Founder and Managing Partner
THIS IS KCRA THREE NEWS AT FOUR. THE PROPOSAL TO BAN NONDISCLOSURE AGREEMENTS DURING LAWMAKING NEGOTIATIONS HAS OFFICIALLY BEEN WRITTEN INTO A BILL AT THE STATE CAPITOL. THE PROPOSAL IS THE RESULT OF OUR REPORTING ON THE USE OF NDAS IN THE MAKING OF CALIFORNIA’S NEW FAST FOOD LABOR LAW, KCRA THREE CAPITOL CORRESPONDENT ASHLEY ZAVALA BROKE THAT STORY. SHE’S BEEN ON IT FROM THE GET GO. SHE’S HERE NOW WITH SOME NEW INFORMATION ON EXACTLY WHAT THE NEW PROPOSAL WOULD DO. AND THERE’S ALREADY SOME UNCERTAINTY. YEAH, THERE’S ALREADY UNCERTAINTY. THERE’S ALREADY OPPOSITION. WE WILL GET INTO THAT MOMENTARILY. FOLLOWING OUR REPORTING LAST MONTH ON ALL OF THIS, REPUBLICAN ASSEMBLYMAN VINCE FONG VOWED TO PUT TOGETHER A PROPOSED STATE LAW PROHIBITING THE USE OF NONDISCLOSURE AGREEMENTS IN THESE LEGISLATIVE NEGOTIATIONS. NOW, THE BILL WAS OFFICIALLY PUT INTO WRITING LAST NIGHT, AND HERE IS SPECIFICALLY WHAT IT WOULD DO. SO AB 2654 WOULD PROHIBIT LAWMAKERS, LOBBYISTS AND OTHER GOVERNMENT EMPLOYEES FROM SIGNING, REQUESTING OR DRAFTING NDAS DURING LEGISLATIVE NEGOTIATIONS. THIS WOULD UPDATE THE POLITICAL REFORM ACT OF 1974, AND A VIOLATION OF IT WOULD BE A MISDEMEANOR. THIS WOULD REQUIRE A TWO THIRDS VOTE FROM THE LEGISLATURE IN ORDER TO PASS, AS WELL AS THE GOVERNOR’S APPROVAL. NOW, AS WE FIRST REPORTED, THE POWERFUL LABOR LOBBYING GROUP, THE SERVICE EMPLOYEES INTERNATIONAL UNION, DIRECTED THE FAST FOOD INDUSTRY TO SIGN THESE NDAS DURING THE NEGOTIATIONS OF CALIFORNIA’S FAST FOOD LABOR LAW LAST YEAR. NOW THAT LAW RAISED THE MINIMUM WAGE FOR FAST FOOD WORKERS TO $20 AN HOUR. AND IT ALSO CREATED A NEW STATE COUNCIL TO SET FUTURE PAY RAISES AND WORKING CONDITIONS FOR THOSE WORKERS. NOW, WE LEARNED THAT NDAS WERE USED AS WE TRIED TO UNDERSTAND A STRANGE CARVE OUT IN THAT LAW, WHICH EXEMPTED MAJOR CHAINS THAT BAKE AND SELL THEIR OWN BREAD AS A STANDALONE MENU ITEM. NOW, SOURCES TOLD US THAT EXEMPTION WAS PUSHED BY GOVERNOR GAVIN NEWSOM’S OFFICE WITH THE INFLUENCE OF ONE OF HIS BILLIONAIRE DONORS, WHO WAS ALSO A PANERA FRANCHISEE. NOW, NEWSOM’S OFFICE SAID THE LAW DOES NOT APPLY TO PANERA, BUT HAS NOT SAID WHO EXACTLY THAT EXEMPTION IS FOR NOW. ASSEMBLYMAN VINCE FONG SAYS THIS BILL IS KEY TO PREVENT THE SECRECY THAT HAS SURROUNDED THAT FAST FOOD LABOR LAW. WE NEED TO ELIMINATE THE USE OF NDAS WHEN IT COMES TO THE LEGISLATIVE PROCESS. THE PUBLIC DESERVES TRANSPARENCY. WHEN BILLS ARE BEING DRAFTED AND, YOU KNOW, LEGISLATORS AND THE PUBLIC NEED TO KNOW HOW THOSE PROVISIONS WERE DRAFTED, WHAT WAS BEHIND IT, WHO’S ASKING FOR IT? UM, THOSE ARE BASIC QUESTIONS THAT NOT ONLY THE PUBLIC DESERVES TO KNOW, BUT FOR US, AS WE MAKE POLICY FOR GOVERNOR GAVIN NEWSOM’S OFFICE HAS SAID IT DID NOT SIGN OR DIRECT ANYONE TO SIGN NDAS IN THE MAKING OF THE FAST FOOD LABOR LAW. THE SEIU HAS ADMITTED TO USING NDAS IN HIGH STAKES NEGOTIATIONS, THE GROUP SAID IN A STATEMENT. IN PART, IT IS REVIEWING THE LAW RIGHT NOW. WE’LL HAVE SO MUCH MORE ON WHAT THEY HAVE TO SAY TONIGHT AT SIX. PLUS, WE’LL EXPLAIN WHO IS IMMEDIATELY COMING OUT AGAINST THIS LAW. WE CAN TELL YOU RIGHT NOW IT’S THE CALIFORNIA CHAMBER OF COMMERCE. WE WILL EXPLAIN THEIR POSITION ON ALL OF THIS AS IT RELATES TO THE PROTECTION OF BUSINESS INFORMATION. BUT YEAH, MORE AT SIX ON THAT. I THINK A LOT OF PEOPLE JUST WANT MORE TRANSPARENCY WHEN IT COMES TO LAWMAKING. SO, I MEAN, WE’VE GOT HERE THIS IT’S WRITTEN THE BILL IS WRITTEN AND WE’RE GOING TO GET ITS FIRST HEARING. SO THAT IS THE QUESTION. NOT ONLY WHEN BUT IF. SO LAWS LIKE THIS FACE A KEY DEADLINE NEXT OR PROPOSED LAWS I SHOULD SAY THEY FACE A KEY DEADLINE NEXT WEEK TO PASS OUT OF ITS FIRST POLICY COMMITTEE. NOW THE FIRST POLICY COMMITTEE THAT WOULD HEAR THIS IS THE ASSEMBLY’S COMMITTEE ON GOVERNMENTAL ORGANIZATION ARDEN. BUT THAT GROUP DOES NOT HAVE A MEETING SCHEDULED NEXT WEEK. WE’VE REACHED OUT TO ASSEMBLY SPEAKER ROBERT RIVAS, WHO SAID EARLIER THIS YEAR ALL BILLS WOULD GET A HEARING, BUT HE WILL NOT COMMENT ON
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California bill to ban use of non-disclosure agreements in lawmaking process faces uncertain path
Updated: 4:43 PM PDT Apr 19, 2024
California Capitol Correspondent
