Assemblyman Defends Law on Corporate Liability

Among its recommendations, Gov. Pete Wilson’s competitiveness council suggested Thursday that the state repeal a law that subjects corporate managers to criminal penalties if they are found responsible for injuries to workers or consumers.

The panel said the Corporate Criminal Liability Act, signed in 1989 by Republican Gov. George Deukmejian, provides an “all-too-tempting” invitation to publicity-seeking prosecutors and serves as an “unnecessary threat to those who would otherwise seek to create jobs in California.”

But Democratic Assemblyman Terry Friedman of Los Angeles, who wrote the law, said the panel’s recommendation showed “total ignorance of the nature of the law and how it has been implemented.”

There has been just one prosecution under the act since it took effect in January, 1991, Friedman said.

In that Alameda County case, the owners of Leslie Salt Co. pleaded no contest after a worker at the company’s Newark plant was crushed to death by two conveyor belts, according to a press release issued in February by the Wilson Administration’s Department of Industrial Relations.

An investigation showed that the machinery involved, used for flattening bags, was left unguarded even after other workers were nearly hurt and one suffered a minor injury.

No corporate manager was prosecuted, but the company agreed to pay a $100,000 fine. The state and local district attorney were reimbursed for their costs, and $24,400 went into the state Victims of Crime Restitution Fund.

Friedman said the law, proposed by the Consumers Union, has produced more than 70 notices to public agencies of hazardous conditions that otherwise might have been hidden or ignored. He said most of those have since been corrected.

The lawmaker said there is “absolutely no evidence” that the act has discouraged anyone from setting up shop in California. He said the panel never asked him about the law and apparently never discussed the issue with state or county prosecutors.

“The commission’s superficial and biased way of dealing with the corporate crime act indicates to me that this entire report ought to be subject to great scrutiny,” he said.