Consumer Protection

SACRAMENTO – California Attorney General Rob Bonta today issued a legal alert to remind all employers of the state-law restrictions on employer-driven debt. Employer-driven debt is a term referring to debt incurred by individuals through employment arrangements. This can include arrangements where an employer provides training, equipment, or supplies to a worker, but requires the worker to reimburse the employer for these expenses if the worker leaves their job before a certain date.

"Employer-driven debt can harm workers, consumers, and competition. California is committed to safeguarding our workers and our future through strong labor and consumer protection laws," said Attorney General Rob Bonta. "Employer-driven debt practices have raised serious concerns, potentially impacting workers' rights and exposing them to financial risks. We remind all employers in the state that these practices may violate California law. We will uphold the rights and protections of workers and consumers, and we will take any and all legal action necessary to protect Californians from these predatory practices."

The growth of employer-driven debt products can stifle competition in the labor market and force workers to remain in jobs sacrificing mobility, better wages and opportunity, and competition for labor. These debt products are prevalent across the market, including in healthcare, trucking, aviation, retail, and service industries.

The Attorney General’s office reminds employers that employer-driven debt may violate a number of California laws, including labor laws and consumer protection statutes. For instance, the Labor Code requires that employers bear the cost of necessary expenditures incurred by employees as a direct result of discharging their duties. This includes costs for mandatory job training unless the training is necessary to legally practice the workers’ profession. In addition, the Rosenthal Fair Debt Collection Practices Act prohibits an employer or its agent from engaging in unfair or deceptive acts or practices when attempting to collect on employer-driven debt. Any abusive employer-driven debt practices may violate the California Consumer Financial Protection Law. A violation of these or other statutes may constitute an independent violation of California’s Unfair Competition Law, which prohibits unlawful, unfair, or fraudulent business practices. Additionally, the U.S. Consumer Financial Protection Bureau issued a recent report illustrating the risks workers face from employer-driven debt. Workers and consumers who believe their rights have been violated may file a complaint at oag.ca.gov/report.

The legal alert can be found here. 

OAKLAND – Joining a bipartisan coalition of 32 attorneys general, California Attorney General Rob Bonta today announced his participation in the Agricultural Competition Partnership, an effort launched by the U.S. Department of Agriculture (USDA) to tackle anticompetitive market structures in agriculture and related industries that are raising prices and limiting choices for consumers and producers. U.S. Secretary of Agriculture Tom Vilsack unveiled the partnership at the White House Competition Council meeting, which marked the second anniversary of President Biden’s Executive Order on Promoting Competition.

“When it comes to preventing anticompetitive practices and protecting consumers, the Biden-Harris Administration isn’t just talking the talk; it is also walking the walk,” said Attorney General Rob Bonta. “I’m proud to be participating in USDA’s Agricultural Competition Partnership. Agriculture is a critical part of the California economy, and I am pleased to have USDA and the Biden-Harris Administration as a partner in addressing threats to competition in this sector.” 

“The Biden-Harris Administration is committed to addressing corporate consolidation and its negative effects on the U.S. economy, such as unfair competition and increased prices,” said Secretary Tom Vilsack. “By placing necessary resources where they are needed most and helping states identify and address anticompetitive and anti-consumer behavior, in partnership with federal authorities, through these cooperative agreements we can ensure a more robust and competitive agricultural sector. I’m pleased to see that a bipartisan group of states have committed to joining USDA in better protecting the fair and competitive markets that are a critical cornerstone of the American economy.” 

On December 21, 2021, Attorney General Bonta joined more than a dozen attorneys general in writing USDA to provide information and insights regarding various issues in the agriculture sector. In that letter, the attorneys general recommended that USDA establish a grant that state antitrust enforcers could access to support their efforts to investigate and bring antitrust actions in agricultural markets. On September 26, 2022, USDA issued a challenge for states to partner with USDA on competition in food and agriculture. Today’s announcement formally establishes that partnership.