A proposal to prohibit the use of non-disclosure agreements during legislative negotiations in California has officially been written into a bill but faces uncertainty over whether it will move forward with a key legislative deadline approaching. Republican Assemblymember Vince Fong on Thursday officially amended AB 2654 to ban lobbyists, lawmakers, and other government officials from signing, requesting or drafting NDAs in the drafting, negotiation, discussion, or creation of proposed state laws. A violation would result in a misdemeanor penalty. The proposal would update the state’s Political Reform Act of 1974, which would require a two-thirds vote from the Legislature. The proposal is the result of KCRA 3’s reporting on the use of non-disclosure agreements in the final negotiations of California’s new fast food labor law. The powerful labor lobbying group, the Service Employees International Union, required fast food industry representatives to sign NDAs during the tense talks. The SEIU has said it regularly uses NDAs in high-stakes negotiations to build trust with its opponents.SEIU California released this statement on Friday: “SEIU California is currently reviewing the legislation introduced today. We have always supported California’s nation-leading sunshine laws and we welcome continued discussion of how best to uphold the values of transparent and accountable government. As this bill makes its way through the process, we expect the legislature’s legal counsel and Constitutional experts will shed more light on how to balance transparency with upholding private parties’ constitutionally protected free speech rights.”The use of NDAs came to light after Bloomberg first reported and KCRA 3 independently verified that Gov. Gavin Newsom pushed for an exemption in the law for major chains that sell and bake their own bread as a standalone menu item in order to benefit one of his billionaire donors, and Panera franchisee, Greg Flynn. Newsom’s attorneys have said the law does not exempt Panera but they have not said who exactly the exemption is for. | RELATED | What we know about Panera, Gov. Newsom, California’s new fast food worker law and NDAsNewsom’s office led those negotiations without the involvement of any state lawmaker, including the Democratic Assembly member who carried the bill through the Legislature. Newsom’s office has said neither the governor nor any of his staff members signed the NDAs required by the SEIU. Newsom’s office has not yet responded to a request for comment on the newly written bill. Lawmakers on both sides of the aisle have said their use was concerning. “We need to eliminate the use of NDAs in the legislative process,”Assemblymember Fong said. “The public deserves transparency when bills are being drafted. Legislators, the public, need to know provisions, what goes behind it, who is asking for it. Those are basic questions that not only the public deserves to know but for us as we make policy.”The California Chamber of Commerce immediately voiced its opposition to the bill on Friday.Ben Golombek, CalChamber executive vice president and chief of staff for policy released this statement: “Transparency in the legislative process should be promoted and we agree that elected officials should not sign NDAs – in fact, they are actually precluded from doing so in the California Constitution – but this proposal goes much farther and attempts to regulate agreements between private entities, which we have historically opposed. Oftentimes the negotiation process involves disclosure of confidential financial information or company trade secrets in order to develop sound public policy. NDAs are necessary to ensure companies can remain at the table without fear that their financial position, intellectual capital or other proprietary information will become public.”| RELATED | Read Golombek’s letter to Assemblymember Fong Proposed laws with a price tag face a key deadline of April 26 to pass out of their first policy committee. The bill has been referred to its first policy committee, the Assembly’s Committee on Governmental Organization, but that committee has no plans to meet next week. Democratic Assembly Speaker Robert Rivas has said all bills would be heard under his leadership. A spokeswoman for his office declined to comment on the bill itself and the likelihood it would be heard next week. Read up on our coverage of the fast food law and the controversy that has followedCalifornia fast food workers to get $20 minimum wage under new deal between labor and the industryReport: California’s fast food law exempts Panera because of Gov. Newsom’s relationship with billionaire franchiseeCalifornia Republicans want investigation into Newsom’s ties to Panera franchisee, new fast food lawCalifornia’s top prosecutor responds to accusations involving Newsom, Panera franchiseePanera franchisee Greg Flynn says his California restaurants will pay a minimum of $20 an hourNon-disclosure agreements were used in negotiations of California’s landmark fast food worker law’I think everyone’s concerned’: California lawmakers react to use of NDAs in fast food minimum wage lawCalifornia lawmaker introduces bill to prohibit NDAs in legislative negotiations
