Category: Client Alerts

1. Non-Profits Are Not Exempt from Employment Laws.
Just because your organization is mission-driven doesn’t mean you’re exempt from California’s strict labor laws. Wage and hour rules, discrimination laws, and workplace safety requirements still apply. These can also include federal and state compliance laws that may require alignment.

2. Employee Misclassification Can Be Costly.
Misclassifying workers—whether as independent contractors or exempt employees—can lead to significant penalties. Volunteers and interns can also pose a risk. If an intern performs work similar to an employee, they may be entitled to wages and benefits under state law, despite the classification.

3. Handbooks & Policies Should Be Updated Annually.
California laws change frequently. Having an outdated handbook—or not having one at all—can create legal risks. Key policies include at-will employment, anti-harassment, and wage and hour compliance, and most recently, social media and Artificial Intelligence policies. Additionally, ensure proper classification, payroll compliance, workplace postings, and required trainings are up to date.

4. Changes in Funding and Staffing Models Can Affect Policies.
Many non-profits are considering reduction-in-force (layoffs, furloughs), or examining how to restructure staffing, alter hiring practices, and adjust benefits provided to align with anticipated funding changes. When contemplating these changes, you need to be sure to adhere to state and federal requirements and provide employees with notice of upcoming changes.

5. Performance Management and Discipline.
Progressive discipline is a useful tool for employees and employers. Employers need to ensure practices are in place to effectuate discipline without jeopardizing the at-will status of employees. Appropriately documenting performance issues is key to mitigating legal risks.

6. California’s Leave Laws Are Complex.
California has some of the most generous leave laws in the country, including CFRA, FMLA, paid sick leave, and pregnancy disability leave. Know which apply to your organization based on entity, size, and structure.

7. Wage & Hour Violations Are Common Pitfalls.
Non-profits may rely on salaried employees who can work long hours, but failing to pay overtime or provide proper meal and rest breaks to eligible employees can result in costly claims.

8. Harassment Prevention Training is Mandatory.
In California, all employers—including non-profits—with five or more employees must provide harassment prevention training every two years. Compliance is good for your culture and non-compliance can be costly.

9. Board Members Can Have Employment Liability.
Non-profit board members oversee operations, but if they participate in hiring, firing, or policy enforcement, they can also be held personally liable for employment law violations of the entity. Don’t forget to also spell out conflicts of interest to staff.

10. Arbitration Can Limit Employer Liability.
Utilizing a well-drafted arbitration agreement for all employees can help limit damages should an employee sue your organization.

Meyers Nave partners with California non-profits to ensure compliance with evolving employment laws. We assist with employee classification, wage and hour compliance, workplace policies, required trainings, internal investigations, and dispute resolution. Our team helps organizations proactively mitigate risk by drafting and updating employee handbooks, implementing arbitration agreements, and ensuring policies align with current legal requirements. When disputes arise, we provide strong legal advocacy in litigation. Stay ahead of legal challenges—contact us to ensure your organization is protected and prepared.

On March 12, 2025, the Ninth Circuit issued its decision in Kumar v. Koester, dismissing a constitutional challenge to a university’s anti-discrimination policy that added “caste” as a protected class. Effective January 1, 2022, California State University’s Policy Prohibiting Discrimination, Harassment, Sexual Misconduct, Sexual Exploitation, Dating Violence, Domestic Violence, Stalking, and Retaliation was amended to include caste as a protected category. It defined “Nationality Race or Ethnicity” to include “color, caste, or ancestry,” but did not explicitly define “caste.” Two Hindu professors sued, arguing that the policy violated their constitutional rights under the Due Process Clause and the Religious Clauses of the First Amendment. The district court dismissed the Due Process claim for lack of standing and ruled in favor of CSU on the religious claims. On appeal, the Ninth Circuit affirmed the lower court’s ruling on Due Process grounds and vacated the decision on the religious claims, finding the plaintiffs lacked standing to assert them. Due Process Claim: The court found no sufficient injury because the plaintiffs did not claim an intention to engage in religious practices that could be considered caste discrimination or harassment under the policy. Instead, they explicitly stated that they “abhorred” the caste system and intended to comply with the policy. The court also rejected their argument that self-censorship constituted a legal injury, as they failed to show a credible threat of enforcement against them. Religious Clause Claims: The Free Exercise claim failed because the plaintiffs did not demonstrate that the policy interfered with their ability to practice their religion. Their claim was based solely on offense at the perceived association of Hinduism with caste discrimination. The Establishment Clause claim also failed, as the plaintiffs did not show that the policy was hostile toward religion or caused them a “spiritual injury.” Without an actual injury, the court ruled they had no standing. The Court drew on various sources to define “caste”, referring to it as an “expansive term referring to social hierarchies that exist across the world in many religions and societies…” The Court also noted that “caste” is not exclusively a religious concept, relying on Supreme Court precedent often discussing caste as a social, but not a religious concept.  This ruling is significant in the ongoing debate over caste protections in anti-discrimination laws. While the court did not rule on the constitutionality of caste as a protected class, the case underscores the importance of proper standing in future legal challenges. Employers in California should stay informed about developments in this area and ensure compliance with evolving legal standards in workplace policies and practices. Should you have questions about inclusion and diversity in recruitment, retention and employment please contact Camille Hamilton Pating, Janice Brown, or Nadia Bermudez.

