Legislature(1995 - 1996)
02/01/1995 03:01 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE LABOR & COMMERCE STANDING COMMITTEE
February 1, 1995
3:01 p.m.
MEMBERS PRESENT
Representative Pete Kott, Chairman
Representative Norman Rokeberg, Vice Chairman
Representative Brian Porter
Representative Jerry Sanders
Representative Beverly Masek
Representative Kim Elton
Representative Gene Kubina
MEMBERS ABSENT
None
COMMITTEE CALENDAR
* HB 72:"An Act enacting the Uniform Fraudulent Transfer Act."
PASSED OUT OF COMMITTEE
HB 115:"An Act relating to settlement and payment of claims
for minimum wage and overtime compensation claims and
to liquidated damages and attorney fees for minimum
wage and overtime compensation claims."
PASSED OUT OF COMMITTEE
(*First Public Hearing)
WITNESS REGISTER
DEBORAH PERELMAN, Legislative Counsel
National Conference of Commissioners on Uniform State Laws
Chicago, IL
Telephone (312) 864-0323
POSITION STATEMENT: Testified in favor of HB 72.
JERRY K. WEAVER, Senior Vice President
Commercial Loans
National Bank of Alaska
Secretary, Alaska Bankers Association
301 West Northern Lights Blvd.
Anchorage, AK 99503
Telephone: (907) 265-2920
POSITION STATEMENT: Testified in favor of HB 72.
TOM EVANS, President
Anchorage International Credit Association
2700 E. Tudor Rd.
Anchorage, AK 99507
Telephone: (907) 762-8878
POSITION STATEMENT: Testified in favor of HB 72.
MARY ELLEN BEARDSLEY, Assistant Attorney General
Attorney General's Office
Department of Law
1031 W. 4th Ave., No. 200
Anchorage, AK 99501
Telephone: 269-5218
POSITION STATEMENT: Testified in favor of HB 72.
GEORGE DOZIER, Committee Aide
Labor and Commerce Committee Aide
Capitol Bldg., Rm 17
Juneau, AK 99801
Telephone: 465-4954
POSITION STATEMENT: Provided information on HB 115.
TERRY CRAMER, Attorney
Legal Services Division
Legislative Affairs Agency
130 Seward St., Suite 409
Juneau, AK 99801
Telephone: 465-2450
POSITION STATEMENT: Provided legislative counsel on HB 115.
SHERRIE GOLL, Lobbyist
Alaska Women's Lobby
P.O. Box 22516
Juneau, AK 99802
Telephone: 463-6744
POSITION STATEMENT: Testified against HB 115.
PAM NEAL, President
Alaska State Chamber of Commerce
217 Second St.
Juneau, AK 99801
Telephone: 586-2323
POSITION STATEMENT: Testified in favor of HB 115.
ED FLANAGAN, Assistant Commissioner
Department of Labor
1111 W. 8th St.
Juneau, AK 99801
Telephone: 465-2700
POSITION STATEMENT: Provided information regarding HB 115.
PREVIOUS ACTION
BILL: HB 72
SHORT TITLE: UNIFORM FRAUDULENT TRANSFER ACT
SPONSOR(S): REPRESENTATIVE(S) PORTER,Bunde
JRN-DATE JRN-PG ACTION
01/06/95 39 (H) PREFILE RELEASE
01/16/95 39 (H) READ THE FIRST TIME - REFERRAL(S)
01/16/95 39 (H) LABOR & COMMERCE, JUDICIARY, FINANCE
01/19/95 91 (H) COSPONSOR(S): BUNDE
02/01/95 (H) L&C AT 03:00 PM CAPITOL 17
BILL: HB 115
SHORT TITLE: DAMAGES & ATTY FEES FOR UNPAID WAGES
SPONSOR(S): LABOR & COMMERCE
JRN-DATE JRN-PG ACTION
01/25/95 130 (H) READ THE FIRST TIME - REFERRAL(S)
01/25/95 130 (H) LABOR & COMMERCE, JUDICIARY
01/30/95 (H) L&C AT 03:00 PM CAPITOL 17
01/30/95 (H) MINUTE(L&C)
ACTION NARRATIVE
TAPE 95-4, SIDE A
Number 000
CHAIRMAN PETE KOTT called the meeting of the House Labor and
Commerce Standing Committee to order at 3:01 p.m. Members
present at the call to order were Representatives Kott, Rokeberg,
Sanders, Masek, Porter and Elton. He stated there was a quorum
present.