Under the partnership, USDA is utilizing funds from the Consolidated Appropriations Act to provide enduring and sustainable support for attorneys general to vigorously enforce the antitrust laws for the benefits of consumers, producers, and workers in the agricultural space. Specifically, this initiative will enhance the capacity of attorneys general to conduct on-the-ground assessments of competition and consumer issues, enhance coordination between federal and state agriculture and competition authorities, create new and more independent research programs, and ultimately result in fairer and more competitive markets, and more resilient supply chains.

Focus areas of the Agricultural Competition Partnership include:

• Anticompetitive market structures and practices, as well as price gouging and other anti-consumer practices, in food, retail, meat and poultry processing, and other agriculture industries.
• Lack of choices for consumers and producers.
• Conflicts of interest, misuse of intellectual property, and anticompetitive barriers across the food and agriculture supply chains, such as in seed markets.

USDA is partnering with the Center for State Enforcement of Antitrust and Consumer Protection Laws, a neutral, nonpartisan organization that provides similar support to the states. The State Center is establishing the necessary mechanisms for the attorneys general to cooperate with USDA. Additionally, USDA has engaged the American Antitrust Institute to be a resource for the states on this project.

OAKLAND – California Attorney General Rob Bonta today issued the following statement in response to the new proposed Merger Guidelines unveiled by the U.S. Department of Justice and the Federal Trade Commission:

“Merger Guidelines serve a critical purpose: They inform the public on how our federal partners identify potentially illegal mergers,” said Attorney General Bonta. “Like so many Americans, I am deeply concerned about the increasing concentration and reach of corporate power in so few hands. Competition laws protect the lifeblood of our economy, and I am pleased to be joined by our federal partners in vigorous enforcement of these laws. The proposed updated Merger Guidelines announced today are a significant step forward. I applaud the U.S. Department of Justice and Federal Trade Commission for taking a comprehensive look at their Merger Guidelines and proposing updates that are designed to foster innovation while reflecting the complex realities of our diverse economy. I am especially pleased that the guidelines expressly recognize that workers and labor organizations can provide helpful information, including regarding working conditions and the individualized needs of workers in the market in question. The California Department of Justice has long fought to protect competition, and we will continue this important work to ensure that our markets serve all Californians.”

OAKLAND — California Attorney General Rob Bonta today joined the Biden Administration and state attorneys general nationwide in highlighting a slew of actions taken to combat the scourge of illegal telemarketing, including robocalls. The Federal Trade Commission’s (FTC) “Operation Stop Scam Calls” is a bipartisan initiative that draws attention to efforts by law enforcement agencies across the U.S. to crack down on illegal telemarketing targeting operations. The California Department of Justice (DOJ) helped launch the Anti-Robocall Litigation Task Force last year and is actively fighting to protect consumers from predatory telemarketers. Among DOJ’s efforts highlighted in “Operation Stop Scam Calls” is a lawsuit filed against a national company over billions of illegal robocalls, and a successful judgment in a case against a Southern California retail chain that defrauded its largely Latino immigrant customer base through scam telemarketing calls and other misconduct.

"Unwanted telemarketing calls, including robocalls, are more than just a nuisance — they’re often illegal," said Attorney General Rob Bonta. "Not only are they a source of everyday annoyance for Californians, they can also lead to serious financial harm. California is proud to stand with the Biden Administration and with partners across the nation in our efforts to end the menace of scam calls and hold the bad actors behind them accountable."

“Today, government agencies at all levels are united in fighting the scourge of illegal telemarketing. We are taking action against those who trick people into phony consent to receive these calls and those who make it easy and cheap to place these calls,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC and its law enforcement partners will not rest in the fight against illegal telemarketing.”

DOJ is committed to safeguarding Californians from bad actors who target them with deceptive marketing practices and illegal robocalls.