Assembly Bill 52 (AB 52) requires public agencies to consult with tribes during the California Environmental Quality Act (CEQA) process. On March 14, 2025, in Koi Nation of Northern California v. City of Clearlake, the First District Court of Appeal filed the first published opinion addressing AB 52, concluding the City of Clearlake (City) failed to comply with CEQA’s tribal consultation requirements. Consequently, the Court set aside the City’s approval of a four-story hotel and road extension and the accompanying mitigated negative declaration (MND).

The opinion highlights the need for CEQA lead agencies to (1) pay careful attention to the affiliation of tribal representatives speaking on behalf of a tribe, including keeping track of intergovernmental agreements between tribes, if applicable; and (2) clearly document in the administrative record all efforts to consult and “seek agreement” on mitigation measures proposed by a tribe before deeming consultation complete.

City’s Coordination and Consultation Efforts

In January 2022, pursuant to City Guidelines, the City initiated informal “Native American coordination” by informing Koi Nation Tribal Councilmember Mr. Dino Beltran of the project and requesting information about the cultural significance of the project area to Koi Nation. Mr. Beltran identified a Koi Nation ancestor’s property and residence in the project area. At Mr. Beltran’s request, the City determined that the ancestor’s property was located 0.2 miles south of the project, and promised Koi Nation it would “proceed with caution” given this proximity.

In February 2022, Mr. Beltran informed the City Manager of the Intergovernmental Agreement between Koi Nation and another tribe, the Habematolel Pomo of Upper Lake, to assist Koi Nation to “protect the ancestors in the Southeastern Clearlake region.” Mr. Beltran identified Mr. Robert Geary, Tribal Historic Preservation Officer for the Habematolel Pomo of Upper Lake, as Koi Nation’s representative for AB 52 consultation. The City then sent Mr. Geary formal notification of Koi Nation’s opportunity to consult on the project pursuant to AB 52. Mr. Geary timely responded, requesting formal consultation and asking the City for detailed project information and the latest cultural resources study. Mr. Geary’s response, sent on Habematolel Pomo Cultural Resources letterhead, did not explicitly state it was made on behalf of Koi Nation.

A consultation meeting took place soon thereafter, at which, Mr. Geary stated, he provided the City with a treatment protocol to be used if resources were found and a monitoring agreement for cultural monitors during project development. He was told adoption of these measures was contingent on City Manager approval.

Following the meeting, Mr. Geary sent a letter stating, “the Tribe has concerns that the project could impact known cultural resources.” He requested the City (1) retain cultural monitors during development and all ground disturbance activities pursuant to a monitoring agreement; (2) incorporate Habematolel Pomo of Upper Lake’s Treatment Protocol as a mitigation measure; and (3) provide cultural sensitivity training for pre-project personnel on the first day of construction. The City did not respond to either Mr. Geary’s letter or his subsequent request for an update on the monitoring agreements, and did not communicate further with Mr. Geary or Koi Nation until the Notice of Intent to adopt the MND was circulated seven months later.

The Draft MND stated that no tribal cultural resources had been discovered at the project site. It did identify mitigation measures to reduce impacts to “unknown tribal cultural resources” that had “the potential to be uncovered during ground-disturbing activities.” These measures included only one of the three measures requested by Mr. Geary on behalf of Koi Nation. The MND recognized Koi Nation’s ancestral ties to the project area and summarized the initial informal coordination with Koi Nation. The MND stated the City sent AB 52 letters to “local tribes” and that the “Habem[a]to[l]el tribe requested consultation which occurred in March 2022.”

