MINUTES OF MEETING

      ASSEMBLY COMMITTEE ON LABOR AND MANAGEMENT

 

      Sixty-seventh Session

      April 29, 1993

 

 

 

The Assembly Committee on Labor and Management was called to order by Chairman Chris Giunchigliani at 3:58 p.m., Thursday, April 29, 1993, in Room 119 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Meeting Agenda, Exhibit B is the Attendance Roster.

 

 

COMMITTEE MEMBERS PRESENT:

 

      Ms. Chris Giunchigliani, Chairman

      Mr. Bernie Anderson, Vice Chairman

      Mr. Douglas A. Bache

      Mr. John C. Bonaventura

      Mr. John Carpenter

      Mr. Tom Collins, Jr.

      Mr. Peter G. Ernaut

      Mr. Lynn Hettrick

      Mrs. Erin Kenny

      Mr. John B. Regan

      Mr. Michael A. Schneider

 

 

COMMITTEE MEMBERS ABSENT:

 

      None

 

GUEST LEGISLATORS PRESENT:

 

      Mr. Robert E. Price, Assemblyman District 17

 

STAFF MEMBERS PRESENT:

 

      Mr. Donald Williams, Principal Research Analyst (LCB)

      Mr. Frank Krajewski, Senior Research Analyst (LCB)

 

OTHERS PRESENT:

 

      Mr. Frank Daykin; Mr. Knight Allen, Nevada Casino Dealers

      Association; Mr. Eddie Rivera, Nevada Casino Dealers   Association; Mr. Robert A. Ostrovsky, Nevada Resort       Association; Ms. Lynn Grandlund, GWC, ASA, NAIB, EON;

      Mr. Sam McMullen, Nevada Self-Insurers Association;

      Mr. Marty Bibb, National Federation of Independent Business

      and National Association of Independent Insurers; and

      Ms. Bonnie James, Las Vegas Chamber of Commerce.

 

ASSEMBLY BILL NO. 343:  Requires good cause for termination

                            of employment.

 

Ms. Giunchigliani opened the hearing on AB 343 by asking the bill's sponsor, Assemblyman Price, and Mr. Frank Daykin to address the committee. 

 

Mr. Price stated AB 343 was essentially the product of the workings of the Uniform Law Commissioners, an organization of attorneys and legislative types since the late 1800's.  His understanding of the organization was they have taken subject matters of import to various states and diligently put together uniform proposals for states to use regarding these various subject matters.  Mr. Daykin worked on A.B. 343 which dealt with the termination of employees.  Mr. Price spoke on the problems between employers and employees.  He stated without contracts, employees were in a very weak position.  Mr. Price further stated the reasons an employee might be fired were surprising, i.e., wearing one's hair the wrong way or someone did not like one on a particular day.  Without a procedure in place, this would be firing at will. Mr. Price came from a union background and, in business, had always been protected by a union contract.  He further cited examples of colleagues.  In the 1960's a legislator was elected and fired from his job.  Because of this situation, in 1967 the Senate introduced and passed the first Nevada legislation (SB 365) which became NRS Chapter 218.  This legislation protected legislators in the job area.  It was later amended to deal with seniority, pension plan, etc.  Another example, (EXHIBIT C), referred to Frances Hawkins of Hawthorne.  Ms. Hawkins was elected to the legislature and her school board attempted to fire her. Mr. Price spoke to Ms. Hawkins the day of this meeting and asked her what the result was of her lawsuit against the school board of Hawthorne.  In the final analysis, the school board did have the legal right to dismiss her because her contract mentioned the best interest of the school district, yet did not fire her because the school board did not follow the procedure set forth in the contract.  Mr. Price referred to yet another example, this one closer to home.  Delta Airlines attempted to refuse to allow Assemblyman Jim Gibbons to serve his legislative position.  Mr. Price, the National Conference of State Legislatures and the state Assembly passed a resolution condemning Delta Airlines, which was at that time, the official airlines of the National Conference of State Legislatures.   Eventually the situation was resolved and Mr. Gibbons was allowed to serve with the state legislature and retain his job.

Mr. Price mentioned a conversation he had with Assemblywoman Gene Segerbloom.  When she became a teacher in 1940 in Boulder City, Nevada, the teacher's contract required teachers to be single and risk being fired if they were to marry.  Mr. Price emphasized today it was not against the law to take that same position as an employer. With no contract, law, or collective bargaining, an employee might be dismissed for anything.  He further spoke of a recent situation in Lexington, Kentucky where a woman was fired from her position because she contemplated a divorce.  She did get a divorce and she was fired and she went through the court process.  The Appeals court ruled she could be fired for getting a divorce.  (EXHIBIT D).  Mr. Price stated in labor law it was illegal to fire someone because of race, national origin or sex.  That was all the protection available at this time.  He repeated a statement by a labor leader years ago; "Corporations invest their money and effort and employees invest their lives."  Mr. Price stated AB 343 was a moderate bill giving some protection, at least a show of cause for a firing.  He then read a letter from a constituent, who would remain anonymous, who took a petition to work and within two hours, obtained over 200 signatures in support of AB 343.  Mr. Price did not enter this letter and petition into the record because he did not want to subject the signers to being fired because they signed a petition.  He noted there were employees throughout the state who were unaware of how fragile their relationship with their employer really was.  There were certainly a lot more people not covered by contracts, union contracts, or personal contracts who were in a weak position. 

