Partnership for Working Families

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Marianna Burke
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4 T--\C Partnership for Working Families June 27, 2017 Mayor Sam Liccardo San Jose City Council 200 East Santa Clara Street San Jose, CA RE: Opposition to Proposed Settlement between the City of San Jose and Allied Waste Services, July 27, 2017 Council Agenda Item 7.1(a) Honorable Mayor and Councilmembers: I write on behalf of the Partnership for Working Families to voice our strong opposition to the proposed settlement between the City and Allied Waste Services ("Allied") purporting to resolve the issue of Allied s noncompliance with its obligations to ensure payment of living wages to recycling workers under the Franchise Agreement between Allied and the City. The proposed settlement shortchanges San Jose workers and taxpayers and sets an incredibly dangerous precedent for the City's approach to a critical issue for workers throughout the region. The Partnership for Working Families ("PWF") is a national network of seventeen regional affiliate organizations that support innovative solutions to the nation's economic and environmental problems. PWF provides original research, advocacy, legal support, and strategic communications to its affiliates and allies, who advance policies at the city, state, and federal level that improve lives and create quality jobs and healthy, sustainable, and democratic communities. Through our work in cities across the country, we have seen up close the now welldocumented phenomenon of companies avoiding obligations to provide decent wages, benefits and working conditions through subcontracting. In industries such as waste and recycling, which are among the most dangerous and difficult for workers, the use of subcontracting to avoid such obligations is particularly nefarious and harmful. In the case before you, the City has taken the proper initial steps through the terms of the Franchise Agreement to ensure that Allied could not skirt its obligations under the City s Living Wage Ordinance through subcontracting arrangements. But those steps, and the City s leadership on this important issue, will be meaningless if the City does not aggressively enforce the contractual obligations it established in the Franchise Agreement to protect workers Harrison St, Suite 150, Oakland, CA (510) ForWorkingFamilies.org

5 The proposed settlement is particularly galling because (1) the amount of restitution paid to workers falls far short of the amount that that the City unequivocally and properly determined was owed to the workers and (2) it obligates the city to use taxpayer funds to subsidize a wage increase for a company that, under the Franchise Agreement, owes the City damages that some calculate as running in to the tens of millions of dollars for failure to properly pay the living wages that the company owed to workers. We therefore urge you to reject the proposed settlement in its current form and pursue a new agreement that better respects workers and taxpayers and establishes a strong precedent of zero tolerance for companies that seek to contract out of their obligations to pay living wages. Sincerely Nikki Fortunato Bas Executive Director 2

6 June 27, 2017 Mayor Sam Liccardo San Jose City Council 200 East Santa Clara Street San Jose, CA RE: Proposed settlement between the City of San Jose and Republic Services (Item 7.1A on the agenda) Dear Mayor and Council, On behalf of the National Employment Law Project (NELP), I write to express our serious concerns with the proposed settlement between the City of San Jose and Republic Services (Item 7.1A on your agenda for Tuesday, June 27, 2017). It is a deeply disappointing settlement that is bad for workers and taxpayers with state and national level implications. NELP is a national non-profit research and advocacy organization with over 45 years of experience advancing the labor and employment rights of workers across the country, and over 15 years of advocacy in California on behalf of low-wage workers, immigrant workers, and people locked out of employment opportunities. NELP fights for policies to create good jobs, expand access to work, and strengthen protections and support for low-wage workers and the unemployed. In May 2014, NELP released the report Who s the Boss: Restoring Accountability for Labor Standards in Outsourced Work and highlighted the scope and characteristics of companies decisions to outsource or use related structures in a variety of high-growth and lower-wage sectors that result in poor working conditions, with no accountability on the part of those companies. It describes how this lack of responsibility in the face of complex supply chains, multi-tiered business arrangements, and inaccurate job labels harms workers, law-abiding employers, and the economy overall. It details the culture of non-compliance that has emerged in many of our economy s largest and fastest-growing sectors, as firms encourage intense low-bid competition by subcontractors, evade unions, and skirt baseline labor and employment standards. What we see has happened at Republic and now through this proposed settlement, underscores the deep challenges workers face every day, which we highlighted in our report, and which informs our strong opposition to what is currently being proposed. NELP supported AB1897 in 2014 because of its promise to ensure that companies cannot contract out their responsibility to pay lawful wages, carry workers compensation coverage and protect workers health and safety on the job. Major companies are increasingly separating themselves from the workers who produce and move their goods, or provide vital services core to their business, by inserting labor intermediaries like staffing agencies,

