SENATE COMMITTEE ON JUDICIARY

MINUTES OF THE

SENATE Committee on Judiciary

Seventy-First Session

April 4, 2001

The Senate Committee on Judiciarywas called to order by Chairman Mark A. James, at 8:30 a.m., on Wednesday, April 4, 2001, in Room 2149 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Senator Mark A. James, Chairman

Senator Jon C. Porter, Vice Chairman

Senator Mike McGinness

Senator Maurice Washington

Senator Dina Titus

Senator Valerie Wiener

Senator Terry Care

STAFF MEMBERS PRESENT:

Bradley A. Wilkinson, Committee Counsel

Allison Combs, Committee Policy Analyst

Carolyn Allfree, Committee Secretary

OTHERS PRESENT:

Kent F. Lauer, Lobbyist, Nevada Press Association

D. Taylor, Nevada Director, Culinary Workers Union

James Sala, Director of Organizing, Southwest Regional Council of Carpenters

Mark Stotik, Director, The Worker Rights Center, The Nevada Interfaith Council for Worker Justice

Terry Johnson, Labor Commissioner, Office of Labor Commissioner, Department of Business and Industry

Chairman James stated there were two bills on the agenda, but Senator Care had requested his bill, Senate Bill (S.B.) 398, not be heard because there is a duplicate bill in the assembly (Assembly Bill [A.B.] 227).

SENATE BILL 398: Revises provisions relating to settlement of certain claims or actions against governmental entities and officers and employees thereof. (BDR 3-1034)

ASSEMBLY BILL 277: Revises provisions relating to settlement of certain claims or actions against governmental entities and officers and employees thereof. (BDR 3-378)

Senator Care explained he was not aware a bill identical to S.B. 398 was being introduced in the Assembly. He said it reflected thinking much the same as his own; that is, taxpayers have a right to see the documents the state or a subdivision of the state enters into when settling a matter of litigation or a claim against it. Considering that the bills are word-for-word the same, he said, he will testify in support of A.B. 277, which is set for hearing April 10 in the Assembly Committee on Judiciary.

Chairman James opened the hearing on S.B. 411.

SENATE BILL 411: Enacts provisions governing confidentiality of certain information. (BDR 3-36)

Chairman James said he had requested S.B. 411, and it deals with something called “sunshine in litigation.” He explained it as follows:

Often private litigation will bring to light a public hazard that, whether it is in a product or some other defect or hazard, has the effect of endangering the public in its use . . . in some way in commerce. I think an important concept to understand is that we have a . . . tort system in this country that is designed to redress private harms with money damages and other remedies in the courts. But, in addition to redressing private harms, it is also designed to serve a public function, and that is why we . . . fund the courts and we have created a tort system that results in a safer society . . . The United States has safer products . . . because there is liability for putting unsafe products or creating other unsafe conditions into the stream of commerce. The notion that the public should be informed when private litigation reveals a public hazard is predicated on the notion that the courts are there not only to serve the interests of the specific litigants in their . . . dispute, but also that the judiciary has a public function for the rest of the people who are not litigants . . . This legislation would ensure, if there is a hazard, rather than letting it lie latent after it has already been exposed by litigation, that hazard not be sequestered or secured in a private settlement agreement, but that it remain there in the court and available for others to find out about . . .

Chairman James continued:

In the interim [period between legislative sessions], something else came to my attention from some constituents and others whom I talk to pretty frequently . . . We have a situation that needs to be addressed in this bill regarding disputes that arise and violations of the law that occur concerning our labor laws. The reason I included it in this bill is because it is really the same kind of a sunshine in litigation issue . . . There was a contractor in Las Vegas who was utilizing the services of . . . union and nonunion . . . laborers on public projects where it is required by this Legislature that they pay a prevailing wage . . . This particular contractor would hire individuals . . . would pay them the prevailing wage and then . . . require them to kick that money back to the company. This came to light . . . and a complaint was taken to our Labor Commissioner . . . That action was settled in a settlement agreement with the Labor Commissioner that was sealed; and it is my understanding the proceedings themselves took place behind closed doors, without the access of the press and without, again, the public function being carried on . . . If it is concealed in a private agreement with the . . . entity that is supposed to be regulating and protecting the members of the public, especially those who are working in these jobs, then the public part of that function has completely been defeated.

