A proposed bill would give state agencies new powers to sue private employers—and would let the state labor commissioner steer a portion of the proceeds to hand-picked labor unions.
The legislation (HB 5245) is designed to bypass employee agreements that prevent individual workers from suing their employers and require them to instead take disagreements to arbitration. As one proponent put it, the bill would “allow private citizens to enforce our labor and discrimination laws as private attorneys general on behalf of the state.”
A quarter of any civil penalty would go into a “community outreach and workplace account” to fund “outreach, education and technical assistance pertaining to employee rights in the workplace.” The law specifically lists labor unions and nonprofit organizations as potential recipients. (By comparison, the “relator,” or whistleblower, would get just 20 percent).
But instead of using a competitive bidding process, the bill would give the Labor Commissioner sole discretion over who gets paid from the account. The legislation does not establish reporting requirements or oversight to make sure the money is actually spent helping workers.
This approach would give unions a financial incentive to file as many claims as possible against businesses for violations of labor and discrimination laws, and doesn’t appear to carry a penalty for initiating frivolous or unsubstantiated actions.
Interestingly enough, the Labor Department itself seemed cool to the idea of creating a labor slush fund. DOL Official Daryle Dudzinsky said, during testimony on Thursday, “we do not have the staff to fulfill this mandate” and it “would place an undue burden on the Agency.” According to the Office of Fiscal Analysis (OFA), in 2021, the DOL is expected to generate so many of lawsuits they would have hire 6 additional staff at a cost of over $800,000 per year just to handle processing the related grants.