HL&C - 02/01/95
HB 72 - UNIFORM FRAUDULENT TRANSFER ACT
Number 035
REPRESENTATIVE BRIAN PORTER, prime sponsor of HB 72, read the
following sponsor statement:
"The Uniform Fraudulent Transfer Act (UFTA) provides creditors
with a remedy when debtors transfer or hide assets that would
otherwise be available to satisfy legitimate debts. HB 72 is
modeled after the uniform law adopted by the National Conference
of Commissioners on Uniform State Laws. The Attorney General of
the state of Alaska is in support of this legislation.
"Alaska law in this area was adopted in 1949 from the state of
Oregon and has received little legislative attention. Yet, many
changes in both state and federal law, particularly in the area
of bankruptcy, and relationships between creditors and debtors
have become more complex.
"At this time, Alaska law provides that a conveyance of real or
personal property will be void if it was made `with the intent to
hinder, delay, or defraud creditors.' AS 34.40.010. The
existence of this fraudulent intent is a question of fact and the
burden of proof is upon the creditor (Summers v. Hagen_P.2d_,
No.3961, May 28, 1993). This burden of proof can be extremely
hard to prove. UFTA would eliminate the present Alaskan
necessity of finding actual intent by a property transferor to
hinder, delay or defraud a creditor in many situations where the
transferor is obviously transferring assets solely to keep them
out of reach of transferor's creditors. UFTA sets out numerous
nonexclusive factors to be considered by the court when
determining if the debtor had `actual intent.'
"Thirty-two states have adopted UFTA into their laws. Uniformity
has become not only a question of law between states, but also
between state and federal law. Without uniformity, credit
becomes less available, and the credit mechanism is less
reliable. The Uniform Fraudulent Transfer Act takes into account
the current development in both law and practice in
creditor-debtor relationships."
CHAIRMAN KOTT said this bill is a complex matter and draws on the
Federal Conveyance Act as well as drawing in the Bankruptcy Act
of 1918. He then called for teleconference witnesses.
DEBORAH PERELMAN, Legislative Counsel, National Conference of
Commissioners on Uniform State Laws, testified via teleconference
from Chicago. She explained that this organization is a national
statutory drafting committee made up of lawyers, judges, and law
professors who draft laws that the organization feels are needed,
on a uniform basis, throughout the country. They did work such
as the Uniform Commercial Code (UCC), and numerous family law
acts. She stated the bottom line is that the acts that come out
of the National Conference are as unbiased and as unpartisan as
can be in order to achieve a noncontroversial adoption throughout
the country. The UFTA from 1984, is a revision of the Uniform
Fraudulent Conveyance Act (UFCA) which was drafted by the
conference in 1918. The latter was adopted by over half the
states. Alaska did not adopt the UFCA, but instead adopted the
law of the state of Oregon. The purpose of the UFTA is basically
the same as the earlier Act in that it's a category of transfers
as fraudulent to creditors and it provides creditors with a
remedy for such transfers. The basic premise is that a person
who has acquired debt should not be able to manipulate his or her
assets so that the creditors will be deprived of their value if
the debtor defaults on his or her debt. The Act provides
creditors with a remedy when debtors hide or transfer their
assets. The conference decided to revise the UFCA because the
terminology was archaic and because the Bankruptcy Reform Act of
1978 had dramatically changed the federal law. Ms. Perelman
stated that the relationship between the debtor and creditor had
become a great deal more complicated. The UFTA has been adopted
by 33 states so far, and a number have indicated an interest in
passing the Act this year or next. She urged Alaska to adopt the
Act in order to be in agreement with most of these other states.