Koi Nation did not comment on the Draft MND during the public review period.

Following approval of the project and adoption of the MND by the City Planning Commission, Koi Nation appealed to the City Council. Members of Koi Nation and its attorneys addressed the City Council and asked the City to adopt appropriate mitigation and finish AB 52 consultation. The City Council denied the appeal.

Trial and Appellate Court Proceedings

Koi Nation filed a petition for writ of mandate, challenging the approval. The trial court denied Koi Nation’s petition, finding “nothing in the record constituted a written request from Koi Nation to invoke the right to consultation on the project” under AB 52 and that Koi Nation could not challenge a consultation that did occur. Koi Nation appealed. The Attorney General filed amicus curiae briefs in support of the Koi Nation. The League of California Cities and California State Association of Counties filed an amicus brief in support of the City.

The Court of Appeal sided with Koi Nation. The Court was unpersuaded by the City’s argument that “no reasonable person would agree” that Mr. Geary’s letter responding to the City’s formal notification of the opportunity for Koi Nation to consult on the project constituted a written request by Koi Nation. Nor did the Court agree with the City that it “should not be required to keep track of intergovernmental agreements or guess as to ‘who a representative is speaking for when receiving a consultation request.’” In the Court’s view, the record showed Mr. Geary’s response complied with CEQA’s requirement “that a tribe’s response be in writing, be timely, and request consultation.” Though perhaps “less than ideally clear, [] in context it suffices.”

Next, the Court of Appeal determined the “sparse” record lacked sufficient evidence to conclude that the consultation met statutory requirements for meaningful consultation, which must include “seeking, discussing, and considering carefully the views of others” and “where feasible, seeking agreement.” (See Govt. Code, § 65352.4.) Nor did the record include evidence to support the City’s claims that consultation could “permissibly cease” under Public Resources Code section 21080.3.2, subdivision (b). The court found the consultation “perfunctory at best” and concluded that “[i]n the absence of any discussion about the City’s reasoning or conclusions, there was no real opportunity for Koi Nation and the City to seek mutual agreement as the statute contemplates.”

Key Takeaways:

• An agency’s failure to comply with the consultation requirement under AB 52 constitutes a prejudicial abuse of discretion requiring setting aside the agency’s environmental review and project approvals.
• Consultation must be “meaningful.” To accomplish this, there must be discussion between the agency and the tribe regarding the agency’s reasoning for granting or denying any requested mitigation measures. The agency should inform the tribe of its decision directly, and not merely publish it in the CEQA document. If agreement is infeasible due to an impasse between the agency and tribe, the agency should document that impasse in the record.
• The record should reflect the agency’s consideration of the consulting tribes’ recommendations regarding tribal cultural resources, and their value and significance to the tribes. The record should demonstrate the agency made a “reasonable effort” to reach a mutual agreement with a consulting tribe before determining consultation has concluded. A tribe’s submission of information to an agency outside the consultation process does not relieve an agency of its responsibility to conduct consultation under AB 52, “or the need for the agency to show whether or how the consultation affected the agency’s decision.”
• When tribal consultation has concluded, an agency should provide notice to the consulting tribe(s) indicating it considers consultation “concluded” pursuant to PRC Section 21080.3.2(b) and outlining the agency’s reasoning.

On March 1, Governor Newsom proclaimed a state of emergency to expedite critical fuels reduction projects to address “catastrophic wildfire risks created by forest conditions across the state.”

The Governor’s proclamation would suspend state rules and regulations, including CEQA and the California Coastal Act, to the extent necessary to expedite critical fuels reduction projects.