• In May, DOJ announced a multistate lawsuit against telecommunications company Avid Telecom for allegedly initiating and facilitating billions of unlawful robocalls in California and around the country. Those robocalls included Social Security Administration scams, Medicare scams, and employment scams.
• In February, DOJ secured a court ruling finding that Curacao, a retail store chain with 10 locations in Southern California, solicited and telemarketed illegal insurance and defrauded its largely Latino immigrant customer base. The court imposed nearly $8 million in civil penalties against both the company and its owner for illegal sales of insurance products.
• In March 2022, DOJ secured a court ruling, ordering Ashford University, an online school, and its parent company Zovio, Inc., to pay more than $22.37 million in penalties, for, among other things, making tens of thousands of deceptive telemarketing calls to prospective students to get them to enroll.
• In December 2021, DOJ announced the criminal sentencing of four individuals for their roles in perpetrating a scam that preyed on borrowers struggling to repay their student loans. The scheme relied on repeated telephone solicitations to distressed borrowers to convince them to sign up for costly, but worthless, loan-payment reduction plans.

California’s actions, along with the work of its state and federal partners, including the FTC, are aimed at helping consumers block unwanted telemarketing calls and holding predatory telemarketers accountable.

Advice related to robocalls and other unwanted calls, as well as information on how to spot and avoid phone scams can be found at ftc.gov/calls, which is also available in Spanish at ftc.gov/llamadas. The FTC also has a new educational webpage at ftc.gov/RobocallScams that includes examples of real illegal robocalls and steps people can take to avoid robocall scams. 

OAKLAND – California Attorney General Rob Bonta today issued legal guidance to local governments, reminding them of the strict requirements under state law for enacting so-called “urgency zoning ordinances.” The Housing Justice Team within the California Department of Justice has observed that some local jurisdictions have responded to state housing laws passed in recent years by enacting urgency zoning ordinances in an apparent attempt to limit or circumvent state housing mandates. Under California Government Code Section 65858, urgency zoning ordinances require written “legislative findings that there is a current and immediate threat to the public health, safety, or welfare” demanding immediate action. In today’s guidance, Attorney General Bonta underscores that local governments should review any urgency zoning ordinances they have enacted, or are considering enacting, for compliance with those limited emergency circumstances. 

“Under California law, urgency zoning ordinances can only be enacted if a high bar is met. Unfortunately, we are seeing urgency zoning ordinances that fall short of meeting that high bar,” said Attorney General Bonta. “As I’ve said time and again, every community must do its part to build housing — unless there's a real emergency, they cannot use urgency zoning ordinances to stop housing developments. I encourage local governments take a good look at their urgency zoning ordinances for compliance with the guidance we are providing today. My office is committed to taking legal action against those who frustrate California's goals of increasing housing supply and affordability.”

Among the state housing laws providing for streamlined approval of certain housing developments are Senate Bill 9 (SB 9) and Assembly Bill 2011 (AB 2011). Under SB 9, local agencies must provide a “ministerial” approval process for any proposed duplex within a single-family residential zone, or for any proposed lot split of a single-family residential parcel. Under AB 2011, which took effect July 1, 2023, “ministerial” review is similarly required for affordable housing projects located in commercial zones. Ministerial review is where a public official, such as local planning staff, ensures that the proposed development meets all the applicable objective standards for the proposed action but uses no special discretion or judgment in reaching a decision.

In today's guidance, Attorney General Bonta includes the following information:

• Written legislative findings are required to support claims that SB 9 or AB 2011’s requirements could pose a threat to public health, safety, or welfare. Such findings must be made with specificity; otherwise, an urgency zoning ordinance is likely invalid. Laws requiring ministerial approval of housing development, such as SB 9 or AB 2011, do not by themselves constitute a current and immediate threat to public health, safety, or welfare. Generalized concerns about visual or aesthetic standards are insufficient to support an urgency ordinance.
• In addition, urgency zoning ordinances must demonstrate immediate need, meaning that local agencies face immediate threats.
• To keep an urgency zoning ordinance prohibiting multifamily housing in place beyond 45 days, local jurisdictions must identify a significant, quantifiable, direct, and unavoidable impact based on objective policies in existence at the time the ordinance is adopted. Local jurisdictions must also demonstrate that there is no feasible alternative that would mitigate or avoid the adverse impact “as well or better, with a less burdensome or restrictive effect,” than the urgency ordinance.