 

Mr. Frank Daykin, one of Nevada's commissioners on Uniform State Laws, stated the task of his organization was to draft preferably uniform, sometimes model, acts on subjects where it was felt the law would beneficially be uniform throughout the state.  This law was originally drafted as a uniform act and then, because some of the states felt they had stronger laws in place and some of the states wanted no laws in place at all, it was promulgated as a model act so any state wanting a law on the subject could take it up.  The commissioners did not ask every state in the union to adopt this particular act.  However, this act went through all the processes of the conference.  During this process, there was a great deal of compromise, trying to reconcile opposing points of view.  Reasonable cause was largely in the mind of the judge, Mr. Daykin acknowledged.  He further stated this bill was a reasonable medium between the extreme positions on both sides.  It did not go as far as some judicial decisions had; on the other hand, it considerably curtailed the doctrine of employment at will. 

 

Mr. Daykin proceeded to walk the committee members through AB 343, section by section. 

 

Mr. Ernaut asked Mr. Price about the right to quit.  He wondered, as a matter of fairness, should the bill include a good cause for quitting or allow the employer to go back on the employee.  Mr. Price answered he was unaware of any state or federal law with those implications.  Although Mr. Ernaut felt this situation created an aura of employers lurking around waiting to fire employees for their hair or eye color, Mr. Price asserted unjust firings occur all the time.  Mr. Ernaut reiterated his point of the potential of an employee quitting on a whimsical notion.  Mr. Price responded the impact of an employee quitting against an employee being fired was less severe to the quitting employee and employer.  It might be an inconvenience to the employer, yet it could be devastating to a fired employee.  Mr. Price did state the legislature had placed into law areas which were amenable to the employer.  He further stated the employer had as much access to the legislature and the law to protect their rights, possibly more so, as the employee.  Mr. Ernaut referred to Section 4 of AB 343 and wondered what the rationale was for excluding the state as an employer.  Mr. Daykin answered the reason was normally government employees had a civil service mechanism to protect them which was adapted to the governmental situation. To repeal all the civil service legislation in the various states would be too great a task.  That exclusion was made because those employees were already clearly covered.  Mr. Ernaut questioned "good cause" mentioned in Section 6 and the lack of documentation threshold.  Further discussion of "good cause" between Mr. Ernaut and Mr. Daykin ensued with the definition to be decided in arbitration.  Mr. Ernaut questioned the reasoning of a subjective law for a subjective situation.   He noted that was "bureaucracy."  Ms. Giunchigliani suggested to Mr. Ernaut people who quit might not if they had recourse; out of frustration, a sense of harassment or no place else to go, people chose to leave the job.

 

Mr. Bonaventura asked if this bill, with a $103,096 fiscal note, would go to the Ways and Means Committee.  Mr. Price responded the fiscal note was probably at the Labor Commission office; he had not seen it.  Mr. Bonaventura wondered if the Labor and Management Committee could pass the bill.  Mr. Price stated there were three ways it could be done:  1)  The bill could go to Ways and Means, or have it placed in the budget, 2) A fiscal appropriation could be added to it, or 3)  The Labor Commissioner could appear before committee and testify as to the costs.

 

Ms. Kenny asked Mr. Price the history of AB 343.  Mr. Price replied this was the first time this particular version had been introduced.  Ms. Kenny pointed out two sides to this bill.  She received several calls from constituents who had been fired at will and understood their plight; on the other hand, as a small business owner, she expressed a tremendous fear of restricted employer rights.  Ms. Kenny stated one employee could do an incredible amount of damage to a small business in a short period of time.  She expressed her ambiguous feelings on this issue, especially in reference to the small business owner and the large corporations, such as casinos.  Mr. Price gave a few examples of the firing of large corporation-union workers. Ms. Kenny asked Mr. Price if he would be willing to negotiate a compromise on the business size and he acquiesced.

 

Mr. Hettrick wondered how many states adopted this model law.  Mr. Daykin responded he was unaware of any state that had adopted this law as yet, and Nevada would lead the way if AB 343 passed.  Mr. Hettrick  questioned why an employee who worked less than 20 percent of full time would be covered.  Mr. Price replied there must be half a dozen different definitions of "part-time" in the Nevada Revised Statutes.  Mr. Hettrick further expressed dismay with vague wording in several sections and the open-endedness of the bill.  Mr. Price remarked when procedures and protections were on the books, situations would become less frequent.  Employers and employees might think more of the consequence of their actions with stronger legislation.  Mr. Hettrick said small employers would be especially hurt.  He also expressed problems with other sections of the bill.

 

Mr. Carpenter expressed his agreement with Ms. Kenny's and Mr. Hettrick's statements.  He further stated small businesses were being laden with more taxes, more regulations and further laws could hurt these small businesses.  Mr. Carpenter wanted to work out the situation fairly for both sides but felt this bill did not adequately accomplish that objective.

 

Mr. Collins supported Mr. Price by stating AB 343 was good legislation.

 

Mr. Regan asked Mr. Daykin to refer to page 6, "preponderance of evidence."  Mr. Daykin responded "preponderance of evidence" was the lowest standard prevailing in civil court.  He further explained the employer must produce more evidence than the employee could produce against him.

 

Mr. Knight Allen spoke on behalf of the Nevada Casino Dealers Association.  He stated his organization strongly supported AB 343 as produced by the Uniform Law Commission.  Mr. Allen stated working people of Nevada would get out from under the injustice of at-will employment.  Management would get many things; arbitration instead of litigation, caps on damages, and the elimination of pain and suffering awards and punitive damages.  Mr. Allen stated the Dealers Association thought AB 343 represented the perfect compromise.  Their organization was prepared to live with the benefits management would gain with this bill.  The working people of Nevada were asking for nothing other than a fair break.

 

Mr. Eddie Rivera, an advisor with the Nevada Casino Dealers Association, did the research for the association on this bill.  This bill had been in the making for five years.  He equated at- will employment with slavery.  Mr. Rivera stated the at-will law was unwritten, unethical and unbending.

 

Mr. Robert Ostrovsky, Nevada Resort Association, testified in opposition to AB 343 and read prepared testimony (EXHIBIT E).

He further stated the Employment Security Department (ESD) in calendar year 1992 held 11,100 hearings for employees at the first hearings level.  ESD forecast 14,000 such hearings in the next fiscal year.  Mr. Ostrovsky predicted the cost to the state could be over $22 million in appeals hearings if AB 343 became law.  He drew attention to the fact employees had rights under other provisions of the law; i.e., Equal Employment Opportunity Commission (EEOC), Occupational Safety and Health Administration (OSHA), Americans with Disabilities Act (ADA), Issues of Public Policy, Issues of Contract Dispute, ERISA, National Labor  Relations Act.  Mr. Ostrovsky summed up his testimony by urging the committee to take a hard look at this bill and realize all employers were not bad.

 

Mr. Collins asked Mr. Ostrovsky if an employment agreement would supersede this.  Mr. Ostrovsky had read the bill differently from Mr. Collins and Mr. Price.  Ms. Giunchigliani understood employment agreements would be exempted.  She asked Mr. Ostrovsky to define "good cause."  He answered within the gaming industry employee handbooks were used.  There was a small percentage of union contracts.  Mr. Ostrovsky stated many employers wanted to avoid unionization.  By establishing good policies and procedures and a good relationship with employees,  a company could avoid unionization.  Ms. Giunchigliani reiterated there was no definition per se for good cause within the industry.  She further noted employees and employers should get together and define "good cause."  A brief discussion between Ms. Giunchigliani and Mr. Ostrovsky was held.

 

Mr. Collins questioned the language referring to collective bargaining and Mr. Ostrovsky concurred it was difficult language to interpret.

 

Ms. Lynn Grandlund, due to lack of time, submitted her testimony as (EXHIBIT F) and was in agreement with Mr. Ostrovsky.

 

Mr. Sam McMullen expressed his opinion on the use of the word "slavery" in this testimony.  Slavery was forced labor and this bill related to gaining and keeping employees. He further noted this bill did not take good employers into consideration and there should be a requirement of exhaustion of remedies before arbitration.

 

Mr. Collins stated this bill was an encouragement for good employers and Mr. McMullen agreed, yet drew attention to the laws already in place.

 

Mr. Marty Bibb, National Federation of Independent Business, voiced opposition to AB 343 on his organization's behalf.  He stated the bill would be a particular burden on small businesses.  His organization thought it could be a disincentive to employers to provide regular full-time employment.  Ms. Giunchigliani stated the impact on the small business employer was duly noted, and she mentioned Mr. Price was open to compromise on the issue.  Ms. Giunchigliani said it was unjust for employers to put employees on 19 hour shifts so benefits would not have to be paid. She noted another concern she had was the increased number of cases filed.  Ms. Giunchigliani stated problems needed to be identified and some assistance provided through the state.  Mr. Bibb commented the average small business had three to five employees.

 

Mr. Ernaut concurred with Mr. Bibb's prediction of employers resorting to contractual employees in lieu of full-time employees.  Mr. Ernaut said if the legislation was passed as is, it could create the exact reverse situation.  Ms. Giunchigliani responded if an employee wanted to work, they would have some security. 

 

Ms. Bonnie James, of the Las Vegas Chamber of Commerce, stated her organization opposed AB 343.  She noted the smaller companies wanted to keep employees and worked hard to do so.

 

Additional written testimony was entered into the minutes as EXHIBIT G.

 

There was no action taken on AB 343.

 

Ms. Giunchigliani stated AB 466 would be rescheduled.

 

There being no further business to come before committee, the meeting was adjourned at 6:06 p.m.

 

      RESPECTFULLY SUBMITTED:

 

 

                             

      JUDY HANNA

      Committee Secretary

 

 

 

                               

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Assembly Committee on Labor and Management

April 29, 1993, 1993

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