Critical Fuels Reduction Projects

Eligible critical fuels reduction projects must include, as their primary objective, at least one of the following activities:

1. Removal of hazardous, dead, and/or dying trees;
2. Removal of vegetation:

• For strategic fuel breaks identified in approved fire prevention plans;
• For community defensible space;
• Along roadways, highways and freeways to create safer evacuation routes and reduce roadside ignitions;
• Using cultural traditional ecological knowledge (TEK) and/or prescribed burns;
• To maintain existing fuel breaks or fuel modification projects

Requirements

The proclamation contains additional measures to ensure that streamlined projects balance expedited fuels reduction with environmental protection, including requirements that:

1. The Secretary of CalEPA or Secretary of the California Natural Resources Agency (CNRA) must first determine whether a proposed project would be eligible for streamlining, based on whether the project would accelerate critical fuels reduction projects while protecting public health and the environment.
2. Projects must be carried out in accordance with the State Environmental Protection Plan, or a comparable plan describing how the project would achieve that balance.
3. The Board of Forestry and Fire Protection must take immediate steps to update the California Vegetation Treatment Program Environmental Impact Report, in consultation with CNRA and the public, to continue promoting expedited review for large wildfire risk reduction treatments.

For more information, a copy of the Governor’s proclamation can be found here. Please also visit our website for key points from the Governor’s related Executive Order issued January 12, 2025 here.

Key Takeaways

• A federal District Court in Maryland has temporarily blocked, nationwide, portions of two of President Trump’s Executive Orders restricting DEI (Diversity, Equity, and Inclusion) programs within the federal government and for private employers.
• There is significant uncertainty about how this preliminary injunction will fare on appeal, and about how the Trump Administration will define “illegal DEI” and use federal authority to eliminate DEI initiatives regardless of the court.
• California-based employers and federal contractors and grantees face a delicate balance in complying with California laws and regulations and balancing federal anti-DEI initiatives spearheaded by the Trump administration.

Analysis

On January 20, 2025, President Trump signed Executive Order (“EO”) 14151, “Ending Radical Government DEI Programs and Preferencing.”  EO 14151 directs the federal government to terminate all mandates, policies, programs, preferences, and activities relating to diversity, equity, inclusion, and accessibility (DEIA), and requires that federal agencies report a list of all employees in DEI positions within 60 days.

On January 21, 2025 President Trump signed an EO 14173 titled, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” EO 14173 directs federal departments block contracts to private entities that have DEIA policies or initiatives and prohibits “illegal DEI” affirmative action policies, practices, and programs in the federal government and private sector.

The U.S. District Court for the District of Maryland is overseeing a lawsuit, National Association of Diversity Officers in Higher Education et al. v. Trump et al., Dkt. No. 1:25-cv-00333 (D. Md. Feb. 21, 2025), in which plaintiffs, including higher education organizations and the Mayor and City Council of Baltimore, MD., are challenging EO 14151 and EO 14173 on the grounds they are unlawful and unconstitutional. Plaintiffs requested a preliminary and permanent injunction enjoining the Defendants other than President Trump from enforcing the EOs.

The lawsuit is narrowly focused on three provisions of the Executive Orders, those which: (1) order all federal executive agencies to “terminate . . . ‘equity-related’ grants or contracts;” (2) require all federal executive agencies to include a certification in “every contract or grant award,” that the contractor or recipient “does not operate any programs promoting DEI” in violation of federal anti-discrimination law; and (3) direct the U.S. Attorney General to take “appropriate measures,” such as enforcement activity, to encourage the private sector to end “illegal discrimination and preferences, including DEI.”

Plaintiffs raised various Constitutional challenges to these provisions, notably that they are unconstitutionally vague in violation of due process (both in terms of what “DEI” means in these Orders and how to comply with the order to terminate certain programs) and that the provisions constitute viewpoint discrimination in violation of the Free Speech Clause.

The District Court’s preliminary injunction is far from last word on the challenged provisions, however. First, the Trump Administration is likely to take a narrow view of the scope of this injunction and may direct federal agencies that were not named as Defendants to continue implementing the EOs. In particular, it remains unclear if and how the federal Equal Employment Opportunity Commission, which was not named as a Defendant, will implement the direction of the Trump Administration. Second, the District Court’s preliminary injunction is in the process of being appealed to the Fourth Circuit Court of Appeals, with the possibility of a stay on the preliminary injunction and/or reversal on the merits in that forum. Intervention by the U.S. Supreme Court, which in its blockbuster 2023 Students for Fair Admissions case overturned affirmative action in university admissions, adds further uncertainty. Private employers and recipients of federal funds in California should therefore stay engaged with this issue to be in the best position to navigate this legal uncertainty while maintaining their corporate cultures, values, and brands.