So, what the bill does is require there not to be that kind of confidentiality, and requires these kinds of settlements be open to the public . . . Other public entities who are going to be receiving bids . . . would, I think, want to know if someone bidding or coming before them has engaged in what is completely an illegal practice . . .

I understand in the past there has been some controversy in trying to enact this kind of legislation. It is important to recognize that this is not intended to gore anybody’s ox; this is intended to make the system work the way it was supposed to work. That is, that it provides a benefit for the public, for the state. Neither the courts nor the Labor Commissioner was designed to be private arbiters of disputes . . . We have Chapter 38 of our statutes as an arbitration act . . . and you can hire a private arbitrator and enter into whatever relationship you want with the other party. The result of that . . . is not subject to these kinds of scrutiny. But, if you are utilizing the courts and, certainly, if there is a complaint filed and the Labor Commissioner takes action, these are the kinds of things that demand the public . . . be informed and there be sunshine.

Kent F. Lauer, Lobbyist, Nevada Press Association, distributed a USA Today article (Exhibit C) that he said speaks about this issue. He read the following from the article:

Behind closed doors, Firestone year after year agreed to pay plaintiffs millions of dollars to settle cases and thereby hush up its tire problems. In dozens of cases, the courts made it illegal for anyone to divulge the financial terms of the settlements and possible evidence about safety defects that are allegedly hurting or killing people.

“That is really what this bill is all about,” Mr. Lauer said. Firestone entered into secret, confidential settlements, he said, so nobody knew about the tire defect for years. Mr. Lauer said the Nevada Press Association represents 40 newspapers and supports S.B. 411. He said if this bill passes Nevada would join a number of other states that have enacted laws or court rules limiting or prohibiting court settlements that conceal a public hazard. “You may hear arguments from opponents that allowing private parties to enter into confidential settlements helps promote settlements, thereby avoiding costly trials and clogged court dockets; that confidentiality helps prevent frivolous litigation; and confidentiality should be left to the parties in a private civil dispute,” he said. But those arguments cannot overcome the primary reason for this bill, which is public safety, he contended. “Don’t members of the public have a right to know if something could harm them or kill them, especially when that information is revealed through the public court system?” he asked. When the public’s safety and health are at stake, the right to settle a suit confidentially should not be placed above the public’s need to known, he said.

Senator Care asked Mr. Lauer what would happen in the case of contaminants on private property. He said, although a hazard might not be in the mainstream of commerce, it still might constitute a public hazard if someone were to trespass onto private property. Mr. Lauer said he thought it would come under the bill if it did, indeed, affect the public. “But you are right,” he said, “most of the . . . examples involve product liability.” Senator Care surmised an abandoned mine on private property might be regarded as a public hazard if it were possible for the public to stray onto the property.

Chairman James distributed printed information from research done by committee staff (Exhibit D). He prefaced his remarks by noting similar legislation has already been adopted in 16 states, “including our neighbors, California, Oregon, Idaho, and Washington.” Other states are Texas, New York, Florida, Virginia, and Michigan. He said this legislation would apply to workplace hazards, automobile hazards, product hazards involving children, health care industry hazards with respect to drugs, and environmental hazards, such as Senator Care mentioned. He gave the following examples of the type of hazard that would be covered:

The Xerox plant in Rochester, New York, was a major user of toxic chemicals for years, when two families who lived nearby filed lawsuits claiming that the improper release of the chemicals in the plant had injured them. The family settled its claim with Xerox in 1988, but agreed to seal the settlement. Public health
departments then sued to gain access to the files to determine if other families were at risk. Instead of allowing public officials to review the documents, which had been produced in a public forum, Xerox fought to keep the court records sealed. When the public officials prevailed and won the right to review the materials, they learned that Xerox had been playing a shell game all along. As part of the settlement, the documents were not even included in the court records . . .

