived of their basic legal right to ensure the competence of their employees. And yet they would be held legally responsible for that bad behavior without being able to make background checks or impose disciplinary actions.

It is bad economic policy because it signals to business people that California’s government imposes restrictions hampering their right to hire the best people and to discharge them when they fail to perform their duties.

The high-performing workers of a building’s new service provider will be discriminated against. These hard-working individuals have the misfortune of not being “in position” at the time the law passes, so they can become a protected class of employees. They may outperform other workers and be more tenant friendly than those in a given building, but even if their employer gains the service contract, they won’t be able to service that building because the current workers are protected by law.

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