Number 169
CHAIRMAN KOTT stated for the record that Representative Kubina
arrived at 3:02 p.m.
REPRESENTATIVE KIM ELTON asked Ms. Perelman if Oregon had adopted
the UFTA.
MS. PERELMAN stated that Oregon had adopted the Act.
CHAIRMAN KOTT asked if there are any circumstances by which a
transferee of a good faith transfer for value would be subject to
judgment?
MS. PERELMAN answered that the Act sets out badges of fraud which
allow that even if there was a good faith transfer for value, it
can still be considered a fraudulent transfer under the Act, if
certain components of the Act are met. She restated that her
answer was "yes" there are transfers that can still be considered
a fraudulent transfer, even if done in good faith.
Number 196
JERRY WEAVER, Senior Vice President and Manager of Commercial
Loans, National Bank of Alaska and Secretary, Alaska Bankers
Association, stated that the Bankers Association supports HB 72.
He agreed with Ms. Perelman's reasons. He stated that fraudulent
transfer of bank collateral has been a growing problem since the
late 1980s. He explained that because it is so difficult to
prove the intent fraudulent transfer, few creditors would even
begin an action. Mr. Weaver thinks it is time to bring this code
up to par with other states, and this bill would have some
bearing on the outside credit that is made available within the
state as well as affecting creditors within the state. He also
stated his organization supports updating most of the uniform
state statutes and this works well in making uniform credit
available throughout the country. He also pointed out that this
Act is endorsed by the American Bar Association, most of the
state banking associations, and several other creditor groups.
TOM EVANS, President, International Credit Association, testified
via teleconference from Anchorage. He stated his organization
supports HB 72. He said the creditors have the right to know
that the debtor is not using fraudulent or illegal means to
enhance his position. He stated he is not asking that the debtor
lose any of his rights, but is asking that the creditor also gets
their rights. He informed the committee that recent surveys show
that certain creditors only receive an average of 20 cents on the
dollar.
Number 262
MARY ELLEN BEARDSLEY, Assistant Attorney General, Department of
Law, State of Alaska. She stated she was speaking on behalf of
the Attorney General's Office in support of passing HB 72. She
agreed with Ms. Perelman's arguments and gave an example of where
this Act would be very important. She explained the following:
In a current civil lawsuit of Alaska Housing Finance Corporation
the plaintiff, Alaska Housing, sued the defendant for money owed
to them and attached some of his property. After this
attachment, the defendant proceeded to transfer the property to
his brother, and then claimed that the property was always owned
by his brother. Ms. Beardsley stated current law requires that
Alaska Housing must show that the defendant had the actual intent
to fraudulently transfer this property to his brother. She
explained this is extremely difficult because this is all done
through circumstantial evidence. If the UFTA had been in
existence prior to this transfer, then Alaska Housing could have
used factors set out in that Act to show that the defendant had
the intent to fraudulently transfer the property. She further
explained that part of the badges of fraud are that the transfer
is to an insider, and certainly the brother is an insider. She
further stated the badges include that the debtor has
retained control of the property and the transfer occurred after
the lawsuit. She said the burden of proof then would be
transferred over to the defendant, and he would have to show good
cause for the transfer. Ms. Beardsley stated she thought this
case would be a good example of how the two laws differ.
Number 317
CHAIRMAN KOTT asked Ms. Perelman what the justification of
combining treatment of past and present creditors might be.
MS. PERELMAN replied that the debtor would know he would be owing
this money, he then makes a fraudulent transfer. That future
creditor should have recourse as well.
Number 339
CHAIRMAN KOTT opened public testimony in Juneau for HB 72. There
being no public testimony, it was then opened for discussion by
the committee.