The Trump Administration’s DEI Executive Orders raise important legal compliance questions for California-based federal contractors, subcontractors and private employers, both because their obligations under California law have not changed. While much of the coverage of the DEI Executive Orders has focused on recipients of federal funds as contractors or grantees, private employers in California also face uncertainty in how to simultaneously comply with state laws, including state regulatory and reporting obligations, and federal directives opposing DEI. Although some important elements of the Executive Orders are enjoined—for now—California employers should consult legal counsel to keep up to date with these rapidly evolving legal developments as they review policies such as employee handbooks and workforce programs, as well as at every step of state and federal regulatory compliance processes.

Should you have questions about inclusion and diversity in recruitment, retention and employment— or about your own DEI programs, please contact Camille Hamilton Pating, Janice Brown, or Nadia Bermudez.

Meyers Nave has a robust Labor and Employment team that helps private, public, and non-profit entities develop and maintain effective, practical, and lawful approaches to accomplish their inclusion and diversity objectives.

Finally, employers have some good PAGA news!

Key Takeaways

• Meyers Nave recommends that employers consider utilizing Arbitration Agreements to reduce liability related to wage and hour claims.
• Employers should update handbooks and arbitration agreements annually to assure up to date legal compliance.
• Based on two 2024 rulings (see below), Arbitration agreements can positively impact the Employers ability to quickly resolve PAGA claims.

Supporting Cases

• Leeper v. Shipt, Inc. (Dec. 30, 2024). The court clarified that every PAGA action includes an individual claim, based on the statutory language and legislative history. This decision confirms that employees must arbitrate their individual claims before pursuing a PAGA representative action, reinforcing the importance of arbitration agreements ending the so-called “headless” case strategy.
• Rodriguez v. Lawrence (Oct. 10, 2024). This case highlights the preclusive effect of arbitration in PAGA actions, where an employer’s victory in arbitration can bar relitigating collective wage and hour claims in a PAGA representative action. It underscores the strategic advantage of arbitration agreements in reducing the risk of duplicative litigation and penalties under PAGA.

Learn more about PAGA reform in our 2025 Employment Law Update Handout.

If you have questions about these cases or need assistance reviewing your arbitration agreements, please contact us.

Following Governor Newsom’s recent Executive Order to assist those affected by the devastating wildfires in Los Angeles County, on Monday, LA Mayor Karen Bass issued her own emergency Executive Order designed to expedite the recovery and rebuilding process following the fires that have burned over 25,000 acres, destroyed thousands of structures, and displaced over 80,000 residents. This sweeping order eliminates significant regulatory hurdles for rebuilding, accelerates permitting processes, and facilitates the rapid cleanup of debris in the City of Los Angeles, while addressing post-fire hazards. Below, we summarize key provisions of the order and its implications for our clients across the public, private, and public-private sectors.

Key provisions of the order include:

• Processing eligible projects under SB 35’s streamlined permitting and reconstruction processes, including an exemption from discretionary review.
• Expediting approvals for reconstruction projects that do not exceed 110% of pre-fire dimensions (floor area, height, and bulk), in substantially the same location, for the same use as the structure(s) existing immediately prior to the wildfires, and no increased density (e.g., ADUs).
• Exempting projects in the Coastal Zone from Coastal Development Permit requirements.
• Waiving demolition permit requirements for applicants that provide timely advance notice, subject to safety limitations.
• Allowing displaced residents to utilize temporary housing and storage structures on affected properties during rebuilding, for up to three years or until construction is complete.
• Establishing task forces to streamline debris removal and mitigate risks, such as flooding and mudslides, while complying with environmental laws and optimizing federal reimbursement opportunities.
• Expediting Temporary Certificates of Occupancy for 1,400 near-completion multi-family housing units to increase available housing supply.
• Creating a centralized special permitting center staffed seven days a week by representatives from all City development service departments to ensure coordinated and accelerated rebuilding efforts.
• Directing City departments to inspect and provide guidance related to the treatment of historic properties in affected areas, pursuant to federal and state standards.
• Preparing to seek additional regulatory and funding support from state and federal authorities.

