Thought Leadership 10.02.18
Legislation requires California public companies to have at least one woman director by the end of 2019.
On September 30, 2018, Governor Jerry Brown signed a slew of bills into law in response to the “#MeToo” movement. As more fully set forth below, these new laws make it easier for employees to assert sexual harassment claims, increase anti-harassment training requirements, and place limitations on release of claims and what can be included in such releases.
Sexual Harassment Claims (effective Jan. 1, 2019)
SB 1300 amends the Government Code to make it easier for California employees to assert sexual harassment lawsuits against their employers. The law has several provisions:
- Under Federal law, and before the measure’s passage, harassment must have been “severe or pervasive” in order to constitute actionable conduct, a legal standard outlined in Brooks v. City of San Mateo, 229 F.3d 917 (9th Cir. 2000). Under the new law, the legislature has expressed its intent that an employee need only prove that “a reasonable person subjected to the discriminatory conduct would find…that the harassment so altered working conditions as to make it more difficult to do the job.” Harris v. Forklift Systems, 510 U.S. 17, 26 (1993) (Ruth Bader Ginsburg concurrence).
- According to the expressed legislative intent, a “single incident of harassing conduct” may be sufficient to create a triable issue regarding the existence of a hostile work environment. If the harassing conduct has unreasonably interfered with the employee’s work performance or created an intimidating, hostile, or offensive working environment, the employee may pursue a valid sexual harassment claim.
- The Legislature also intends that harassment cases are rarely appropriate for disposition on summary judgment. Hostile working environment cases involve issues “not determinable on paper.”
- The legislature intends that a “stray remark” uttered by a non-decision maker may be relevant, circumstantial evidence of discrimination, affirming the decision in Reid v. Google Inc., 50 Cal 4th 512 (2010) rejecting the stray remarks doctrine.
- A defendant employer cannot recover attorneys’ fees and costs if it prevails on a claim under the Fair Employment and Housing Act (FEHA) unless the court finds that the plaintiffs action was “frivolous, unreasonable or totally without foundation,” even if the plaintiff rejects a statutory offer of settlement and fails to obtain a more favorable judgement at trial.
- Employers may not, in exchange for a raise or bonus, or as a condition of employment, require the execution of a release of a claim or right under the FEHA.
- Employers may not require an employee to sign a non-disparagement agreement or other document that denies the employee the right to disclose information about unlawful acts in the workplace. These prohibitions do not apply to negotiated settlements of FEHA claims that have been asserted either internally or externally (a civil action or administrative claim) by an employee, but see below regarding separate legislation concerning confidentiality restrictions in settlement agreements.
- An employer may provide bystander intervention training that includes practical guidance on how to enable bystanders to recognize potentially problematic behaviors. This practice is optional, but clearly recommended.
Sexual Harassment Prevention Training (effective Jan. 1, 2020)
Under SB 1343, California employers with five or more employees must provide harassment prevention training to all employees every two years. At least two hours are required of all supervisory employees and at least one hour for all nonsupervisory employees, this includes seasonal and temporary employees. Previously, California law mandated that only employers with 50 or more employees provide such training and the employers need only train managers. Further, employers must publicly display an information sheet outlining the illegality of sexual harassment, its definition, a description of sexual harassment utilizing examples, among numerous other requirements. Employers may obtain a compliant information sheet from the Department of Fair Employment and Housing. This new law goes into effect Jan. 1, 2020.
The new law requires that the Department of Fair Employment and Housing (DFEH) develop or obtain online training courses appropriate for supervisor and non-supervisor employees and make them available on the DFEH website. Employers are not required to use the DFEH materials, but may develop their own training materials.
Non-Disclosure Provisions in Settlement Agreements (effective Jan. 1, 2019)
SB 820 makes it unlawful for settlement agreements to include confidentiality provisions that deny a person’s right to disclose certain information about unlawful workplace acts, when such an agreement is reached after the filing of a civil or administration action against employers and/or harassers. Starting Jan. 1, 2019, no provision may prevent the disclosure of factual information concerning:
Any agreement containing a provision preventing disclosure of the above-mentioned factual information will be considered unenforceable and contrary to public policy. This non-disclosure requirement does not apply when harassment claims are settled pre-litigation, before any administrative or civil action has been filed.
Notably, claimants, at their request, can require a provision that shields the identity and all facts that could lead to the discovery of their identity, unless a government agency or public official is a party to the agreement.
Full text of SB 820 may be found here. The full text of SB 826 mandating women on public company boards may be found here, and additional information regarding the same can be found in our previous Client Alert.
Although California remains at the forefront of legislation aimed at preventing harassment, the Governor vetoed certain legislation that has found favor in some other states or cities. The vetoed legislation includes a bill that would have banned pre-dispute arbitration agreements covering harassment claims. Similar bills passed in certain other states, but it is Governor Brown’s view that such bans are preempted by the Federal Arbitration Act. He also vetoed a bill that would have required employers with fifty or more employees to maintain records of complaints alleging sexual harassment for at least five years after the complainant’s last date of employment. The Governor found this time expansion unwarranted given California’s existing laws requiring personnel records to be maintained for “suitable periods of time.” He also rejected Legislation that would have extended the statute of limitation for claims under the Fair Employment Act from one to three years.
California’s new laws make it much more difficult to defend claims of harassment and to settle such actions on favorable terms, making preventative measures even more important. As a result, California employers should ensure all discrimination, retaliation and anti-harassment policies are up-to-date and readily understood by all. Employers should fully inform all employees of company anti-harassment policies and provide the requisite trainings, regardless of the employee’s job title. Such training should include bystander training that gives employees the tools to recognize and intervene when the employees become aware of problematic behavior. Employees should also be trained that their identities may not be protected if they engage in acts that constitute harassment. Employers should not wait until 2020 to undertake this training; plaintiffs will immediately urge courts to apply the lowered legal standard in pursuing these claims as set forth in the legislative statement of intent. Employers should act as soon as possible to prevent harassment claims from being asserted.
It has become increasingly more important that an employer take effective, timely action when it becomes aware of any problematic behaviors by employees, vendors, or clients. Questionable actions that may have at one time seemed trivial may end up playing a large role in a legal claim that will not be easy to resolve. Thus, employers should review their investigation practices and procedures to ensure they are designed to promptly and fairly investigate all internal claims and concerns.
Finally, employers should review their release agreements and non-disparagement agreements to ensure they comply with the new laws. Pre-suit non-disparagement agreements are now both limited by the National Labor Relations Act (which allows non-supervisory employees to engage in protected concerted activity) and by SB 1300, which prohibits agreements that bar disclosure of unlawful activities in the work place. Settlement agreements entered into after a formal claim has been filed with the administrative agency or in court cannot include a non-disclosure provision when the claim pertains to harassment or discrimination based on sex or related causes of action.