Just recently BP Amoco [p.l.c.] has settled claims that workers at its Naperville Research Facility contracted a rare form of brain cancer from an unknown toxin at the facility. The deaths have mystified health officials for years. In the Fall of 1999, health experts working under contract with BP Amoco determined that the cancers were likely caused by occupational exposure. But BP Amoco officials have declined to explain what those exposures could be. If the settlements are sealed . . . other workers at the same facility, some of whom have already developed tumors, could not review the records to help measure their own health risk . . . Also, outside researchers could not review the records to determine if, and under what circumstances, workers at other facilities could face a similar threat.

Chairman James continued:

It seems that this is one of the most insidious manifestations of this kind of thing, for a court to participate in activity whereby a hazard is exposed to people who are going to work every day in it, and we, as a legislature, in funding the courts, and the courts, as some sort of a justification of encouraging a settlement, which is a paltry justification in the face of this kind of danger, participate in sealing that kind of information so other workers who are going there every day do not know what that is. I think people who go to work every day have the right to know what sort of latent conditions might be affecting their health and well-being . . .

People go to work knowing that working as a roughneck on an oil rig is a dangerous job, and they take that risk and they receive commensurate rewards . . . Those jobs are well paid. If people are undergoing the same kinds of risks, but it is through latent kinds of risks, not only is it wrong from a moral standpoint and from a public policy standpoint, it is wrong from an economic standpoint. If people are going to go ahead willingly and take risks associated with a job, then certainly they should be compensated . . . Keeping this information away from them is keeping away information that is critical to the benefit of that employment bargain . . . So, that is another way this issue becomes a public policy issue and an issue for us whose job it is to protect all of our constituents . . . The same goes for the toys we buy for our kids, the health care we obtain for ourselves and our loved ones . . .

Senator Care said, “The scenarios are too many to enumerate, but with 16 jurisdictions, I think it is safe to say there is enough case law . . . to guide any court in determining . . . what constitutes a public hazard.” He asked what happens in the case where there is no lawsuit, only the threat of a lawsuit, and the parties enter into a settlement agreement. Chairman James answered the bill defines an order or a judgment of a court that has the effect of concealing a public hazard. “No one can prevent, in freedom of contract, anybody from entering into whatever kind of confidentiality agreement he or she wishes, in a settlement,” he said. If one filed for an injunction against the other for breaching the agreement, it would be a separate cause of action.

Bradley A. Wilkinson, Committee Counsel, said subsection 2 of section 8 addresses that issue. It says, “Any person who is substantially affected by an agreement or a contract . . . has standing to contest [it] . . . by bringing an action for declaratory judgment . . .” Mr. Wilkinson said the language does not require there be an action pending. He said it would be likely there would be an action pending before there was necessity for an agreement, however. Chairman James said the committee would work through that, but the sunshine in litigation law deals with a court’s being asked to protect a settlement agreement in a matter that has been brought to litigation. He said there is some apparent confusion in some members of the public, who say this is a matter of private litigation. “That is an oxymoron,” he said, “if you are . . . utilizing the courts to resolve your dispute. The courts have the function of resolving disputes between private parties; the parties are the ones that are private,” he said, “but they also have the function of serving the public weal.”

Senator Wiener observed this is really a layered issue. With the worker who goes in unknowingly with the presumption of safety, there is a direct impact to the community, she stated. “You have an immediate impact that could arise . . . you could have a cumulative impact of something that recurs . . . If it is going to have an impact on an environment, it also may spread beyond to those who are truly unknowing,” she said.

Senator McGinness inquired about section 9, subsection 2, regarding protected information, and asked if that meant a person who feels certain information is confidential could go into court to stop the release of the information. Chairman James said the section is an attempt to not have this law “completely blow away” statutory and common law protection of trade secrets and economically and commercially protectable interests. Senator McGinness said he was thinking about the situation wherein people file a lawsuit hoping to gain even small amounts, $15,000 to $20,000, even though they know there are no grounds, in the hope the defendant will settle because it would cost more to go to court. He said he wondered if there were some protection there, and Chairman James said he did not think this particular section addressed that kind of issue; he pointed to the definition of protected information in section 5, which must have a statutory grounding. Chairman James said the policy behind the bill is a “two-edged sword.” He said there are companies that simply do not settle lawsuits; they pay only if someone can show in court that they are wrong. Senator James continued:

Under some circumstances, there may be fewer settlements because people will know they will be public . . . On the other hand, the benefit we gain from knowing where hazards are . . . outweighs that . . . We hear on this committee a lot about tort reform; and, whenever we hear about tort reform . . . we have people come in [with] anecdotal evidence about . . . frivolous lawsuits. Nobody wants frivolous lawsuits, which is why this committee sponsored a bill, which is the Attorney Responsibility Act, in 1995, which allows the court to sanction, specifically, a lawyer for bringing a frivolous claim or defense . . . I think a law like this is going to discourage those.

Senator Care said he understands this bill to mean if a third party, such as a private citizen or a member of the press, thinks there is information that ought to be divulged, that party may petition the court; then the affected parties, before they reveal anything, may file a motion for a protective order. Mr. Lauer said the bill just prohibits the concealment of a public hazard or information concerning a public hazard, and the information that is not related to a public hazard is not affected by the bill. Chairman James added, “A public hazard is an instrumentality, device, person, procedure, product, or condition that has caused, or is likely to cause, injury.” He said, under that formulation, a singular act of negligence by an individual would not be regarded as the concealment of a public hazard. A case where somebody made a practice of putting unsafe operators of carriers on the roadways, for example, would constitute concealment of a public hazard, he said.

Senator Titus referred to a similar bill she introduced in 1991 that would have prohibited certain actions by a court and made void provisions of a contract to conceal a public hazard. She said it was meritorious then, it is meritorious now, and she asked if there is a particular reason it is being brought up again now. Mr. Lauer said the Nevada Press Association asked that the bill be introduced because it is important that dangers to public safety and health not be concealed in court records. “It is a basic public policy issue,” he said.

Chairman James commented Senator Titus’s bill was brought in response to an incident that occurred in Nevada, and that was good. But, he said, there is a whole host of things across the country, and this bill is being proposed at this time as appropriate public policy.

Senator Wiener asked if there might be any gray area, “where you are looking at public hazard versus attractive nuisance. Would that be tough to distinguish, in some circumstances?” she asked.

Chairman James said he thinks an attractive nuisance could be a public hazard. The reason for the nuisance statute is to provide for injunctive remedy predicated on the abatement of the nuisance, and for the ability to sue based upon injury created by the nuisance, he said. “You could have an attractive nuisance and a settlement that should not be confidential,” he added.

D. Taylor, Concerned Citizen, Nevada Director, Culinary Workers Union, said he fully supports S.B. 411. He said the bill seeks to make public any settlement entered into by the Nevada Labor Commissioner with employers who have allegedly violated state labor laws. He made the following statement:

We became interested in this issue when a couple of big cases involving abuses of Latino construction workers were settled with confidentiality clauses. Some of these same workers had relatives who were in our membership, and they came to us about this. Some of the abuses that were alleged were things like kick-backs . . . Because of these essentially gag clauses, companies that violate state law are not publicly accountable for their actions . . . In fact, in construction, public entities continue to award very lucrative jobs to law-breaking employers because they cannot find out the results of investigations . . . Not only do public bodies and citizens have a right to know what their contractors do on public jobs with public money, but we also believe that the hush-hush of these deals essentially encourages abusive employers to continue doing what they think they can get away with . . . Further, all of this has the effect of keeping workers in the dark, as well . . .

If you drive by any home construction site, you will see a largely Latino workforce . . . It is not a stretch that a lot of these abuses occur to these . . . workers . . . Forty-eight percent of our membership is either Latino, Asian, or Bosnian; that percentage will continue to grow. We are quite worried about the abuse growing . . . We strongly feel that people . . . should have the tools to enforce state laws. One of those tools is the ability to know which employers break the law . . . We think, by enacting this bill, there will be one less way to sweep the abuse of workers under the rug and one more way to encourage all employers to play by the rules.

