National Clothesline

In front of a crowded house at the California Cleaners Association’s Fabricare Show in Long Beach, a trio of industry experts listed some of the past and present regulations that have plagued drycleaners in California and beyond. While each speaker tried to keep their comments brief, the list of regulations itself was anything but.

CCA lobbyist Mike Belote of California Advocates initiated the session with of some of the state’s good, bad and close call legislation efforts over the past year.

Belote said the recall effort against Sacramento Gov. Gray Davis was a contributing factor that lead him to a “siege mentality” in office. It was widely believed that Davis favored legislation that, if passed, could potentially sway a core group of Democratic voters and keep him at his political post.

“There were some bills passed last year that were breathtakingly bad for the business community, but the governor signed them to try and save himself,” Belote said.

One controversial bill that Gov. Davis signed prior to his recall was SB 796, nicknamed the “Sue Your Boss” law, which essentially opened the door for employees to sue employers for any violations of the state’s Labor Code.

“There are like 500 violations for the Labor Code that you as businesspeople can commit, and some of them are remarkably petty,” Belote stated. “Failure to put the worker’s compensation carrier phone number on the wall... failure to put the Attorney General Whistle Blower Hotline number on the wall — none of us could survive an audit. This was the mother of all bad business bills.”

The California business community was up in arms against the legislation from the beginning, but a class action case filed against Amgen, Inc., a Ventura County company with about 6,000 employees, served as the perfect example of a business being victimized by the law. The suit named five causes of actions — mostly infractions of failing to post notice of information. In all, the dollar amount reached $175 million.

An amendment to SB 796 arrived earlier this year when Gov. Arnold Schwarzenegger signed SB 1809, a corrective action to curtail future lawsuits based on employers’ posting, notice and reporting violations. Additionally, the change required employees to advise their employers of their violations to the Labor Code, giving them an opportunity to correct those infractions before a lawsuit can proceed.

Unfortunately for cleaners, SB 796 wasn’t the only legislative setback brought about during the 2003-04 session.

Belote also noted how California business owners may now be sued when their employees are sexually harassed by non-employees.

“If your counter staff says, ‘That customer has been hitting on me every week for the last two months. I don’t like it.’ You may be liable for sexual harassment if you fail to take immediate action,” Belote said. “What does that mean? That means speaking to the customer and saying, ‘Hey, you’ve got to stop hitting on my counter staff or I can’t serve you anymore.’”

The state may broaden the scope of the law soon with AB 2889, which proposes to extend liability for employers to all forms of harassment, including gender, race, age and sexual orientation.

Also on the block are a few other key bills, including AB 2832, which seeks to increase California’s minimum wage by $1 over the next two years, and AB 1950, which plans to extend privacy rules to non-financial institutions that hold personal information about consumers.

“You are not a financial institution as defined by the law, nor is my lobbying firm, but AB 1950 says that our companies must adopt reasonable safeguards to protect the privacy of personal information regarding consumers... name, address, phone number, credit card information, etc.,” Belote explained.

Both bills, though passed by the legislature, still have to be signed by Gov. Schwarzenegger in order to become law. According to Belote, both will likely be terminated.

“There’s a new sheriff in town,” he said, referring to Schwarzenegger. “If your bill is bad for business, your bill is going to be vetoed.”

Of course, some bills fail before they even reach the governor’s desk, as was the case with SB 1168, which would have recommended adding a new fee to perc and other chemicals on the Prop. 65 list in order to fund a program that monitors biohazard in people. Belote believes this issue isn’t dead, however, and it may find its way into the 2005-06 legislative session.

There was more bad news for the industry concerning Prop 65. Two bills that would have made cleaners exempt from having to pay on multiple lawsuits for the same Prop 65 judgment died in committee.

“The reason they failed is actually a very interesting legal debate,” Belote said. “They’re worried about businesses engaging in ‘sweetheart lawsuits’ to avoid Prop. 65. In other words, I’ve got Prop. 65 exposure and I say to Steve here, ‘Please sue me. We’ll settle for a buck and that will prevent anybody from suing me on the same thing.’

“It’s hard to figure out when a lawsuit is an inside deal or if the parties are engaged in good faith negotiations to come up with a fair settlement.”

Despite some setbacks, Belote stressed that business owners should still hold hope for the future.

“I believe things are looking up in California with the change of governors,” he said. “It doesn’t matter if you are a Democrat or a Republican. What matters is there’s a balance in the process. Instead of a Democratic legislature sending bills to a Democratic governor who feels he has to sign them to appeal to Democratic constituents, you have a Democratic legislature sending bills to a Republican governor who says we have to worry about business.”

Joining Belote on the speaker panel was NCA Executive Director Nora Nealis, who briefly outlined the history of regulations from coast to coast in order to illustrate a few points.

“If misery loves company, there’s misery in other parts of the country concerning drycleaning legislation,” she said, adding that the rise of environmental initiatives against drycleaners was comparable to a yawn.