Attorney General Bonta is committed to enforcing California’s housing laws and ensuring that communities throughout the state work in good faith to build their fair share of housing. On November 3, 2021, he announced the creation of a Housing Justice Team within the California Department of Justice. On April 1, 2022, he issued a consumer alert reminding California’s tenants of their rights and protections under state law. On July 13, 2022, he issued legal guidance about steps law enforcement officers should take to prevent and respond to unlawful lockouts and self-help evictions. On March 9, 2023, he filed a lawsuit against the City of Huntington Beach for violating state housing laws. On May 1, 2023, he filed a lawsuit against the City of Elk Grove, challenging the city’s denial of a proposed supportive housing project in the city’s Old Town Special Planning Area. On June 16, 2023, he announced a settlement against Green Valley Corporation, a San Jose-based housing developer and property manager, to resolve allegations that the company violated the California Tenant Protection Act by issuing unlawful rent increases to nearly 20 of its employee tenants and serving unlawful eviction notices to six of those employee tenants. On June 27, 2023, he announced filing a comment letter that identifies serious legal issues concerning the proposed Airport Gateway Specific Plan in the Inland Empire Cities of Highland and San Bernardino.

A copy of the guidance can be found here.

OAKLAND – California Attorney General Rob Bonta today announced that he joined a multistate coalition in submitting a comment letter to the Consumer Financial Protection Bureau (CFPB), wholly endorsing its recently issued policy statement on abusive conduct in consumer financial markets. Signed into law by President Barack Obama following the 2008 financial crisis, the Dodd-Frank Wall Street Reform and Consumer Protection Act prohibits “any unfair, deceptive, or abusive act or practice[.]” On April 3, 2023, the CFPB issued a policy statement to provide guidance on the elements of abusive acts or practices that violate the Dodd-Frank Act, and explain how government enforcers, like attorneys general, can identify such unlawful conduct. The CFPB also announced it was seeking public comment on its policy statement, adding that it may revise the policy statement as appropriate. The letter by the attorneys general responds to that request for public comment. Policy statements are meant to serve as a road map and to provide guidance on a particular issue. 

“In the nearly 13 years that the Dodd-Frank Act has been in place, the CFPB has made a tremendous difference for American consumers. The policy statement it has issued on abusive conduct is a continuation of that critical purpose,” said Attorney General Bonta. “From banks to payday lenders, abusive conduct has no place in our consumer financial markets, and the policy statement provides helpful guidance for attorneys general on how we can better tackle it. I look forward to continuing the strong state-federal partnership we have with the CFPB.” 

In their letter, the attorneys general commend the CFPB for:

• Providing a clear analytical framework for what constitutes abusive acts or practices. The policy statement describes that abusive acts or practices under the Consumer Financial Protection Act (CFPA), which is part of the Dodd-Frank Act, generally fall into two categories: (1) obscuring important features of a product or service, or (2) leveraging certain circumstances to take an unreasonable advantage.
• Using its existing enforcement actions as examples of illegal abusive conduct. The policy statement, for instance, references Wells Fargo’s now-infamous acts of opening unauthorized deposit accounts as having taken an unreasonable advantage of consumers.
• Emphasizing flexibility and guidance — as opposed to definitions and limitations — throughout its policy statement, given that attorneys general play a key role in enforcement of the state and federal consumer protection laws, including the CFPA.
• Accounting for the realities of modern consumer markets, including by clarifying that both acts and omissions can materially interfere with the ability of a consumer to understand terms and conditions. For example, companies often use fine print or complex language to limit an individual’s understanding of a term or condition. 

