By Shane Cahill and Douglas Melton
With the New Year comes new legislation affecting California employers. Below is a summary of the new laws for 2019 likely to impact your business.
Anti-Harassment Training (SB 1343):
Under prior law, businesses with 50 or more employees were required to provide supervisory employees with two hours of anti-harassment training every two years. Under SB 1343, employers with five or more employees must now provide antiharassment training to all employees. The first round of training must be completed by January 1, 2020 and training must be repeated at least every two years.
Confidential Settlement Agreements (SB 820):
This law, which applies to all settlement agreements entered into on or after January 1, 2019, prohibits use of confidentiality provisions that prevent disclosure of “factual information related to” claims of sexual assault, sexual harassment, harassment or discrimination based on sex, or retaliation for filing such a claim. The law applies to any “claim filed in a civil action or complaint filed in an administrative action….” As such, the law does not appear to apply to settlement agreements entered before such claims or complaints are filed. Importantly, SB 820 does not prohibit enforcement of a confidentiality provision that “precludes the disclosure of the amount paid in a settlement of a claim.” That is, employers may still insist on confidentiality related to the sum of money paid to settle sexual harassment claims. Settlement agreements may also contain “a provision that shields the identity of the claimant and all facts that could lead to the discovery of his or her identity,” provided the claimant requests such a provision. There is no similar protection for the accused.
Non-Cooperation Clauses (AB 3109):
This law is likewise intended to prevent businesses from covering up sexual harassment claims through settlements. AB 3109 makes any provision in a contract or settlement agreement void and unenforceable if it waives a party’s right to testify in an administrative, legislative, or judicial proceeding concerning alleged criminal conduct or sexual harassment.
Unlawful Discrimination & Harassment Related Employment Practices (SB 1300):
Under the California Fair Employment & Housing Act (FEHA), employers are liable for failing to prevent or remedy sexual harassment of employees by non-employees if the employer knows, or should have known, of the misconduct. This law expands an employer’s potential liability for the acts of nonemployees with respect to all forms of unlawful harassment (e.g., racial harassment). The law encourages, but does not require, employers to provide bystander intervention training (i.e., training on how employees can intervene to stop acts of harassment they witness).
SB 1300 also prohibits employers, in exchange for a raise or bonus, or as a condition of employment of continued employment, from requiring the execution of a release of a claim or right under FEHA, or from requiring an employee to sign a nondisparagement agreement or other document that purports to deny the employee the right to disclose information about unlawful acts in the workplace, including, but not limited to, sexual harassment. The law does not define what constitutes a raise or a bonus. As such, it remains to be seen whether courts will apply the law to employee stockoption-purchase or share-offering plans. Regardless, the law does not apply to “a negotiated settlement agreement to resolve an underlying claim … that has been filed by an employee in court, before an administrative agency, alternative dispute resolution forum, or through an employer’s internal complaint process,” provided the agreement is voluntary and provides valuable consideration.
SB 1300 also declares the standard of review courts must apply when evaluating sexual-harassment claims, making it unlikely that such claims will be disposed of on pre-trial motions. Indeed, the legislature declared that “harassment cases are rarely appropriate for disposition on summary judgment.” Even a single incident of harassing conduct may be sufficient to create a triable issue regarding the existence of a hostile work environment. Moreover, in rejecting the so-called “stray remarks” doctrine, the legislature declared that a discriminatory remark, even if not made directly in the context of an employment decision or if uttered by a non-decision maker, may be relevant in harassment and discrimination cases.
Non-Employer Harassment Liability (SB 224):
Under existing law, various professionals and businesses may be liable for sexual harassment if the plaintiff proves there is a business, service, or professional relationship between the plaintiff and defendant and there is an inability by the plaintiff to easily terminate the relationship. SB 224 expands the law’s coverage to a cause of action for sexual harassment when the plaintiff proves, among other things, that the defendant holds himself or herself out as being able to help the plaintiff establish a business, service, or professional relationship with the defendant or a third party. Moreover, under the new law, plaintiffs no longer need to prove there is an inability to easily terminate the relationship.
