Flash Report: Reorganize Department of Industrial Relations – New Leader Says

By: Bess Shapiro

During his confirmation hearing yesterday, Marty Morgenstern, Governor Jerry Brown’s choice to be Secretary of the Labor and Workforce Development Agency, told California Senators that he thinks the Department of Industrial Relations (DIR) could benefit from some slimming down. Morgenstern testified on a number of topics before the Senate Rules Committee including a re-organization within the Agency He singled out departments that are responsible for administering and regulating workers’ comp and Cal/OSHA. The Labor and Workforce Development Agency is the parent of DIR.

In response to a question from Sen. Jean Fuller (R-Bakersfield) asking when Morgenstern plans to conduct a regulatory review, Morgenstern said he needs to look first at how the Agency needs to be restructured.  He noted that the Department of Industrial Relations where most of the regulations are made is comprised of 58 divisions or “boxes” as he called them.  He brought up four divisions in Cal/OSHA and workers’ comp, but he didn’t indicate specifically which divisions or boards need to be restructured only that he needs to get some people on board to help him make the decisions.

He suggested that that there “might be too many” in Cal/OSHA and workers’ comp. “I don’t know, but it does seem like a lot.”   He said “one of the first tasks I’m going to give my new team is to try and look at the regulations and see what we can streamline….”

Sen. Tom Harmon (R-Costa Mesa) asked Morgenstern to consider establishing some sort of alternative dispute resolution (ADR) process for workers’ comp claims for state workers. “It could be strictly voluntary, but I’ve heard that there is a potential for saving many millions of dollars…if we have that kind of a program. I think it kind of falls under your jurisdiction,” Harmon said.

“In general I certainly believe in alternative dispute resolution,” Morgenstern said, adding that any process that can cut down on the cost of litigation is a good thing. “Anything I can do to help on that I will. I think it’s a very good idea.”

Numerous employer and labor groups testified in support of Morgenstern including the California Chamber of Commerce, the California Manufacturers & Technology Association, the California Professional Association of Specialty Contractors, the California Labor Federation, Service Employees International Union and the State Building & Construction Trades Council. There was no opposition.

Morgenstern was unanimously confirmed by the Senate Rules Committee.


(Filed be Bess Shapiro in Sacramento)