In submitting the comment letter, Attorney General Bonta joins the attorneys general of Arizona, Colorado, Connecticut, the District of Columbia, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, and Wisconsin.

A copy of the comment letter can be found here.

OAKLAND – California Attorney General Rob Bonta issued the following statement today in response to JetBlue’s decision to terminate the Northeast Alliance, an anticompetitive joint venture with American Airlines that threatened competition in an industry already experiencing the negative impacts of market consolidation. On May 19, 2023, Attorney General Bonta, along with the U.S. Department of Justice and a bipartisan coalition of states, secured a decision blocking the two airlines from continuing and from further implementing the Northeast Alliance.

“No matter how JetBlue and American Airlines tried to spin it, the Northeast Alliance benefitted only their bottom line. Consumers were merely an afterthought,” said Attorney General Bonta. “We need more, not less, competition in the airline industry, so I welcome JetBlue’s decision to end its participation in the Northeast Alliance. As many families continue to feel the burden of inflation, I'm committed to vigorously enforcing state and federal antitrust laws to lower prices for consumers.”

SACRAMENTO – California Attorney General Rob Bonta today issued a statement following the Assembly Judiciary Committee’s vote to approve Senate Bill 680 (SB 680), which would hold large social media companies accountable for causing specified harms to child users on their platforms. The bill was authored by Senator Nancy Skinner (D-Berkeley) and is being sponsored by Attorney General Bonta.  

“Every day, children in California face real and immediate harms on social media platforms,” said Attorney General Rob Bonta. “It’s great news that Senator Skinner’s bill has been approved by the Assembly Judiciary Committee. Large social media companies are harming our children's well-being and mental health, and SB 680 is an important tool in our collective efforts to hold those companies accountable.” 

“Thank you, AG Bonta, for your sponsorship of SB 680, 'Holding Social Media Accountable,' and your recognition that Californians across our state are fed up with social media platforms harming our children,” said Senator Nancy Skinner. “These platforms are designed to addict users, with our children particularly susceptible. Further, design features used by these platforms also target our children with material that causes eating disorders and other harm, as well as information on how to buy dangerous narcotics and illegal firearms. SB 680 will provide the Attorney General’s Office, along with other public prosecutors, the legal tools needed to curb these harmful practices.”

SB 680 would prohibit large social media companies from knowingly or negligently using a design, algorithm, or feature that the company knew, or by which the exercise of reasonable care should have known, causes child users to experience addiction to the social media platform, develop an eating disorder, or inflict harm on themselves or others. Social media companies could also be held liable for sending child users information regarding how to obtain firearms or controlled substances, or how to die by suicide, if the child acts on that information. 

SB 680 authorizes civil enforcement by the Attorney General and other public prosecutors, and provides for a civil penalty of up to $250,000 for knowing and willful violations of the bill. The bill applies only to social media companies that generated over $100 million in gross revenue during the preceding calendar year. 

Attorney General Bonta is committed to holding social media companies accountable, particularly when their actions may harm California’s youngest residents. He has announced nationwide investigations into whether Meta and TikTok provided and promoted their social media platforms to children and young adults, despite knowing that such use is associated with increased risks of physical and mental health harm to young people. Attorney General Bonta also co-led a bipartisan coalition in expressing support for hearings in the U.S. Senate on “Protecting Kids Online: Facebook, Instagram, and Mental Health Harms.” Further, he joined 43 attorneys general in urging Meta to abandon plans to launch a version of Instagram for children under the age of 13. Following heavy criticism, Meta announced that it would pause development of the new platform.