“Not because it’s boring,” she noted. “It’s because when one person yawns, it’s contagious. They get an idea. They hear something — and they could be an environmental group or a legislator. You never know what will happen and how it will affect somewhere else.”

Nealis indicated how trends of vapor barrier room usage and machinery certification in California contributed to more stringent DEC regulations for New York state cleaners.

However, a more serious ripple effect was the perc phase-out plans that began in California. Alderman Edward Burke, inspired by regulations adopted on the west coast, proposed a ban on perc cleaning in residential buildings in the city of Chicago.

“He decided if it was good enough for California to phase out perc, then Chicago citizens were entitled to the same protection,” she said. “We were able to stifle the yawn then.”

But it didn’t take long for Massachusetts to catch the yawn.

“A bill surfaced there in the legislature that was known as the “Ten Chemical” bill (SB 1268),” she said. “They were going to phase out ten chemicals, perc being one of them.”

However, perc is not the only targeted cleaning agent.

Other problems for Massachusetts cleaners concerned the presence of regulated chemicals found in discharge water during testing. Eventually, many attributed the anomaly to some wetcleaners who incorrectly used chemicals developed for dry side solvent during the pre-spotting process.

“So, in certain parts of Massachusetts, you can use perc, hydrocarbon, silicone... whatever — as long as you are not laundering or wetcleaning,” Nealis joked.

Another bias against laundering cropped up in New York City when Councilwoman Margarita Lopez introduced legislation to prohibit mixing different people’s garments in washing machines.

Though Lopez ultimately backed off from the initiative, Nealis believes she was a textbook case of a conscientious politician causing more harm than good.

“Do the legislators know what the consequences are of some of these well-meaning things they are doing? What was the yawn that got her started?” she asked. “She had a constituent complain about wash-and-fold because she got somebody else’s panties back with her laundry and was horrified to learn that it wasn’t only her stuff in the wheel when she brought her clothes in to be washed.”

Like it or not, Nealis went on to add, cleaners are likely to always face regulatory problems.

“I think that one of the things we have to recognize is that regulators get paid to regulate,” she said. “That’s what they do. We get paid to clean clothes. They get paid to regulate.”

Thus, she emphasized, cleaners are “probably never going to be able to declare victory” on the matter.

Instead, industry members should willingly accept that there will always be rules, but try to keep them reasonable and live in accordance of them.

“I think we need to be careful in the way we handle whatever it is we handle,” she said. “If we’re wetcleaning, we need to be using products that are designated for wetcleaning. If we’re using alternative solvents, we need to use them responsibly and according to the manufacturer’s instructions.

“Beyond that, we need to establish positive relationships before we are in trouble and needy with our legislators. It could be something as simple as calling their office and saying, ‘I’m getting rid of my dead stock next week. Do you have a charity or a homeless shelter that can use these clothes?’”

The morning’s final speaker, HSIA Executive Director Steve Risotto, returned the discussion to issues that California cleaners are currently dealing with, including South Coast Air Quality Management District’s Rule 1421.

As the law is written, all perc-using businesses in the counties of Los Angeles, San Bernardino, Orange and Riverside will have to phase perc out completely by the end of 2020.

Risotto also broke down other deadlines set in place by Rule 1421:

• As of January 1, 2003, no more new perc plants are allowed and existing plants can no longer add new perc machines;

• As of July 1, 2004, converted machines are no longer allowed;

• By November 1, 2007, all perc machines will be required to have primary and secondary controls and risk-based limits will be defined.

“So, we still have quite a horizon of at least potential perc use in the district despite the assumption [to the contrary] in many parts of the country,” Risotto said.

One big issue he focussed on was the determination of the risk-based limits, which are being calculated by SCAQMD. The group currently estimates that cleaners emit 50 percent of their total solvent purchase. Many industry affiliates consider that a high estimate.

“The District has already sent out surveys to cleaners asking them for all the information they need to do the calculations,” Risotto said. “The District, without sharing a lot of information with the industry at this point, is in the process of a one-year study that will try to confirm their own data.”

Risotto also updated attendees on the status of AB 998, which became effective this year. The law currently levies a $3 per gallon fee on every manufacturer of perc in California, and on every person who imports perc into the state for use in drycleaning.

“It will increase to $4 per gallon in January of 2005. It goes up another dollar every year through 2013,” he explained.

Initially, regulators wanted to make the program fees retroactive to January 1, 2004, but the industry contested and the start date was changed to August 16.

Funds raised from AB 998 will be funneled back into the form of industry grants for “non-toxic, non-smog forming” alternative solvents.

“You cannot supplement perc,” Risotto pointed out. “It has to be a 100 percent replacement.”

Unfortunately, there is still confusion to which alternatives are covered, but the law indicates that wetcleaning and carbon dioxide-based systems will be acceptable forms of cleaning.

“As the law is currently written, hydrocarbon will never qualify for funding,” Risotto added.

Final determinations of who is eligible for grants under AB 998 will be determined by the California Air Resources Board.