James Sala, Concerned Citizen, Director of Organizing, Southwest Regional Council of Carpenters, said he is here not so much to represent the members of his organization, but to speak for those who do not have the benefit of that representation. He said this testimony is not meant to reflect on the Labor Commissioner; this bill is meant to close loopholes employers and their attorneys utilize to press for settlement of cases that would otherwise be dragged out, increasing the backlog and burden on the Labor Commissioner’s office. He described examples of repeat violators of the state’s labor laws who were able to enter into settlement agreements with confidentiality clauses (Exhibit E), as follows:

The first is Keith Marris Paint & Drywall, someone who is a drywall subcontractor in construction, has worked on school projects, and has over the course of time been repeatedly found to violate not just the prevailing wage laws, but overtime laws [and] sometimes minimum wage laws. In this last scenario, he owed 12 workers in the neighborhood of around $50,000 that we were able to document . . . At the end of the settlement, these workers got about $26,765 split up between them as part of the settlement . . . In paragraph 9 [of the settlement agreement], it says, specifically, the Labor Commissioner “will not take any criminal or civil action against the Respondent regarding the charges displayed with the notice of violation in the above referenced case . . . which includes not reporting these alleged violations to the State Contractors Board,” which is, specifically in the statutes, the duty of the Labor Commissioner to report those violations . . . A contractor like this . . . would ordinarily have to post a bond so that money is available for the workers to collect their money, [but this contractor] never had to go before the contractors board, never had to post a bond . . . and is now active back in bidding work. The way he did this is, he paid these guys cash, no checks, no workers’ comp, no social security, no overtime. When the workers filed the complaint, not only did he send the foreman to some of their homes to threaten them personally, but he forged documents for the Labor Commissioner’s office that said . . . “We really did not mean to file these complaints; we were mistaken; we did not get cheated.” To the Labor Commissioner’s credit, he sent one of his field investigators out . . . and found out these documents were falsified, and they ended up with a settlement agreement . . . Workers who do not feel like they have the ability to make their argument in the system get exploited repeatedly.

Mr. Sala continued:

The second case is with Jetstream Construction, and this was a much bigger case and more complicated . . . [and] involved prevailing wage violations on numerous schools, but primarily in the form of [paying] them the right rate on the check [but requiring] them to kick back money . . . to the tune of $200 to $250 a week . . . Their [Jetstream’s] attorney . . . if he does not get a settlement agreement, he ties up the Labor Commissioner’s decisions in district court, he appeals over and over again, he gets injunctions, and that is what really moves the Labor Commissioner toward settlement . . . We think [settlement] is a good vehicle to get these workers their money, but we just want to make sure it is not hidden . . . As part of the settlement . . . there were a lot of clauses . . . that basically waived the right of all of these workers to file any other complaints, waived the right of them to bring this out into public or to speak about this settlement in public . . . None of the workers saw this document, nor was it ever done in Spanish, which is their primary language; so, they had no idea what was going on when they received the money in this settlement . . .

Mr. Sala added:

The probably most egregious part of this thing, for us, was in paragraph IV, [where] it specifically states: “The Commissioner and claimants further agree that if the confidentiality of this agreement is violated the person or entity so violating . . . shall indemnify Jetstream for all damage as well as for the payment of attorney’s fees and costs . . . based upon, or in connection with, the initiating of any action in giving or releasing this information to any other entity, including the Clark County Board of School Trustees . . . with the exception of providing that response set forth in Paragraph 13 . . .“ The reason that is important is, everyone in this process knew the school district was in the process of reviewing this subcontractor for qualification for school district projects . . . and they were specifically waiting to hear the Labor Commissioner’s decision . . . Paragraph 13, that is referenced, says, “That although normally the Commissioner’s files and documents in this matter are open to the public, including this Agreement, the Parties agree this Agreement shall not be maintained in those public files, and no formal or informal release shall be initiated by the Labor Commissioner of all or part of this
agreement, either in writing or orally, to anybody or any entity other than when questioned about this matter, the stock response shall be: ‘A resolution has been achieved to the satisfaction of all parties.’”

The Labor Commissioner should still be able to do settlement agreements, Mr. Sala said, but the settlement agreements should be kept in the public light. He said 90 percent of the Labor Commissioner’s problems are caused by 20 percent of the violators, and if they are brought out into the light of day, the backlog will start to recede.