OAKLAND – As part of a coalition of 26 attorneys general, California Attorney General Rob Bonta today announced that he has filed a comment letter supporting the Federal Trade Commission's (FTC) proposed improvements to its existing Negative Option Rule. “Negative option offers” are a business tactic of interpreting a consumer’s silence — or failure to take affirmative action — as acceptance of an offer, often in the form of a recurring, unwanted subscription that is difficult or impossible to cancel. These deceptive practices have been a source of consumer harm for decades. The FTC’s proposed changes significantly broaden the requirements and risks for businesses using negative option features and will allow consumers to more easily cancel unwanted subscriptions and memberships.

“If consumers want to cancel a subscription, they should not have to go on a fishing expedition,” said Attorney General Bonta. “Just as businesses make it easy to sign up for a subscription, they need to respect customers who later want to end that subscription. Deception and dark patterns have no place in consumer markets, and the proposed Negative Option Rule is the change consumers have been rightly demanding for years. I’m proud to support this effort by the FTC and to offer additional recommendations alongside my fellow attorneys general.”

The FTC announced the proposed updates to its Negative Option Rule on March 23, 2023 and asked for public comment to help inform its decision-making. The coalition of attorneys general is submitting a supportive comment letter in response to that request. The proposed Negative Option Rule would, among other things:

• Regulate all additional types of negative-option practices, including automatic renewals, free trial offers, and continuity plans;
• Cover all offers made in all media, “including, but not limited to the internet, telephone, in-print, and in-person transactions”;
• Require businesses to provide a simple mechanism for consumers to cancel a negative option subscription;
• Prohibit misrepresentations of any material fact regarding the entire agreement, not just facts related to a negative option feature;
• Require businesses to obtain the consumer’s express informed consent before charging the consumer, including obtaining the consumer’s affirmative consent to the negative- option feature separate from any other portion of the offer; and
• Preserve state authority to regulate negative-option marketing and to enact greater protections.

In their letter, the attorneys general express support for the above protections and propose additional clarifications and improvements. The attorneys general urge the FTC to:

• Require businesses offering free trials to obtain an additional round of consent before charging a consumer at the completion of the free trial;
• Clarify that cancellation mechanisms must be cost effective, timely, and easy to use;
• Broaden the forms that a consumer can cancel a recurring contract; and
• Require businesses to provide negative option reminders in additional forms, not just through the same medium that the consumer used to consent to the negative-option feature in the first place.

California already has in place a negative option statute, which makes it unlawful, in part, for a business to “[f]ail to present the automatic renewal offer terms or continuous service offer terms in a clear and conspicuous manner “ and to “[f]ail to provide an acknowledgment that includes the automatic renewal or continuous service offer terms, cancellation policy, and information regarding how to cancel in a manner that is capable of being retained by the consumer.” The FTC’s proposed amendments to its Negative Option Rule would set clear, enforceable requirements nationwide for all negative-option practices in all media, while still allowing states — like California — to maintain and enact stricter laws in this area. 

In sending this comment letter, Attorney General Bonta joins the attorneys general of Alabama, Arizona, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Jersey, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Vermont, Washington, and Wisconsin. 

A copy of the comment letter can be found here.

Represents first public action by Attorney General’s office enforcing Tenant Protection Act, brings financial relief to impacted individuals

SAN FRANCISCO – California Attorney General Rob Bonta today announced a settlement against Green Valley Corporation, a San Jose-based housing developer and property manager also known as Swenson Builders, to resolve allegations that the company violated the California Tenant Protection Act (TPA) by issuing unlawful rent increases to nearly 20 of its employee tenants and serving unlawful eviction notices to six of those employee tenants. Co-authored by Attorney General Bonta during his time as a state assemblymember, the TPA was signed into law by Governor Gavin Newsom in 2019. It created significant new protections for most tenants, including limiting rent increases and prohibiting landlords from evicting tenants without just cause. As part of the settlement, Green Valley will pay a total of $391,130 and be required to take specific actions to ensure compliance with the TPA.

