Businesses Are Leaving

Turns Out California Has Become Such A Dumpster-Fire That Not Only Are People Leaving The State To Move Elsewhere, Companies Are Now Too…


According to a new study by Spectrum Local Solutions, companies are leaving California due to its “difficult business climate,” which only continues to worsen. The study claims that 660 different California-based companies have already moved their more than 765 facilities to other states. And that’s only in 2018 and 2019…

“California companies leave because the state’s business climate continues to worsen, particularly with the harsh employment, immigration and spending measures that Gov. Gavin Newsom has approved,” the study’s author, Joseph Vranich said. “I foresee more exits because California politicians have a level of contempt for business that has reached epic lows.”

And Vranich knows what he’s talking about, because he just did it! He relocated his consulting firm, Spectrum Location Solutions, from Irvine to a suburb of Pittsburgh just last year.

“Company departures are understandable when CEO’s nationwide, surveyed by Chief Executive Magazine, have for 15 consecutive years declared California the worst state in which to do business,” he said.

Another study estimates that 1,800 relocation or “disinvestment events” occurred in California in 2016, setting a record yearly high going back to 2008. About 13,000 companies left the state during that nine-year period. Of the 1,800 events, 299 of those departures landed in Texas. During the study period, 275,000 jobs and $76.7 billion in capital funds were diverted out of California. The departing companies acquired at least 133 million square feet elsewhere – and probably much more because such information often went unreported in source materials.

The Golden State Has Become Fool’s Gold

“I am embarrassed and horrified by what can only be described as a war on business enabled by my state’s legislature, and I am not a card-carrying, conservative Republican”, reports H. Dennis Beaver, author of “You and the Law.”

Any company thinking of relocating here needs to Google “California Legal Hell Hole” and “California Pay Stub Violation Penalties,” then ask itself why the following large corporations — among hundreds — have moved out of California:

Carl’s Jr. and Nissan, relocating HQ to Nashville

Toyota to Plano, Texas

Jamba Juice from San Francisco to Frisco, Texas

Chevron moved 800 jobs from its Bay Area headquarters to Texas

Nestle USA, from Glendale, Calif., to Arlington, Va.

Meritless Lawsuits Enrich Lawyers – PAGA

In California and many states, if an employee is fired, they are entitled to be paid immediately, and that makes sense. But what if, for some reason, it isn’t possible, but the employee is paid the next day? Vranich cited the example of one of his clients in San Diego who was hit with a $5,000 penalty, “Just for being one day late, and no one was harmed. This kind of thing, authorized by California law, is simply punitive.”

California’s Private Attorneys General Act (PAGA) has made the Golden State more golden for some employment attorneys who advertise heavily online, and raise litigation costs for employers.

“Under this law,” Bakersfield attorney Jay Rosenlieb notes, “lawyers are effectively ‘deputized’ to become the equivalent of government attorneys, allowed to file frivolous class-action suits, often based on minuscule violations of state law where no one is harmed.

“Many PAGA lawsuits are over technical nitpicks, such as an employer’s failure to print its address on employees’ pay stubs, even though the address was printed on the paychecks themselves.”

How frivolous are some of these suits?

“In one instance, over a 3-cent shortage on an employee’s check, a PAGA attorney sued and obtained $9,000, keeping a large chunk for himself,” Rosenlieb points out, shaking his head in disbelief, and repeating, “Over a 3-cent shortage! This is just insane!”

Fresno labor law attorney Howard Sagaser observes that, “A huge legal industry has popped up like mushrooms in California, filing suits against employers when there is no harm to anyone.

“The unbelievable amount of penalties authorized for what are so often petty, minor violations of overly complex state laws has made a number of lawyers multimillionaires and driven numerous business into bankruptcy. Today, anyone going into business who plans on hiring people needs to also retain the services of HR professionals to steer them clear of trouble, which drives up the cost of business.”

And finally, if anyone thinks that suits against employers for violations of state labor laws is no big deal, just ask the former employees of Southern California-based Guy Chaddock & Co., a 48-year-old maker of custom reproduction furniture that closed its doors — leaving 175 workers without jobs — in 2004, the year that these suits were first allowed.

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