BILL REQ. #:  H-1424.2 

Read first time 02/19/2003.   Referred to Committee on Commerce & Labor.

     AN ACT Relating to employers that use public funds to encourage or discourage unionization; adding a new section to chapter 28B.10 RCW; adding a new section to chapter 39.04 RCW; adding a new section to chapter 39.29 RCW; adding a new section to chapter 43.19 RCW; adding a new section to chapter 47.28 RCW; adding a new chapter to Title 49 RCW; creating new sections; prescribing penalties; providing an effective date; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   (1) The legislature finds that the state currently places no limitation on the use of its funds to either encourage or discourage unionization, and as a result, public funds have been used by employers when there are efforts to unionize their work force.
     (2) The legislature declares that it is the policy of this state to recognize the right of employees to freedom of association in the workplace and freedom of choice in who will represent employees in collective bargaining.
     (3) The legislature further declares that the expenditure of public funds to support an employer's support or opposition to unionization of the employer's workers does not serve the purposes for which the public funds were provided to the employer and, thus, the expenditure of those funds to support or oppose unionization is a misuse and waste of public funds.
     (4) For these reasons, the legislature intends to ensure that public funds are not used to encourage or discourage employees from choosing union representation.

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Public funds" means the same as in RCW 43.88.020.
     (2) "Unionization" means organization of employees for the purpose of collective bargaining.

NEW SECTION.  Sec. 3   (1) An employer who receives public funds may not use, either directly or indirectly, those funds, either in whole or in part, to encourage or discourage unionization by that employer's employees or any other employees. An employer who derives revenue from property owned by the state and used by that employer through lease, concession contract, or other agreement may not encourage or discourage unionization by his or her employees who are employed on or in relation to that state property.
     (2) "Receive public funds" means to receive public funds pursuant to a payment to a health care provider, a grant, a competitively bid contract, or reimbursement for services, and also includes receipt by a subcontractor of payment for the performance of services purchased by or funded by the state.
     (3) A recipient of public funds is deemed to use the public funds if the recipient applies the funds, in whole or in part, to operating or capital expenses.
     (4) A use of public funds is deemed to encourage or discourage unionization if the funds are used, either directly or indirectly, for:
     (a) Any communication in any form that advocates directly or by implication suggests that employees should vote for or against representation by a union for purposes of collective bargaining;
     (b) Hiring or consulting legal counsel or other consultants to advise on how to assist or deter unionization or how to assist or impede a labor organization that represents employees from fulfilling its representation responsibilities;
     (c) Holding meetings to influence employees to join or not to join or form or not to form a labor organization for the purpose of collective bargaining; or
     (d) Planning or conducting activities by employer supervisors to assist or deter the activities of a labor organization.
     (5) Nothing in this chapter limits the right of individuals who are not supervisors, managers, consultants, attorneys, advisers, or contractors of a recipient of public funds to advocate for or against unionization in the facilities of the recipient to the extent not precluded by applicable law.
     (6) Nothing in this chapter limits the right of any employer or union to engage in lawful activities relating to the negotiation and enforcement of a collective bargaining agreement.
     (7) Every contract for the payment of public funds to an employer shall contain a covenant that the employer will comply with this chapter.
     (8) Nothing in this chapter prohibits an employer from granting voluntary recognition to a union as a representative of the employer's employees.

NEW SECTION.  Sec. 4   Each recipient of public funds shall account for the public funds in accordance with the following:
     (1) Public funds designated by the state for use for, or to reimburse, a specific expenditure of the recipient shall be accounted for as being allocated to that expenditure.
     (2) Public funds that are not so designated shall be allocated on a pro rata basis to all expenditures of the recipient that support or are related to the purpose for which the public funds are received.

NEW SECTION.  Sec. 5   The director of the department of labor and industries shall adopt rules to implement the requirements of this act.

NEW SECTION.  Sec. 6   (1) A labor organization or collective bargaining representative at any time may file a complaint with the director of the department of labor and industries alleging that an employer that has a contract with the state is in violation of section 3 of this act.
     (2) Within thirty days of receiving a complaint under subsection (1) of this section, the director shall conduct a hearing to determine whether the alleged violation has occurred.
     (3) The director shall make a determination and render a decision within ten days following conclusion of the hearing.
     (4) If the director determines, by a preponderance of the evidence, that it appears likely that the employer has violated section 3 of this act, the director shall order the employer thereafter to keep accurate and complete records of the employer's expenditures of all public funds received by the employer. The records shall be sufficient to show whether the employer has used public funds to encourage or discourage unionization.
     (5) Each employer subject to the recordkeeping requirements of subsection (4) of this section during a calendar quarter shall prepare and submit to the director, within thirty days following the end of the quarter, a report specifying each expenditure of public funds and each expenditure of funds to encourage or discourage unionization made by the employer during the reported quarter.
     (6) The report required by subsection (5) of this section shall include a statement that the representations made are true, correct, and contain no material omissions of fact to the best knowledge and belief of the employer submitting the certification. A violation of this subsection is a misdemeanor.
     (7) The director, on his or her own initiative or in response to a complaint the director deems credible, may at any time audit the records of an employer subject to the requirements of this section to ensure compliance with this act.
     (8) Following a certification by the director that any employer has willfully or materially failed to comply with the recordkeeping requirements of subsection (4) of this act or the reporting requirements of subsection (5) of this act, or has failed or refused to promptly provide the director or his or her designated representative access to the employer's records for the purpose of conducting an audit under subsection (7) of this act, the person shall be ineligible to receive public funds until the director certifies that the employer is in full compliance with those requirements.