SACRAMENTO, Calif. —
A proposal to prohibit the use of non-disclosure agreements during legislative negotiations in California has officially been written into a bill but faces uncertainty over whether it will move forward with a key legislative deadline approaching.
Republican Assemblymember Vince Fong on Thursday officially amended AB 2654 to ban lobbyists, lawmakers, and other government officials from signing, requesting or drafting NDAs in the drafting, negotiation, discussion, or creation of proposed state laws. A violation would result in a misdemeanor penalty.
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The proposal would update the state’s Political Reform Act of 1974, which would require a two-thirds vote from the Legislature.
The proposal is the result of KCRA 3’s reporting on the use of non-disclosure agreements in the final negotiations of California’s new fast food labor law. The powerful labor lobbying group, the Service Employees International Union, required fast food industry representatives to sign NDAs during the tense talks. The SEIU has said it regularly uses NDAs in high-stakes negotiations to build trust with its opponents.
SEIU California released this statement on Friday: “SEIU California is currently reviewing the legislation introduced today. We have always supported California’s nation-leading sunshine laws and we welcome continued discussion of how best to uphold the values of transparent and accountable government. As this bill makes its way through the process, we expect the legislature’s legal counsel and Constitutional experts will shed more light on how to balance transparency with upholding private parties’ constitutionally protected free speech rights.”
The use of NDAs came to light after Bloomberg first reported and KCRA 3 independently verified that Gov. Gavin Newsom pushed for an exemption in the law for major chains that sell and bake their own bread as a standalone menu item in order to benefit one of his billionaire donors, and Panera franchisee, Greg Flynn. Newsom’s attorneys have said the law does not exempt Panera but they have not said who exactly the exemption is for.
| RELATED | What we know about Panera, Gov. Newsom, California’s new fast food worker law and NDAs
Newsom’s office led those negotiations without the involvement of any state lawmaker, including the Democratic Assembly member who carried the bill through the Legislature. Newsom’s office has said neither the governor nor any of his staff members signed the NDAs required by the SEIU. Newsom’s office has not yet responded to a request for comment on the newly written bill.
Lawmakers on both sides of the aisle have said their use was concerning.
“We need to eliminate the use of NDAs in the legislative process,”Assemblymember Fong said. “The public deserves transparency when bills are being drafted. Legislators, the public, need to know provisions, what goes behind it, who is asking for it. Those are basic questions that not only the public deserves to know but for us as we make policy.”
The California Chamber of Commerce immediately voiced its opposition to the bill on Friday.
Ben Golombek, CalChamber executive vice president and chief of staff for policy released this statement: “Transparency in the legislative process should be promoted and we agree that elected officials should not sign NDAs – in fact, they are actually precluded from doing so in the California Constitution – but this proposal goes much farther and attempts to regulate agreements between private entities, which we have historically opposed. Oftentimes the negotiation process involves disclosure of confidential financial information or company trade secrets in order to develop sound public policy. NDAs are necessary to ensure companies can remain at the table without fear that their financial position, intellectual capital or other proprietary information will become public.”
| RELATED | Read Golombek’s letter to Assemblymember Fong
Proposed laws with a price tag face a key deadline of April 26 to pass out of their first policy committee. The bill has been referred to its first policy committee, the Assembly’s Committee on Governmental Organization, but that committee has no plans to meet next week.
Democratic Assembly Speaker Robert Rivas has said all bills would be heard under his leadership. A spokeswoman for his office declined to comment on the bill itself and the likelihood it would be heard next week.
Read up on our coverage of the fast food law and the controversy that has followed
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