7 franchisees, and other subcontractors, who they name as the employers of these workers, into their business plan. NELP continues to work with allies to ensure accountability by lead companies that structure their businesses without responsibility for their workers. We are concerned that the proposed settlement would indicate that the City of San Jose is taking a step backward and moving out of sync with state laws, and also sending a signal to other companies that they can use subcontracting to avoid responsibility to workers. At stake in this case today is the question of whether tens of thousands of San Jose workers will be able to earn enough to meet their basic needs. We urge the City to live up to its leadership role in promoting livable wages and ensuring that City money would not be spent with companies that exploit workers. San Jose recognized that the right to a fair and decent wage could too easily be subverted through subcontracting arrangements. We strongly encourage you to send your negotiators back to the table to find a settlement that preserves the City s commitment to workers and the Living Wage Ordinance. Sincerely, Nayantara Mehta Senior Staff Attorney

9 s\z7_ "M MALLIED WASTE August 21, 2017 Mayor Sam Liccardo and City Councilmembers 200 E Santa Clara St. San Jose, CA Mayor Liccardo and City Councilmembers, I am writing on behalf of Allied Waste Services to request your approval of the City Attorney s recommendation to adopt the mediated settlement of the contract dispute regarding interpretation of Allied s commercial solid waste franchise with the City of San Jose. The dispute relates to whether BFI and its subcontractor, Leadpoint, an independent, third-party company that provides recycling services at the Newby Island Recyclery, must pay some of Leadpoint s workers the San Jose Living Wage under the terms of the franchise agreement. We ask that you consider the following: The proposed settlement was reached with the assistance of retired Judge Jamie Jacobs-May, who serves as a mediator at the Judicial Arbitration and Mediation Service in San Jose. Prior to that, she served 26 years as a Santa Clara County Superior Court Judge, and was Presiding Judge. Prior to her elevation to the bench, Judge Jacobs-May served as Deputy County Counsel for Santa Clara County. She is experienced and extremely adept in resolving government contract disputes. The proposed settlement was developed by Judge Jacobs-May after almost a full year of mediation between City and Allied representatives. Judge Jacobs May carefully studied the contract and considered the positions of all parties and was cognizant of the Living Wage Policy and political implications of the settlement. The Living Wage is a formally adopted City Policy which exempts companies that provide services to city residents or businesses under a franchise agreement with the City. The Policy also exempts regional facilities that provide services to other cities. Therefore, Allied is providing services under a franchise agreement that is exempt under the Policy and the Recyclery at Newby Island is an exempt regional facility under the Policy. The dispute is not about the Policy but strictly about how the terms of the Franchise Agreement should be interpreted. The Franchise Agreement between the City and Allied provides for an annual adjustment of Recyclery costs based solely on a percentage of CPI. Historcially, the San Jose Living Wage has increased far more than the CPI. The Franchise Agreement allows for an adjustment in Allied s rates 1601 Dixon Landing Road Milpitas, CA / FAX

