Cal. PUC § 854.2 — California Code / Code puc / Division 1 / Part 1 / Chapter 4 / Article 6 / Section 854.2
Section 854.2
Status: in_force

(a) The Legislature finds and declares all of the following:

(1) California’s electric and gas utilities provide essential services to California residents and businesses, which are necessary to maintaining the vitality of California’s economy.

(2) Consistent with Sections 913.4, 961, and 977, an adequately sized workforce of experienced electric and gas utility employees with the appropriate training and skills, as well as the knowledge of an electric or gas utility’s facilities and equipment, is essential to the safe, efficient, and uninterrupted provision of electrical and gas services. Safe and reliable electric and gas utility service is vital to public health, public safety, air quality, and reducing emissions of greenhouse gases.

(3) Changes in the ownership or control of an electrical corporation or gas corporation may create uncertainty regarding the safe, efficient, and continuous provision of safe and reliable electrical and gas service to California consumers, leading to economic instability.

(4) Mass displacement of electrical corporation or gas corporation workers as a result of a change in the ownership or control of an electrical corporation or gas corporation causes excessive reliance on the unemployment insurance system, and public social services and health programs, increasing costs to these vital governmental programs and placing a significant burden on the state and California taxpayers.

(5) The state has a compelling interest in ensuring that when there is a change in the ownership or control of an electrical corporation or gas corporation, the new employer maintains a qualified and knowledgeable workforce with the ability to ensure safe, efficient, reliable, and continuous service to California consumers and communities.

(6) Because of destructive and deadly wildfires and gas pipeline explosions, the electric and gas industries are in an unprecedented state of instability. One combined electrical and gas corporation has sought bankruptcy protection. All the major electrical corporations have had their credit ratings lowered to junk bond status or are at risk of downgrades to junk bond status. This jeopardizes the ability of these corporations to provide safe and reliable electric and gas service, to reduce the risk of future catastrophes, to provide service at just and reasonable rates, to meet the state’s mandates to reduce carbon emissions, and to address the risks of climate change.

(7) There is a nationwide shortage of the qualified utility line workers and qualified line clearance tree trimmers needed to prevent and respond to wildfires, storms, and other major events. Because this work is performed on and near high voltage lines and other energized electrical equipment, these jobs require substantial training and are highly dangerous. Current efforts to hire enough qualified people to perform these functions have fallen short even though exceptional compensation packages are being offered. Any reduction in the number or qualifications of these employees would increase the risk to employees and the risk of future catastrophic wildfires, and would increase the frequency and duration of outages, particularly as a result of more common and more severe major storms. It is in the interest of the state and its citizens that utilities have the qualified workforce necessary to minimize the risk of future wildfires, to minimize future outages, and to restore service as promptly as possible after storms.

(8) For the reasons provided in this subdivision, the Legislature must take action to stabilize the utility workforce so as to preserve the ability of utilities to provide safe and reliable electric and gas service. This requires that the size of the workforce be preserved or increased, and workers not be lost to other utilities offering more stable employment or better compensation.

(b) For purposes of this section, the following definitions shall apply:

(1) “Change of control” means any of the following:

(A) An event that triggers the application of Section 851 or 854.

(B) A material change in ownership of the electric corporation or gas corporation, its parent company, or its holding company.

(C) A filing seeking bankruptcy protection.

(D) The sale of all or a material portion of the assets of the electrical corporation or gas corporation, its parent company, or its holding company, or any merger, consolidation, or acquisition of the electrical corporation or gas corporation, its parent company, or its holding company with, by, or into another corporation, entity, or person.

(E) In the case of a combined electrical and gas corporation, the change in ownership of all or a substantial portion of either the gas or electric line of business of the combined corporation.

(F) A voluntary or involuntary change in ownership of assets from an electrical or gas corporation to ownership by a public entity.

(2) (A) “Covered employee” means an individual who has been employed by an electrical corporation or gas corporation for at least 90 days immediately before a change of control affecting that individual’s principal place of employment. A change of control affects a covered employee’s principal place of employment where the change of control results in the predecessor employer transferring control of the place of employment to the successor employer.

(B) “Covered employee” does not include any of the following:

(i) A managerial, supervisory, or confidential employee.

(ii) A temporary employee.

(iii) A part-time employee who has worked less than 20 hours per week for the predecessor employer for at least 90 days immediately before the change of control.

(3) “Person” means a corporation as defined in Section 204, a person as defined in Section 205, any other individual, corporation, partnership, limited partnership, limited liability partnership, limited liability company, business trust, estate, trust, association, joint venture, agency, instrumentality, or any other legal or commercial entity, whether domestic or foreign.