REPRESENTATIVE PORTER closed the sponsor's comment by saying that
Alaska laws on this case are way behind the power curve. He
further stated that HB 72 passed the House last year and got all
the way through the Senate, but died there in the last moments of
activities.
Number 351
CHAIRMAN KOTT commented that Ms. Beardsley indicated that our
existing law isn't working. There being no further comments,
Chairman Kott said he would entertain a motion.
Number 360
REPRESENTATIVE KUBINA moved to pass HB 72, with individual
recommendations out of committee.
CHAIRMAN KOTT moved HB 72 with individual recommendations and
accompanying fiscal notes out of committee.
CHAIRMAN KOTT called for a brief recess at 3:21 p.m.
HL&C - 02/01/95
HB 115 - DAMAGES & ATTY FEES FOR UNPAID WAGES
Number 369
CHAIRMAN KOTT reconvened at 3:33 p.m. HB 115, the labor wage and
hour bill, was brought before the committee. Chairman Kott
summarized the previous meeting of January 31, 1995; the changes
needed on HB 115 were concerning settlements between employees
and employers and also the way attorney fees are paid to the
prevailing party. Chairman Kott said the employee could work
through the Department of Labor. Chairman Kott called on his
committee aide to give a brief overview of McKennon v. Nashville
Banner Publishing Co. and how it ties in with Mr. Legacki's
testimony of January 31, 1995.
Number 403
GEORGE DOZIER, Committee Aide, House Labor & Commerce Committee.
Mr. Dozier cited McKennon v. Nashville Banner Publishing Co.
Supreme Court #93-1543, decided January 23, 1995. Mr. Dozier
described the case as the employee, Mrs. McKennon, had worked for
said company for 30 years, she was 62, and felt she was going to
be let go because of her age. She started taking confidential
memos on the financial status of the company and showed them to
her husband. The employer let her go allegedly because of a re-
entrenchment of the company. Mrs. McKennon then brought suit
under the federal act. Mr. Dozier explained that later in the
case, Mrs. McKennon had given a deposition and it came out that
she had shown confidential material to her husband. The company
then let her go again saying they had just cause. The employer's
attorney then brought a summary judgment motion against her in
U.S. District Court and argued that because the employer had just
cause to dismiss her even though they had no knowledge at the
time, this gave them an absolute defense to the age
discrimination suit.
Number 436
MR. DOZIER related that both the District Court and Circuit
Courts ruled in her favor. The Supreme Court was then faced with
deciding whether the existence of just cause, not known to the
employer, constitutes a defense for dismissal in an age
discrimination case. Mr. Dozier stated the Supreme Court ruled
that no, it didn't constitute an absolute defense. This was
after noting that some of the portions of the Age Discrimination
Act were very similar to the remedial portions of the Fair Labor
Standards Act (FLSA). Mr. Dozier explained that Congress, in
enacting the Age Discrimination Act, had a dual purpose both
public and private. The public act was to discourage employers
from discriminating against individuals, and the private
motivation was to enable those individuals discriminated against
to recoup their damages. Mr. Dozier summarized that the intent
of the decision is, that just focusing on the private aspect of
the Act would be sufficient in allowing individuals to recoup
damages, but the public aspect wouldn't be served. Essentially,
Mr. Dozier commented that what the Supreme Court did was adjust
the damages and allowed the lawsuit to proceed with the ruling
that damages would be cut off as of the date the employer learned
it had just cause.
Number 466
REPRESENTATIVE PORTER asked if it did decide that the damages
were cut off at the time of cause?
MR. DOZIER said that damages could not be computed at the time
the employer learned of (Indisc.--static).
CHAIRMAN KOTT asked if there were additional questions for Mr.
Dozier.
REPRESENTATIVE PORTER asked what the connection is between this
case and HB 115.
CHAIRMAN KOTT responded that it did seem impossible to tie in
some connection.
TERRY CRAMER, Attorney, Legal Services Division, Legislative
Affairs Agency, stated that the case sounded like there were
similar statutes which may be changed by the legislature.