Privileged Communications Related to Harassment Complaints (AB 2770): Existing law makes certain publications and communications privileged and protected from civil actions for defamation, including certain communications concerning the job performance or qualifications of an applicant for employment that are made without malice by a current or former employer to a prospective employer. Existing law also authorizes an employer to answer whether or not the employer would rehire an employee.
AB 2770 extends the scope of privileged communications to sexual-harassment complaints made by an employee, without malice, to an employer based on credible evidence and to communications between the employer and interested persons regarding a complaint of sexual harassment. The new law also authorizes an employer to answer, without malice, whether the employer would rehire an employee and whether or not a decision to not rehire is based on the employer’s determination that the former employee engaged in sexual harassment.
Salary-History Inquiries (AB 2282):
In 2018, California enacted legislation prohibiting employers from inquiring into or relying on an applicant’s salary history as a factor in determining whether to offer employment or what salary to offer. The law also required employers upon reasonable request to provide applicants the pay scale for the position sought. AB 2282 defines the terms “pay scale,” “reasonable request,” and “applicant” for purposes of this provision. Also under the amended statute, employers need not provide pay scales to all applicants or to current employees; employers need only provide pay scales to applicants who have completed at least one interview.
Finally, AB 2282 addresses confusion about whether employers can ask applicants about their salary expectations. Employers may make such inquiries. The law further clarifies that employers may rely on an existing employee’s salary history when making compensation decisions as long as any wage differential resulting from that compensation decision that would otherwise be prohibited under California’s Equal Pay Act is justified by one or more specified factors, including a seniority system or a merit system.
Criminal-History Inquires (SB 1412):
This law clarifies existing law and allows employers conducting pre-employment criminal background checks to obtain information regarding judicially sealed or expunged convictions if the employer is required to do so under local, state, or federal law. SB 1412, however, limits such background checks to a “particular conviction” that is either required by state or federal law to be reviewed or that would, under such law, preclude the applicant from holding the position sought.
Female Representation Required on Boards of Directors (SB 826):
This controversial, first-of-its kind legislation requires publically held corporations with principal executive offices in California to include women directors on their boards. To avoid costly penalties ranging between $100,000 and $300,000, covered corporations must have one female director on their boards by the end of 2019. By the end of 2021, boards with five or more directors must have two female members and boards with six or more directors must have three female members.
Contractor Liability for Wages (AB 1565):
Last year, California enacted AB 1701, which imposes liability on direct contractors in the construction trades for a subcontractor’s failure to pay the wages of, or provide certain benefits to, laborers the subcontractor employed. To allow direct contractors to monitor subcontractors’ compliance with their wage and hour/benefits obligations, AB 1701 empowered direct contractors to obtain subcontractor payroll records. AB 1565 now strikes language in AB 1701, which provided that the direct contractor’s liability for unpaid wages or benefits was in addition to any other existing rights and remedies. Also, for contracts entered into on or after January 1, 2019, the law requires a direct contractor to include a specific provision in the contract that identifies the documents or information the contractor will require the subcontractor to produce before the contractor may withhold any disputed payments from the subcontractor as a penalty for its failure to provide the specified documents or information.
Human-Trafficking Training Requirements (SB 970):
Under SB 970, businesses operating hotels or motels must provide employees with “at least 20 minutes of classroom or other effective interactive training and education regarding human trafficking awareness.” Training, which must address specific topics and be provided to employees who are likely to come into contact with victims, must be completed by January 1, 2020.
Lactation Accommodation (AB 1976):
Under this law, employers must make reasonable efforts to provide a room or location for lactation other than a bathroom. An employer will be deemed to be in compliance with the law if it makes available a temporary lactation location that meets specified conditions, including that the temporary lactation location be used only for lactation purposes while an employee expresses milk. The law provides an exception for business that can demonstrate to the Department of Industrial Relations that compliance with the law would impose an “undue hardship.”
Conclusion:
Employers should immediately review their impacted policies and procedures for compliance with these new laws. If you have questions about California’s new employment laws and how they might impact your business, contact our Employment Law Group.