If this affects you, please remember to:

• Engage Early: Contact City officials to understand specific requirements and timelines for permits or approvals under this new order.
• Evaluate Eligibility: Review projects against the “Eligible Project” criteria to confirm eligibility for waivers and expedited review.
• Coordinate with Department of Building and Safety: Ensure proper documentation and advance coordination with City staff to meet environmental and health standards for debris disposal and demolition.
• Monitor Updates: The City will issue further implementation guidelines and relief opportunities in the coming weeks. Stay informed on developments.
• Leverage Expertise: Consult with legal counsel to navigate complexities and maximize opportunities for support in rebuilding under this order.

For more information, a copy of the Mayor’s executive order can be found here. Please also visit our website for key points from the Governor’s Executive Order issued January 12, 2025 here.

Have questions? We are here to assist you in navigating this evolving landscape and understanding the impact of this order on your projects and operations.

Contact us for further guidance or to discuss specific implications for your business or organization.

On January 12, 2025, California Governor Gavin Newsom issued an Executive Order in furtherance of his January 7 State of Emergency declaration to expedite recovery efforts following the devastating fires in Los Angeles and Ventura counties.

The three key points from the order include:

1) Suspension of Key Regulations

• The order suspends California Environmental Quality Act (CEQA) review and California Coastal Act permitting for properties and facilities substantially damaged or destroyed by the fires, provided that the new construction occurs substantially in the same location as, and does not exceed 110% of the original footprint and height of, properties and facilities that were legally established and existing immediately before the emergency.

2) Extended Price Gouging Protections

• The order extends price gouging protections for essential building materials, housing and storage services, and repair, construction, and emergency clean-up services until January 7, 2026, in Los Angeles County.

3) Streamlining Rebuilding Efforts

• State agencies, including the Department of Housing and Community Development (HCD), are tasked with identifying additional permitting barriers and provisions of the California Building Code that can be suspended or streamlined to expedite recovery, improve affordability, and streamline the reconstruction or replacement of residential properties destroyed or damaged by fire.
• The State will work with the Legislature to identify long-term statutory changes to facilitate rapid rebuilding and improve fire resilience in affected areas, including potential incentives for fire-hardening measures.

Governor Newsom emphasized the importance of removing obstacles to rebuilding and working with the Legislature to further support recovery efforts while enhancing wildfire resilience.

A copy of the executive order can be found here.

Have questions? Contact us. Our Meyers Nave team of attorneys and staff are committed to keeping our clients informed and prepared in this dynamic situation.

 

Wondering what’s new, what’s changed, and what’s next?

Our Labor & Employment Team has you covered with our 2025 Employment Law Update handout detailing new and evolving laws for Government Entity, Private Sector, and Non-Profit California Employers.

This valuable resource covers the following:

• Employer Captive Audience Meetings are Banned (SB-399)
• Minimum Wage
• Expansion of Leave Rights: Victim Leave (AB 2499)
• Paid Family Leave (AB 2123)
• Expansion of Anti-Discrimination Laws: Local Enforcement of Employment Discrimination Rules (SB 1340)
• Protected Characteristics: Intersectionality (SB 1137)
• Social Compliance Audit (AB 3234)
• Additional Expansion of Anti-Discrimination Laws: Driver’s License Discrimination (SB 1100)
• Race Discrimination Hairstyles (AB 1815)

It also includes a PAGA Update:

• A Brief PAGA Reform Overview
• Help for Small Employers
• Early Evaluation Conferences for Large Employers
• Penalty Reductions
• Increased Portion of Penalties for Employees
• Immediate Application
• Impact on Employers

Download the 2025 Employment Law Update Now

On September 29, Governor Newsom signed Assembly Bill 98, a bill establishing warehouse design and build standards for new or expanded “logistics uses”, requiring cities and counties to update their circulation elements to include truck routes, and imposing air pollution study requirements on the South Coast Air Quality Management District. Commencing January 1, 2026, AB 98’s regulations preempt local regulation of warehouses serving logistics uses. Cities and counties cannot approve logistics use developments that do not meet the minimum standards in AB 98.

Logistics Use Facility Development Requirements:

AB 98 regulates new or expanded (by over 20% of existing square footage) logistics uses. A “logistics use” is specifically defined as “a building in which cargo, goods, or products are moved or stored for later distribution to business or retail customers, or both, that does not predominantly serve retail customers for onsite purchases, and heavy-duty trucks are primarily involved in the movement of the cargo, goods, or products.” The statue creates a complicated set of regulations that apply depending on whether or not the logistics use meets certain standards.  The purpose of the regulations is to address the effects of emissions from heavy duty trucks serving logistics use warehouses on sensitive uses.