Number 485
REPRESENTATIVE ELTON asked if the body should get back in touch
with Mr. Legacki to see if they'd missed his point of testimony.
MR. DOZIER stated that only connection with HB 115 and McKennon
v. Nashville Banner Publishing Co., and he felt it a weak
connection, was that perhaps Mr. Legacki was arguing that like
the Supreme Court emphasized the public purpose, the dual aspect
of this particular statute, the age discrimination placed
reliance on an importance on the public purpose behind the Act,
thereby allowing the damages. He stated that perhaps by way of
analogy it would do the same when confronted with the Fair Labor
Standards Act and further by way of inference that state statutes
would diminish remedial rights of the FLSA. Mr. Dozier stated
this was the only connection that he could perceive.
Number 507
REPRESENTATIVE ELTON stated they should move HB 115 forward to
Judiciary so they could get back in touch with Mr. Legacki to see
if they missed something.
Number 513
CHAIRMAN KOTT turned to public testimony in Juneau.
SHERRIE GOLL representing the Alaska Women's Lobby, indicated her
concern that HB 115 seemed contrary to the letter of the Fair
Labor Standards Act. Ms. Goll outlined three areas that
concerned her the most. The first was the change from current
exemption from court rule; specifically, prohibiting the
defendant from collecting attorney fees. She asked why we can
get away with changing the Act in the state, but under the larger
umbrella act we can't get away with it? She went on to say this
change would say that liquidated damages can be bargained away or
waived. She also stated if the case is taken through the
Department of Labor, damages would be automatic, but if you have
an attorney, your damages may or may not be awarded. She talked
to someone from the Department of Labor prior to testifying and
asked them what would make an employee not take their case
through the Department of Labor. She explained that the
Department of Labor sometimes tells employees to get counsel.
She stated further the federal act doesn't allow people to waive
their rights. She pointed out for the record that when HB 115
was in the session last year in the senate, in the title there
was a court rule change, because this bill was making a change to
Alaska Rule of Civil Procedure 82. She asked why a court rule
change was required by the same legislation, and with the new
redrafted version, there was no required court rule change in the
title.
CHAIRMAN KOTT asked if there was anyone else to testify on HB
115.
CHAIRMAN KOTT described a memo from Parry Grover dated May 9,
1994, that appeared to be relevant. Chairman Kott noted in the
memo it states that federal law does not prohibit states from
adopting their own wage and hour laws. Chairman Kott pointed out
that prior to the Kinney case, settlements between employers and
employees were the most expeditious thing to do to resolve
matters. Chairman Kott commented that since the Kinney case
though, that was no longer the case. He further stated the
purpose behind HB 115 was to bring us back to pre-Kinney days.
Chairman Kott described what HB 115 was attempting to do, and
that was to grant the court discretion to award less than full
liquidated damages with no guarantee that the court has to do
this, since the burden of proof is on the employer. The
Department of Labor is only there to negotiate. If the employee
agrees with the negotiation, he/she can then waive their rights
and then a settlement can take place. Chairman Kott explained
that with this, they were opening up an option for the employee
to deal directly with the employer with certain safeguards that
must be followed, which are detailed in HB 115. Chairman Kott
summarized that the last provision of HB 115 was that they were
conforming to civil law by awarding the prevailing party attorney
fees. Chairman Kott then reiterated that HB 115 has a Judicial
referral, and they would attempt to contact Mr. Legacki and Mr.
Blasco for further testimony if needed.
Number 610
REPRESENTATIVE KUBINA requested permission to ask Terry Cramer
who drafted HB 115 some questions. He stated that when we change
a court rule it takes a two-thirds vote, and he asked, if we
exempt something from court rule, what majority does that take?
Number 614
TERRY CRAMER answered she didn't believe that it did, but she
would check. She also stated she wasn't sure why the Senate
version had a court rule change notation and this didn't.