“I co-authored the Tenant Protection Act during my time as an assemblymember because of the urgency of California’s housing crisis. As Attorney General, I still feel that same sense of urgency, making today especially meaningful,” said Attorney General Bonta. “Today’s settlement represents the first public action by the California Department of Justice in which it is enforcing the Tenant Protection Act. Because of that critical legislation, impacted Green Valley employee tenants are getting financial relief. In addition, they are being protected from skyrocketing rent increases and evictions without just cause, including pretextual evictions that do not meet the Act’s requirements. There should be no doubt: Tenants have housing rights in California, and we have your back.”
 
While Green Valley rents most of its properties to tenants with no employment affiliation with it, it also has some employee tenants, for whom it was keeping rents well below market rates. However, after receiving credible complaints in late 2021 about employee-tenant rent increases, the California Attorney General’s Office launched an investigation into Green Valley. The investigation revealed that Green Valley’s rent increases violated the TPA’s rent-increase cap for nearly 20 employee tenants, whose rents were increased by an average of 151%, and that Green Valley sent eviction notices to six of those employee tenants that failed to meet the TPA’s requirements for just cause evictions. 
  
Under today’s settlement, Green Valley:

• Must pay $391,130, comprised of $60,000 in penalties and $331,130 in restitution to 17 employee tenants who were impacted by its acts. Specifically, Green Valley is refunding 15 months of overpaid rent to the employee tenants who paid the unlawful increases. For the employee tenants who moved out due to the rent increases or eviction notices, Green Valley will pay 15 months’ worth of the difference between their lawful rent amounts and the estimated fair market value of the new units to which they relocated.
• Has already restored, as a result of this investigation, lawful rental rates for the three employee tenants who paid the unlawful rent increases and continue to rent from Green Valley;
• Cannot retaliate against its employee tenants;
• Must provide annual trainings, for the next five years, to relevant staff about landlord-tenant and fair housing laws as well as provide annual reports to the California Attorney General’s office regarding those trainings as well as regarding any rent increases and eviction notices to any employee tenants;
• Must fully comply with the TPA and other California tenant protection laws; and  
• Must provide its employee tenants with the same rights and protections granted to other tenants, such as those provided by the TPA. 

Employee tenants — individuals who both work for and have residential leases with a company — are not exempted from coverage under the TPA. The TPA prohibits landlords from raising rent more than 10% total or 5% plus the percentage change in the cost of living, whichever is lower, over a 12-month period. It also requires landlords to have just cause for eviction and specifies what constitutes a just cause. For example, a landlord may evict a tenant if they intend to substantially remodel the property. However, substantial remodel requires the replacement or substantial modification of structural, electrical, plumbing, or mechanical systems that requires a government permit, or the abatement of hazardous materials, that cannot reasonably be accomplished safely with the tenant in place and requires the tenant to vacate the unit for 30 or more days. A landlord should therefore be able to show that they obtained estimates from licensed contractors about the scope and duration of work, that they obtained permits for the work, and that the work could not be performed safely and diligently without requiring the tenant to vacate for at least 30 days.
 
Attorney General Bonta remains committed to upholding protections for California renters. In May 2023, he filed a lawsuit against the City of Elk Grove, challenging the city’s denial of a proposed supportive housing project in the city’s Old Town Special Planning Area. In March 2023, he filed a lawsuit against the City of Huntington Beach for violating state housing laws. In July 2022, he issued legal guidance about steps law enforcement officers should take to prevent and respond to unlawful lockouts and self-help evictions. In April 2022, he issued a consumer alert reminding California’s tenants of their rights and protections under state law. In November 2021, he announced the creation of a Housing Strike Force — now called the Housing Justice Team — within the California Department of Justice.
 
Members of the public are encouraged to visit the California Department of Justice’s Housing Portal and HCD’s website for more resources and information aimed at supporting access to housing. If you believe your landlord has violated the law, you can file a report online at www.oag.ca.gov/report. Tenants who need legal help are encouraged to visit www.lawhelpca.org to find legal aid resources in their communities.
 
A copy of the complaint and judgment, which details the aforementioned settlement terms, can be found here and here.