NEW SECTION.  Sec. 7   (1) Any employer who knowingly authorizes or
permits an expenditure of public funds in violation of this act is liable to the state for civil damages equal to twice the amount of the expenditure, plus reasonable attorneys' fees and costs.
     (2) Any taxpayer may bring an action to recover these civil damages on behalf of the state provided that both of the following conditions exist:
     (a) The taxpayer has first served a copy of the complaint on the attorney general with a written disclosure of substantially all material evidence and information the taxpayer possesses.
     (b) The attorney general has either notified the taxpayer that the attorney general has agreed to bring an action to recover funds expended in violation of this act or, after thirty days, the attorney general has failed to agree to bring an action to recover the funds expended in violation of this act.
     (3) If the attorney general agrees to bring an action to recover the funds expended in violation of this act, the action shall be brought within sixty days of notifying the taxpayer of the intent of the attorney general to do so and the taxpayer may intervene in the action.
     (4) In any action brought under subsection (2) of this section all of the following provisions apply:
     (a) The attorney general may intervene in any action brought by a taxpayer at any time.
     (b) The action may be dismissed only if the court and the attorney general give written consent to the dismissal and their reasons for that consent.
     (c) The attorney general has the primary responsibility for prosecuting any action that the attorney general initiates or in which he or she intervenes, and is not bound by an act of the person bringing the action.
     (d) The attorney general may dismiss the action notwithstanding the objections of the taxpayer initiating the action if the taxpayer has been notified by the attorney general of the filing of the motion and the court has provided the person with an opportunity for a hearing on the motion.
     (e) The attorney general may settle the action with the defendant notwithstanding the objections of the taxpayer initiating the action if the court determines, after a hearing, that the proposed settlement is fair, adequate, and reasonable under all the circumstances.
     (f) Upon a showing by the attorney general or a defendant that unrestricted participation during the course of the litigation by the taxpayer initiating the action would interfere with or unduly delay the
prosecution of the case, or would be repetitious, irrelevant, or for purposes of harassment, the court may, in its discretion, impose appropriate limitations on the taxpayer's participation.
     (5) In any action brought under subsection (2) of this section in which the defendant is found to have violated this act, the taxpayer shall recover as part of the judgment his or her attorneys' fees and costs.
     (6) A final judgment of a court of competent jurisdiction stating that an employer has violated section 3 of this act is a ground for debarment of public funds for three years from the date the judgment is entered.

NEW SECTION.  Sec. 8   A new section is added to chapter 28B.10 RCW to read as follows:
     All contracts entered into under this chapter on or after September 1, 2003, are subject to the requirements established under chapter 49.-- RCW (sections 1 through 7 of this act).

NEW SECTION.  Sec. 9   A new section is added to chapter 39.04 RCW to read as follows:
     All contracts entered into under this chapter on or after September 1, 2003, are subject to the requirements established under chapter 49.-- RCW (sections 1 through 7 of this act).

NEW SECTION.  Sec. 10   A new section is added to chapter 39.29 RCW to read as follows:
     All contracts entered into under this chapter on or after September 1, 2003, are subject to the requirements established under chapter 49.-- RCW (sections 1 through 7 of this act).

NEW SECTION.  Sec. 11   A new section is added to chapter 43.19 RCW to read as follows:
     All contracts entered into and purchases made, including leasing or renting, under this chapter on or after September 1, 2003, are subject to the requirements established under chapter 49.-- RCW (sections 1 through 7 of this act).

NEW SECTION.  Sec. 12   A new section is added to chapter 47.28 RCW to read as follows:
     All contracts entered into under this chapter on or after September 1, 2003, are subject to the requirements established under chapter 49.-- RCW (sections 1 through 7 of this act).

NEW SECTION.  Sec. 13   Sections 1 through 7 of this act constitute a new chapter in Title 49 RCW.

NEW SECTION.  Sec. 14   This act shall not apply to contracts entered into before September 1, 2003.

NEW SECTION.  Sec. 15   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 16   If any part of this act is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the state, the conflicting part of this act is inoperative solely to the extent of the conflict and with respect to the agencies directly affected, and this finding does not affect the operation of the remainder of this act in its application to the agencies concerned. Rules adopted under this act must meet federal requirements that are a necessary condition to the receipt of federal funds by the state.

NEW SECTION.  Sec. 17   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 2003.