REPRESENTATIVE KUBINA stated that when HB 115 was written
originally as awarding to the plaintiff, it doesn't appear from
what was taken out, it referred to a court rule and would have
had the effect of altering the court rule.
MS. CRAMER replied that if, the court rule were in existence at
the time this was written.
CHAIRMAN KOTT remarked that then what they were doing in essence,
was repealing an exemption to the existing court rule and not
actually changing the court rule; so therefore a court rule
change wouldn't be required in this legislation.
Number 634
REPRESENTATIVE PORTER remembered that last year when this went
through Judiciary, they addressed the same question and
determined that it wasn't required; it was a substantive change,
not a procedural change.
REPRESENTATIVE ELTON stated he was concerned with the sectional
analysis; it says the rest of the Act applies to actions in which
a final judgment hasn't been entered yet. He further stated in
Section 4 of HB 115 (indisc.--paper shuffling).
TAPE 95-4, SIDE B
Number 000
REPRESENTATIVE ELTON asked whether an employer could present the
employee with a written settlement agreement prior to employing
that person and whether signing that agreement could be a
condition of employment.
Number 032
MS. CRAMER stated that would be something that this doesn't
directly address, but it sounds like the employer would have too
much power holding the employee to that bargain. She further
stated it really depends on the facts of the case.
Number 046
CHAIRMAN KOTT asked what the terms would be in that type of
waiver.
REPRESENTATIVE ELTON replied that perhaps the employee wouldn't
seek liquidated damages, or if they did, they couldn't collect
more than fifty cents on the dollar of minimum wage or overtime.
Representative Elton essentially wanted to make sure that a
written settlement couldn't be a condition of employment.
MS. CRAMER believed that a court might not recognize that as a
settlement if it were entered into before there was a claim. Ms.
Cramer stated that a settlement was a resolution of an existing
dispute and there is no dispute until the hours have been worked.
CHAIRMAN KOTT concurred that you couldn't settle something until
it exists.
Number 050
REPRESENTATIVE ELTON asked whether the Federal Fair Labor
Standards Act would allow the state to set a standard that is
less than the federal standard; and if so, would the federal
standard prevail despite the lower state standard.
MS. CRAMER responded that the federal standard would apply for
the Feds and they have the responsibility for enforcing the
Federal Fair Labor Standards Act; the state has the
responsibility for enforcing the state act. She stated the state
act was different in that our minimum wage is higher by statute,
and our overtime provisions specify no more than an eight hour
day. The federal statute says that after forty hours a week,
you're entitled to overtime. Ms. Cramer stated if there was a
case that violated both federal and state laws, and the federal
government wanted to enforce their Act, then the federal law
would apply. She stated that any state standards not included in
the federal law should not be available. She noted that when the
state went to enforce its law, it would have to comply with what
the legislature had established as state policy.
REPRESENTATIVE ELTON asked if attorney fees by the employer could
be classified as a business expense.
MS. CRAMER replied she would assume that they could be, but she
wasn't a tax lawyer.
CHAIRMAN KOTT called Pam Neal to testify.
Number 116
PAM NEAL, President of Alaska State Chamber of Commerce, stated
the chamber was in support of HB 115. She feels it a punitive
measure having to pay liquidated damages without giving thought
to what the cause was. Ms. Neal said that bringing it more in
line with federal law would be a fairer measure.
Number 135
REPRESENTATIVE ELTON asked Ms. Neal if she had looked at the
issue of attorney fees.
MS. NEAL responded that there was more of move to balance the
playing field with having attorneys fees. Knowing that if you
lose you have to pay attorney fees might limit the number of
frivolous lawsuits.
Number 153
CHAIRMAN KOTT asked Ms. Neal if she felt that HB 115 would ease
some of the burden on the court system.
MS. NEAL responded not only the court system, but the
administrative process also.
Number 163
CHAIRMAN KOTT asked Ms. Neal to comment on some of the safeguards
that have been built into the legislation; did she feel they were
too weak or too strong?