10 ALLIED WASTE for it s labor costs for its union collection workers and mechanics every few years, but allows for no adjustment for San Jose Living Wage costs for Recyclery workers for the entire 12 year term of the agreement because the agreement did not require that any of the Recyclery Workers be paid the Living Wage. In recognition that BFI s / Leadpoint s employees frequently switch between working on San Jose waste and waste from other jurisdictions, Judge Jacobs-May s recommendation is to treat all Leadpoint s employees the same by raising all of their wages and granting all of them a retroactive payment. The Judge s recommendation extends the scope of San Jose s Living Wage policy by increasing the wages of workers directly working on an exempt franchise contract, who work at an exempt regional facility, and who do not work for Allied. The resolution of this dispute does not create any precedents to the Living Wage Policy, nor does it create any alternate tiers to the Policy, because the contractual relationship between Allied and the City is governed by the Franchise Agreement. The language of each franchise agreement into which the City enters is unique Whether BFI / Leadpoint is required to bargain with its employees is a matter for the NLRB and courts to decide. If the proposed settlement is rejected and the parties go to court, a final decision would be three to four years in the future, considering the likelihood of appeals, versus this settlement that has all employees receiving an immediate benefit. The proposed settlement presented for your consideration and approval represents years of good faith negotiations between the parties with the assistance of an experienced mediator. We believe it does not set a precedent or undermine current City policy, puts workers first and provides a fair, equitable and timely resolution of this issue. Thank you for your consideration. Respectfully, Evan E. Boyd General Manager cc: City Clerk 2

11 8/22/2017 Honorable Mayor Liccardo and Members of the City Council City of San Jose 200 East Santa Clara Street, 18th Floor San Jose, CA Dear Mayor Liccardo, Vice-Mayor Carrasco, and Councilmembers Arenas, Davis, Diep, Jimenez, Jones, Peralez, Nguyen, Rocha, and Khamis: Re: Item 7.1 on the August 22, 2017 Council Agenda On behalf of Working Partnerships USA, a community-labor coalition and policy research organization working to build a Silicon Valley economy that works for everyone, I encourage the City Council to support the recommendations in the August 18 th, 2017 memo 1 from Councilmembers Don Rocha, Raul Peralez, and Sergio Jimenez. We believe these actions are essential to both mitigating any damage to the City s Living Wage Policy caused by the dispute with Republic and protecting the rights of workers on in the City s commercial and residential waste contracts moving forward. The City of San Jose has been a national leader in developing public policies to protect workers. From passing one of the first and subsequently the among the strongest municipal minimum wages, to becoming the first City in the Country to guarantee part time workers access to hours, the City has been on the frontlines of addressing the rise of low wages and contingent work. This is why it is so critical that we protect the City s Living Wage Policy going forward and not let the dispute with Republic and the deeply flawed proposed settlement disrupt one of our most important tools for lifting job standards of workers and their families across San Jose. The City of San Jose needs to send a clear message that it intends to fully enforce its Living Wage Policy and that it expects its contractors to respect federal, state and local law regarding the rights of workers around wage standards and ensuring a voice on the job. The recommendations in the August 18 th memo detail key steps to ensure our waste contracts include strong labor standards and extend these standards to every worker involved in handling San Jose s waste. By revising the thresholds of whom would be covered by the Living Wage for waste contracts to include all workers involved in handling San Jose waste we can overcome challenges of companies working regionally excluding their workers from the Living Wage. By taking these steps we can close the loopholes that Republic was able to take 1 Councilmembers Rocha, Peralez, and Jimenez. Living Wage Standards for Garbage Contracts, August 18 th, Available at

advantage of and ensure we are supporting family supporting, quality jobs going forward and ensure San Jose working families hard earned tax dollars go to business that respect labor rights

12 advantage of and ensure we are supporting family supporting, quality jobs going forward and ensure San Jose working families hard earned tax dollars go to business that respect labor rights and treat their workers fairly. In closing we hope you will support the recommendations in the August 18 th memo. Regards, Jeffrey Buchanan Director of Public Policy Working Partnerships USA

SAN JOSE CAPITAL OF SILICON VALLEY

Council Agenda: April 11, 2017 Item No: 2.3 CITY OF CR SAN JOSE CAPITAL OF SILICON VALLEY MINUTES OF THE JOINT MEETING OF THE RULES AND OPEN GOVERNMENT COMMITTEE AND COMMITTEE OF THE WHOLE SAN JOSE, CALIFORNIA