California bill to ban confidentiality agreements fails

A bill that sought to ban the use of confidentiality agreements when negotiating potential laws in California has failed to pass a state legislative committee.

The proposal by Republican Assemblymember Vince Fong failed to get enough votes to pass out of the Assembly Elections Committee on Thursday. Two Republicans voted for the bill while Democratic Assemblymember Gail Pellerin, the committee chair, voted against it.

Five other Democrats on the committee did not vote.

The legislation was inspired by last year's negotiations over a bill that mandated a $20 minimum wage for fast-food workers. The bill, which Gov. Gavin Newsom signed into law, includes an exception for restaurants that produce their own bread and sell it as a standalone menu item.

It's not clear why that exception was included. The exception was also included in similar legislation that passed the year before.

Bloomberg News reported the exception was meant to benefit one of Newsom's wealthy campaign donors who owns Panera Bread restaurants. Newsom and the donor, Greg Flynn, denied the story. The Newsom administration said the exemption does not apply to Panera Bread restaurants. Flynn also pledged to pay his workers $20 an hour beginning April 1.

Labor unions and industry groups representing California restaurants met privately last summer to discuss the bill before coming to an agreement. The parties signed a nondisclosure agreement, which KCRA first reported.

Fong criticized that agreement. He introduced a bill that would void any nondisclosure agreement relating to the drafting, negotiation, discussion or creation of legislation. The bill would have also banned public officials from signing these agreements or asking third parties to sign them.

“Nondisclosure agreements certainly have their place to protect businesses' proprietary and financial information. But they should not be used in the crafting and negotiating laws that affect the daily lives of our constituents,” Fong said. “The public already has a poor perception of the legislative process. Allowing the use of NDAs will further erode and corrode their trust in government.”

Pellerin, the Democratic chair of the committee, noted there has been no evidence that public officials have signed confidentiality agreements related to legislative negotiations.

“The crux of what this bill seeks to address are conversations between private parties, not legislative negotiations involving public officials,” she said. “That's a complicated issue.”

Pellerin said the issue was so complex that lawmakers did not have enough time to fully consider it. Fong introduced the bill last week. The committee held a special hearing Thursday to consider it before a legislative deadline Friday.