Number 167
MS. NEAL believed that the safeguards were still there for the
employee. It isn't good for the business community, as a whole,
not to be interested in the welfare of the employee. Ms. Neal
explained there ought to be opportunity for hearing the intent
behind the error, and these damages are punitive in thinking, and
therefore, there should be some measure of judgment on whether
there was fault or not.
ED FLANAGAN, Assistant Commissioner for the Department of Labor,
commented on Ms. Cramers' comments regarding a case of an
employer having the employee sign a settlement prior to
employment. Mr. Flanagan stated this was the situation down line
after the claim is incurred. With regard to conformity under
federal law, under the FLSA there isn't any provision for
attorney fees for plaintiffs. The McKennon case reaffirmed
public policy, where plaintiff suits are fostered by an award of
attorney fees only to that party. Mr. Flanagan disclosed that
the Department of Labor felt that unless there are some tight
parameters, it's just too easy to end up in an ignorance of the
law defense. Mr. Flanagan then described a federal case where a
motel association put out a newsletter that showed how their
employees weren't covered by the FLSA, and a motel owner went by
that and was let off the hook for liquidated damages. Mr.
Flanagan stated that the law is punitive, and the way to protect
yourself is to be informed of the law.
Number 224
REPRESENTATIVE ELTON asked if there might be more administrative
resolving of these issues. If so, if more are diverted to
administrative resolution, would the Department of Labor be
involved.
Number 233
MR. FLANAGAN agreed that it was possible. He stated that if we
go to pre-Kinney where you could settle for less than full
liquidated damages, the department would support that.
Number 240
REPRESENTATIVE ELTON asked if there would be a fiscal impact on
the department if they resolve more of these cases
administratively.
Number 248
MR. FLANAGAN responded that it could go either way. There
probably will be less of these cases. If you go to the court
rule, the issue is that the fees are 30 percent of the reasonable
fees that currently are awarded with these cases. It will have
an effect of putting more of a burden on the department because
it would discourage employees from taking them on and attorneys
from representing them.
CHAIRMAN KOTT closed public testimony.
Number 261
REPRESENTATIVE KUBINA stated he was concerned with the courts
being able to award judgment on the prevailing party. He felt it
would be hard for an employee to defend his rights. He brought
up the fact that Tesoro supports this bill, but obviously they
have attorneys on staff, so it's not as much of a burden for them
as for an employee to try to find an attorney to represent them.
Representative Kubina asked if the sponsor would consider it a
friendly amendment to delete section two - to leave the lawyers
the way the law is now.
Number 290
CHAIRMAN KOTT replied that he would not consider it because what
the intent is, is to reduce the number of frivolous lawsuits.
Number 299
REPRESENTATIVE PORTER stated he supports moving HB 115 out.
Number 334
REPRESENTATIVE ELTON agreed with the need to reduce the load on
the courts, but didn't agree with the attorney fees paid by the
prevailing party. Representative Elton described a case in the
fishing industry where the company has made a practice of not
paying overtime, and to pay less than minimum wage. Every time
they get caught they declare bankruptcy, re-form under a new name
and do it again. These people that are bringing the actions are
minimum wage. What we're doing with the prevailing party
provision in this bill is making them make an additional
decision. He believes we're increasing the risk to them, they
know they can't afford to lose. Essentially, Representative
Elton stated he would feel a lot more comfortable voting to pass
HB 115 out if section two was deleted.
Number 386
CHAIRMAN KOTT asked what the will of the committee was.
Number 391
REPRESENTATIVE MASEK made a motion to move HB 115 to the
Judiciary Committee.
CHAIRMAN KOTT stated there was a motion to move HB 115 out of the
Labor & Commerce Committee to the Judiciary Committee. Hearing
no objection, HB 115 with accompanying fiscal notes and
individual recommendations was passed out.
ADJOURNMENT
There being no further business to come before the House Labor
and Commerce Committee, Chairman Kott adjourned the meeting.
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