AB 98 applies different development standards to logistics use facilities based on various factors including: (1) whether a facility’s size exceeds 250,000 square feet; (2) whether loading bays (i.e., dock doors) are less than 900 feet from a sensitive receptor (including residences, schools, daycare facilities, parks, nursing homes and hospitals); (3) whether the site’s existing zoning is industrial or non-industrial; (4) whether the site is located in a “warehouse concentration region”; and (5) the entitlement application date for the new or expanded facility.

The standards which apply to warehouse building and site plan design include the following: building design and location, parking, truck loading bays, landscaping buffers, entry gates, and signage. Generally, stricter standards apply to larger logistics uses abutting sensitive receptors in areas zoned for non-industrial uses (“Non-Industrial Areas”). For example, logistics facilities in Non-Industrial Areas must provide a 500-foot setback from the loading bay to the property line of sensitive receptors; whereas, the same facilities in areas zoned for industrial uses (“Industrial Areas”) must provide a 300-foot setback. Less strict standards apply to smaller logistics uses (less than 250,000 square feet) in Industrial Areas, which do not need to meet the 300-foot setback requirement. Similarly, landscaped walls, berms or buffers required to screen adjacent sensitive uses from logistics uses must be 50-feet in Industrial Areas, and 100-feet in Non-Industrial Areas. Additionally, logistics uses requiring demolition of housing units occupied in the last 10 years must replace each such unit with two units of moderate- or low-income housing and provide displaced tenants with payments equal to 12 months’ rent at the current rate.

The stricter “tier” of “21^st century warehouse design standards” under AB 98 (“Tier 1”) applies exclusively to larger logistics use facilities (greater than 250,000 square feet), regardless of whether in Industrial or Non-Industrial Areas. The “Base” tier applies to smaller facilities (less than 250,000 square feet) in Non-Industrial Areas, while neither tier applies to smaller facilities in Industrial Areas. Moreover, any logistics use in a Non-Industrial Area in the warehouse concentration region (the Counties of Riverside and San Bernardino and the Cities of Chino, Colton, Fontana, Jurupa Valley, Moreno Valley, Ontario, Perris, Rancho Cucamonga, Redlands, Rialto, Riverside, and San Bernardino) must orient truck bays on the opposite side from sensitive receptors, to the extent feasible; locate truck entry, exit, and internal circulation away from sensitive receptors; provide buffering and screening from light and noise; and have separate entrances for heavy-duty trucks.

Local Agency Land Use Planning Requirements:

AB 98 also requires local governments to update the circulation element components of their General Plans to ensure truck routes avoid residential areas, to the extent feasible. Circulation elements must:

1. Establish specific travel routes for truck traffic that can accommodate additional traffic and avoid residential areas and sensitive receptors; and
2. Maximize highway use as preferred routes, followed by major thoroughfares and predominately commercially oriented local streets when strictly necessary to reach existing industrial zones.

Logistics uses proposed after January 1, 2028 must be accessible by arterial roads, major thoroughfares, or roads that predominantly serve commercially oriented uses. Truck routes, parking, and idling facility locations must be marked by conspicuous signage, and routes must be made publicly available in geographic information system (GIS) format.

Circulation elements must be updated by January 1, 2028 for cities and counties located outside of the warehouse concentration region.  Those in the warehouse concentration region are subject to an accelerated timeline and must update their circulation elements by January 1, 2026. The Attorney General is authorized to penalize noncompliant agencies with a penalty of up to $50,000 every six months until the required updates are made.

South Coast AQMD Requirements:

AB 98 requires South Coast AQMD to submit reports to the legislature in 2028 and 2033 regarding air pollutant concentrations at various distances from logistics use facilities in Riverside and San Bernardino County communities near logistics use developments. These reports are meant to assess the effectiveness of the proscribed setbacks and buffers in AB 98.

South Coast AQMD must also establish a process for receiving community input on assessing and collecting penalties from violators of the Warehouse Indirect Source Rule, and how these penalties should be spent. Community groups must contain representation from areas with high numbers of warehouse facilities.

Takeaway:

AB 98 is the first State legislation to establish regulations to address the impact of logistics uses warehouses on sensitive receptors.  The regulatory regime is complicated and will establish minimum standards to replace the patchwork of local regulations throughout the State.