(4) “Predecessor employer” means the person who controls the electric or gas utility before the change of control.

(5) “Principal place of employment” of an employee means the office or other facility of the electrical corporation or gas corporation where the employee is principally assigned to work by the predecessor employer.

(6) “Successor employer” means the person who controls the electrical corporation or gas corporation after the change of control.

(7) “Total compensation” means the combined value of the covered employee’s wages and benefits immediately before the change of control. Total compensation may be paid entirely as wages or in any combination of wages and fringe benefits, to be determined by the successor employer. Total compensation includes, but is not necessarily limited to, both of the following amounts:

(A) The covered employee’s hourly wage rate or the per diem value of the covered employee’s monthly salary.

(B) Employer payments toward the covered employee’s health and welfare and pension benefits. Employer payments toward health and welfare and pension benefits shall include only those payments that are recognized as employer payments under paragraphs (1) and (2) of subdivision (b) of Section 1773.1 of the Labor Code.

(8) “Transition period” means a period of 180 days immediately following the effective date of a change of control.

(c) (1) Except as otherwise provided in this section, a successor employer shall retain all covered employees for at least the transition period following a change of control, unless the commission approves a reduction in the workforce pursuant to subdivision (i). During the transition period, the successor employer shall not reduce the total compensation of a covered employee.

(2) During the transition period, a successor employer shall not terminate a covered employee without cause.

(d) (1) No later than 15 days before the effective date of a change of control, the predecessor employer shall do both of the following:

(A) Cause to be posted, in a conspicuous place in a manner that is readily viewed by covered employees, a public notice of the change of control at each principal place of employment of any covered employee.

(B) Cause the notice to be sent to any labor organization that represents covered employees.

(2) The notice shall include the name of the predecessor employer and its contact information, the name of the successor employer and its contact information, and the effective date of the change of control. The notice shall be posted in a conspicuous place in a manner that is readily viewed by covered employees.

(e) This part shall not be construed to limit the right of covered employees to bring legal action for wrongful termination.

(f) The rights and remedies provided pursuant to this section are in addition to, and are not intended to supplant, any existing rights or remedies.

(g) No later than 15 days before the effective date of a change of control, a predecessor employer shall provide to the successor employer the name, address, date of hire, total compensation, and classification of each covered employee.

(h) A successor employer shall retain the following written or electronic records for at least three years:

(1) The list provided to the successor employer pursuant to subdivision (g).

(2) Any offer of employment made to a covered employee.

(3) Any termination of a covered employee during a transition period, including the reasons for the termination.

(4) Any written evaluation of a covered employee.

(i) For three years after the transition period and subject to the provisions of any existing collective bargaining agreement, a successor employer shall provide to employees who would have qualified as covered employees had they been employed during the 90-day period immediately before a change of control no less than the wages, hours, and other terms and conditions of employment provided before the change of control, including any previously negotiated increase in wages, and shall maintain no less than the total number of employees who would have qualified as covered employees had they been employed during the 90-day period immediately before a change of control. The successor employer may reduce the wages, hours, and other terms and conditions of employment or the total number of employees in a manner inconsistent with collective bargaining agreements only if authorized by the commission in a final, nonappealable decision. The commission shall not provide this authorization except on proof by a preponderance of the evidence in an application proceeding of all of the following:

(1) Neither the nature nor scope of the work performed by those employees proposed to be eliminated is necessary to providing safe and reliable utility service. The electrical corporation or gas corporation shall provide an independent third-party study to support its position. Other parties to the proceeding shall be provided with an opportunity to conduct their own studies.

(2) The proposed new wages, hours, and other terms and conditions of employment shall be consistent with wages, hours, and other terms for California electrical corporations and gas corporations. The electrical corporation or gas corporation shall provide an independent third-party study to support its position. Other parties to the proceeding shall be provided an opportunity to conduct their own studies.

(3) There will be no reduction in the ability of employees of the electrical or gas corporation to prevent damage from or to respond to an emergency such as a wildfire, storm, flood, mudslide, or earthquake, or to gas leaks, electric outages, interconnection requests, work requested by others, locate and mark requests, or other utility services.

(4) There will be no reduction in the ability of the electrical corporation or gas corporation to respond to mutual aid requests of other utilities.

(j) A successor employer may terminate an employee with cause consistent with any applicable selective bargaining agreement during the period specified in subdivision (i).

(k) A successor employer and a labor organization representing covered employees may, in a collective bargaining agreement, provide that the agreement supersedes the requirements of this section with respect to the represented employees.

(l) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.