Senator Porter said what he seems to be hearing is there is no way for anybody to know of any of the charges or settlements that have taken place on a repeated basis by these businesses. Mr. Sala responded, saying the Labor Commissioner does try to share information regarding contractors who are debarred, but settlement agreements try to limit this with the contractors board, the school district, the City of Las Vegas, and the Clark County General Services office, which lets a lot of construction. Senator Porter responded, saying he believes there is a communication system, and these officials do know. Mr. Sala acknowledged they do know, and said:

The way the competitive bid laws are structured on public works . . . it is the lowest dollar and, while most of the general contractors . . . are fairly reputable . . . it is the subcontractors who are not really subject to that pre-qualification and who do not really see the light of day. If one drywall contractor is $100,000 low, then the other general contractors feel compelled to use him, otherwise [they] lose the bid . . . If they do not know what is going on, [they] cannot take action. Most of them are willing to take action . . . if they know about it.

Senator Porter asked if local government knows who the subcontractors are, when it lets contracts. Mr. Sala answered it does on any bids over 1 percent of the value of the contract. Senator Porter said a good question is, “Who is watching the henhouse?”

Mark Stotik, Concerned Citizen, Director, The Worker Rights Center, The Nevada Interfaith Council for Worker Justice, spoke in support of S.B. 411. He said his organization first became involved in the issue of concealed settlements
when it tried to help the Jetstream workers resolve their complaints and have Jetstream disqualified from doing work for the school board. He said government should not be used to shield companies that engage in wrong-doing. It is important to not let workers who already feel alienated feel they have done something wrong when they file complaints, he said.

Senator Care asked if the criminal prosecution could be waived in this kind of litigation, where the civil action is settled. Mr. Sala said that was discussed with the Attorney General, and a criminal case had never been prosecuted in conjunction with a civil case handled by the Labor Commissioner; nobody knew how to do it. He said the Attorney General has the authority, and the carpenters union would like to see the criminal case prosecuted. In most of the civil cases, the defendants want to avoid any further litigation and not admit guilt. “It is pretty standard language in the settlement agreements,” he stated.

Terry Johnson, Labor Commissioner, Office of Labor Commissioner, Nevada Department of Business and Industry, said last year in the state of Nevada $1.8 billion was spent on public works projects, and “we do a miserable job of overseeing that.” He said he thinks contractors who come into Nevada have little or no respect for the laws, they know their chances of being detected are not very high, “they also know that their resources typically can outgun the resources of the State of Nevada . . . And, I have to say, the big picture is that public works in the state of Nevada is a mess, and this [bill], while an important component, does not come close to addressing the real issue, the big issue of enforcement.”

Chairman James stated:

What we talked about earlier . . . the general litigation portion of the bill, the notion that lawsuits that are brought between private parties often enforce a public interest . . . D. Taylor . . . asked me, “Can’t we have a law in Nevada that private parties can sue . . . based upon violations of the labor laws?” His intention was . . . as a public entity, you do not have the resources to ferret out all these things and to enforce them all, and that private litigation can help enforce the statutes. There is not that ability in Nevada.

Senator James asked Mr. Johnson to comment.

Mr. Johnson said it is something that needs to be discussed. He said sometimes people come to him with wage claims that are difficult to substantiate, and he does not personally conduct investigations. He stated the following:

Sometimes you are faced with issues where, in your gut, you strongly suspect a violation may have taken place, but . . . [it] is not always synonymous with what the evidence will support . . . When we came on board . . . a little over a year ago, we inherited an agency that had a 3-year backlog in wage claims, private sector wage claims, especially . . . It would take the whole session to talk about public works . . . Just in private wage claims, the person is not even making the prevailing wage; we are talking about people not making a $5.00 minimum wage . . . Sometimes you are torn between wanting to pursue matters to the fullest . . . and you have a person standing at your counter saying, “I had to move my family into my car because I could not get my final paycheck.” . . . You are just not going to please everyone every time. It is difficult to craft legislation that would do that; it is difficult to engage in public policy that would do that . . .

I do not have any answer for you or an opinion, even, to offer at this point on whether workers should be able to pursue a private right of action; but, it is something we need to discuss so that we . . . determine whether multiple avenues should be made available; or does the Labor Commissioner need to make a decision on every single matter, because not every item that comes before you is valid and enforceable in the courts. We have people that walk in and file an $80,000 wage claim. You go through it, you do the investigation, you do the audit, you get down to the paperwork, you peel that onion back to the core, you find out this person is owed 50 bucks, if that . . .

Mr. Johnson continued:

I hope as we move forward with the discussion here we do not presume that, because someone necessarily entered into a settlement agreement, they violated the law . . . particularly willfully, intentionally violated the law . . . I also hope there is some discussion as to how we are going to discuss confidentiality across the board. If it is something we want to move forward as a state, maybe we should talk about addressing some provisions in the Administrative Procedures Act, Chapter 233B, that addresses all state agencies . . . I can give you now about 12 to 15 different sections of current Nevada law that apply to regulatory agencies that contain confidentiality provisions in their statutes . . . Unless there is a finding . . . NRS 632.405 [states] . . . the records are confidential, unless (a) there is disciplinary action imposed . . . as a result of their investigation, or (b) the person regarding whom the investigation was made submits a written request to the board asking that the information and the records be made public. That is a general theme in Nevada law . . .

Let us talk about how over 100 different sections of the Nevada Revised Statutes today contain confidentiality provisions applicable to state agencies. Do not single out the Labor Commissioner. We are certainly doing our best to get workers reconnected with the money that is due and owing them, but let us have a general discussion on these matters, and especially on public works . . . Public agencies have a duty to ensure that the terms of their public works contracts are met . . . There is nothing that stops a public body from imposing the will of this body upon contractors that they do business with, and they need to step up to the plate. You are not going to get $1.8 billion worth of enforcement out a 20‑person state agency, the Labor Commissioner’s office.

Chairman James told Mr. Johnson he had raised a number of important issues. He said he knows, in some cases, a person must exhaust administrative remedies before going to court on a private cause of action and, with respect to
alleged violations of the labor law, a person is limited to the remedy with the Labor Commissioner; then it is up to the Labor Commissioner whether to go any further. He asked Mr. Johnson if his agency is under the APA (Administrative Procedures Act), and Mr. Johnson said it is, and that the APA is a general guide and does not supersede specific regulations applicable to an agency. Within his agency, he said, a decision entered by the Labor Commissioner has the force and effect of law and can be appealed to the district court, and the court may order a trial de novo. Chairman James added that there is a “litany” of agencies exempt from the APA, and that is something to consider. He told Mr. Johnson nothing in S.B. 411 would prevent putting into a settlement agreement that both parties deny liability, and there is nothing governing the content of the agreement. Senator James commented:

You raise a good point about the public agency that has bid this contract out and should be overseeing it; but, the mechanism we have for enforcement of the labor laws at the state level is the Labor Commissioner . . . The notion behind the bill is that kind of proceeding needs to be public in all respects, so the agencies, themselves, other interested parties, and anyone else who is concerned . . . can have knowledge of what the proceedings are and what the results are . . . Nobody is requiring anybody to admit guilt . . . And, I do not hear you opposing that, just raising some issues that are attendant thereto.

Mr. Johnson said he is not here to outright oppose the legislation, but just wants to see some broader issues discussed as opposed to the narrow focus on one state regulatory agency. Chairman James said this may engender that discussion, but he pointed out there are some jurisdictional limits on committees.

Senator Care, referring to section 8 of S.B. 411, said he wanted to clarify no special standing was being conferred upon the press. He said under the United States Constitution a member of the press enjoys no more constitutional rights than the average citizen. Perhaps during the work session on the bill, he would suggest, under section 8, subsection 1, it be made clear that anybody can seek an order for disclosure of a judgment.

Chairman James closed the hearing on S.B. 411. There being no further business, the meeting was adjourned at 10:11 a.m.

RESPECTFULLY SUBMITTED:

Carolyn Allfree,

Committee Secretary

APPROVED BY:

Senator Mark A. James, Chairman

DATE: