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(323) 652-9451On September 30, 2018, Gov. Jerry Brown signed into law several bills that greatly expand the rights of employees to pursue sexual harassment lawsuits in California. The majority of these laws require immediate attention as they become effective January 1, 2019. This discusses these laws and provides recommendations for how employers can act to avoid liability.
SB 1300 makes numerous changes to existing law with regard to liability for alleged sexual harassment. In serial form, beginning on January 1, 2019, employers will:
• Be prohibited from requiring a release of Fair Employment and Housing Act (FEHA) claims in exchange for a bonus, raise, employment or continued employment;
• Be prohibited from recovering fees and enhanced costs through use of statutory (Cal. Code of Civil Procedure §998) offers to compromise, except where the employer can show (1) the lawsuit was frivolous, unreasonable and/or without merit; or (2) the employee continued to litigate a claim after becoming aware his/her case had no merit;
• Be potentially liable for any kind of unlawful harassment by nonemployees;
• Be potentially liable even where the harassment was a single instance or “stray remark” by a non-decision-maker;
• Be less likely to prevail on a sexual harassment case through a motion for summary judgment.
The statute of limitations refers to the “window” of time following an event within which an alleged victim can bring a civil action. Claims of sexual harassment can include a claim of sexual assault, in which the victim claims he/she was sexually touched without consent, or coerced or forced to engage in a sexual act. AB 1619 expands the limitations period for sexual assault claims to 10 years after the act, or 3 years after the alleged victim discovers the injury, whichever is later.
SB 224 expands the list of professional relationships which can form the basis of a claim for sexual harassment. To the previous list, which included physician, psychotherapist, dentist and real estate agent, the bill adds individuals who present themselves as able to assist one in establishing a business, service or professional relationship. The law specifically identifies lobbyists, elected officials, directors, producers and investors.
Settlements of sexual harassment claims have historically included nondisclosure clauses, preventing the alleged victim from disclosing details about the claim and settlement. SB 820 prohibits provisions that prevent the disclosure of factual information relating to certain claims of sexual assault, sexual harassment, or discrimination based on sex, that are filed in a civil or administrative action.
The bill makes such provisions in a settlement agreement on or after January 1, 2019, void as a matter of law and against public policy. The bill creates a limited exception for a provision that shields the identity of the claimant and facts that could lead to the discovery of his or her identity, if that provision is included in the agreement at the claimant’s request.
Additionally, AB 3109 renders void and unenforceable any clause that prevents a party to a settlement agreement from testifying about alleged criminal conduct or sexual harassment in an administrative, legislative or judicial proceeding.
California law currently requires employers with 50+ employees to provide their supervisors with sexual harassment prevention training every 2 years. Effective January 1, 2020, SB 1343 requires any employer who employs 5 or more employees, including temporary or seasonal employees, to provide at least 2 hours of sexual harassment prevention training to all supervisory employees, and at least 1 hour of such training to all nonsupervisory employees, once every 2 years. The bill also requires the Department of Fair Employment and Housing (DFEH) to develop or obtain 1-hour and 2-hour online training courses on the prevention of sexual harassment in the workplace.
Many of these new laws will impact how employment lawyers do their job, and will likely make it more difficult to resolve sexual harassment claims and lawsuits without a trial. However, employers remain primarily responsible and should examine their practices to ensure they maintain a harassment-free workplace.
Consideration should be given to getting a head start on sexual harassment prevention training, including for non-supervisory personnel. Employers with questions about how to reduce their chances of being targeted by a sexual harassment claim should contact their qualified employment law counsel.
In Kilby v. CVS Pharmacy, the California Supreme Court clarified when employers must provide employees with seating at work. The applicable California state wage orders require employers to provide suitable seats to employees when the “nature of the work reasonably permits the use of seats.” Prior to the Kilby case, there was a lack of controlling precedent about the meaning of the phrase “nature of the work.”
To place the dispute into perspective, the employers argued that the decision whether seating was needed required analysis of an employee’s duties as a whole during a complete shift, as well as the layout of the workplace and the employer’s own business judgment. The employees’ position, by contrast, was that each particular task had to be examined; if any task could be performed while seated, the employer should be required to provide seating.
The Supreme Court adopted a middle ground. It held that the “nature of the work” element referred to the actual tasks performed by an employee at a particular location, rather than the “holistic” analysis urged by the employers. Focusing on the actual work done at a particular location would, according to the Court, enable courts and, presumably, employers, to determine objectively whether the “nature of the work reasonably permits the use of seats” based on a totality of the circumstances test. The circumstances to be considered include the frequency and duration of tasks as well as the feasibility and practicability of providing seating.
What Employers Should Do Given This Ruling
Recognizing the Kilby opinion is riddled with legalese and provides little clear guidance, California employers with employees who may be entitled to seating—particularly if a request has been made—should seek advice from their employment counsel.
Effective April 1, 2016, significant amendments to the California Fair Employment and Housing Act (FEHA) will take effect. These impact every employer, including out of state employers, with at least 5 workers in California. Here are the critical highlights of these amendments.
Mandatory Written Anti-Discrimination/Harassment Policy
Of greatest import, the amendments require every covered employer to have a written policy that:
In order to ensure that employees receive the written policy, employers may publish the policy through various means. These include: providing a copy to existing employees and during the hiring process, posting it in the workplace, and obtaining a written acknowledgement. Translation of the policy is required into every language that is spoken by at least 10% of the workforce.
Definitions
The amendments also contain definitions that are important in the context of gender discrimination.
Recordkeeping Requirement
Employers with 50+ employees are required to provide sexual harassment prevention training to supervisors at least every 2 years. The amendments require employers to retain materials related to this training, including sign-in sheets and course materials, for at least 2 years.
What Employers Should Do
Covered employers (5+ employees) should immediately review their policies to ensure they are in compliance with the amended regulations before April 1st. If you have any doubt whether your business is in compliance, we recommend you contact your qualified employment law counsel.
Each new year brings challenges for employers and their Human Resources management, as a slew of new laws take effect, creating new traps for the unwary. 2016 is no exception. Here is a list of four new laws (or amendments) that can impact virtually every California employer.
The New Minimum Wage is $10.00
At first, this doesn’t seem like real news, as almost everyone has known the California minimum wage has been climbing since 2014. The information important to many employers, however, is the role the enhanced minimum wage plays in classification of salaried exempt vs. non-exempt employees.
Remember that an exempt employee in California must be paid a salary that is no less than two times the state minimum wage for full-time employment. Accordingly, as the state minimum wage increases from $9.00 to $10.00 per hour, the minimum annual salary for an exempt employee increases from $37,440 to $41,600. What you should do: Review compensation for all salaried exempt employees to ensure it equates to at least $41,600 annually.
Changes to Piece-Rate Compensation Requirements
Are some or all of your employees paid according to a piece-rate method? A business school definition of piece-rate compensation is: A wage determination system in which the employee is paid for each unit of production at a fixed rate. It is common in the automotive repair and garment industries, among others.
Assembly Bill 1513 added section 226.2 to the California Labor Code. It requires employers to pay piece-rate employees a separate hourly wage for “nonproductive” time, as well as “rest and recovery” periods. These hours and pay must be separately itemized on employees’ paystubs.
An additional challenge created by the new law relates to determination of the correct rate of pay. For “rest and recovery” breaks, employees must be paid the greater of (1) the minimum wage, or (2) the employee’s average hourly wage for all time worked (exclusive of break time) during the work week. For “nonproductive” time, the employee must receive at least minimum wage. What you should do: If you have employees paid on a piece-rate basis, make sure you understand and comply with the above. If not, contact your employment lawyer to get in compliance.
California Fair Pay Act
Senate Bill 358, amends California Labor Code Section 1197.5, which prohibits an employer from paying employees of one sex less than employees of the opposite sex for “substantially similar work.” Prior to the amendment, an employee seeking to prove unequal pay had to demonstrate that he or she was not being paid at the same rate as someone of the opposite sex at the same establishment for “equal work.” As amended, an employee need only show he or she is not being paid at the same rate for “substantially similar work” as measured by a composite of skill, effort and responsibility performed under similar working conditions.
Additionally, the amended law makes it unlawful for employers to prohibit employees from disclosing their wages to others, discussing their wages or inquiring about the wages of another employee. It also creates a new private cause of action whereby an employee may bring suit in court seeking reinstatement and reimbursement for discrimination or retaliation. What you should do: Audit your compensation structure to ensure both genders are paid equally for substantially similar work. Where changes are required, you may only increase the underpaid employee. Involve your employment lawyer if you need clarification or help.
Requesting Reasonable Accommodations is a Protected Activity
Assembly Bill 987 amends the California Fair Employment and Housing Act (FEHA) to expand the protections for employees who request a reasonable accommodation for disabilities or religious beliefs, regardless whether the request is granted. This means that, once an employee has requested a reasonable accommodation for a disability or religious belief, the employer may not take an adverse employment action (i.e., discipline, reduction in hours or pay, termination) in retaliation for the accommodation request. What you should do: Be sensitive to an employee’s request for accommodation, even if s/he does not use the term “reasonable accommodation.” If an employee tells you (or you perceive) s/he is disabled or has a particular religious belief/preference that requires accommodation, take the situation seriously. It may be a good idea to consult with your employment counsel.
Conclusion
Employers should remain mindful of these changes as we embark upon a satisfying and, hopefully, productive new year!
On October 6, 2015, California Governor Jerry Brown signed Senate Bill 358, amending California’s Equal Pay Act, which prohibits an employer from paying employees of one sex less than employees of the opposite sex for “substantially similar work.” This Bulletin briefly discusses this amendment and how it could impact California employers.
What is required for an employee to prove unequal pay?
Prior to the new law, an employee seeking to prove unequal pay had to demonstrate that he or she was not being paid at the same rate as someone of the opposite sex at the same establishment for “equal work.”
The new law, effective January 1, 2016, relaxes this standard, making it much easier for an employee to prove unequal pay. Under the new law, an employee need only show he or she is not being paid at the same rate for “substantially similar work” as measured by a composite of skill, effort and responsibility performed under similar working conditions. It is not necessary that the employees of opposite sexes perform the same or equal work.
What can an employee recover?
Employees have the option of pursuing a claim through the Labor Commissioner or filing a civil lawsuit. An employee who prevails through a claim with the Labor Commissioner may recover pay differential plus an equal amount as liquidated damages. An employee who successfully sues in court may recover pay differential damages, interest, litigation costs and attorneys’ fees.
How can an employer defend a claim or suit?
Even if there is a gender-based wage differential, an employer can escape liability if it can show that the differential is based on:
These factors were included in the law, as it existed prior to the October 6th amendment. However, the fourth factor has been changed to require an employer to show with competent evidence that any difference in compensation is not sex-based, is related to the position in question and there exists a “business necessity” for the wage differential. A “business necessity” is an overriding legitimate business purpose such that the factor relied upon effectively fulfills the business purpose it is intended to serve.
Additional “Wage Transparency” requirement
As amended, the law makes it unlawful for employers to prohibit employees from disclosing their wages to others, discussing their wages or inquiring about the wages of another employee.
Extended record keeping period
The amendment extends the time period for employers to keep records pertaining to employees’ terms and conditions of employment (including wages and job classifications) from two to three years.
What Should Employers Do?
Commentators suggest this amendment may cause a significant uptick in claims and lawsuits alleging unequal pay–this remains to be seen. However, there are unquestionably steps employers should take to protect themselves against an unequal pay claim:
If you have questions about this amendment, you should consult with experienced employment law counsel.
I recognize I’m about 3 years too late with this post. The truth, however, is that employers can be forced (or strategically choose) to reduce their workforce even outside a recession.† So, without further apology, here are my 6 steps to effecting a layoff in a way that eliminates, or at least reduces, your exposure to employment-related discrimination or retaliation claims and suits:
1. Be forewarned about the WARN Acts. The biggest challenge for employers contemplating a “mass layoff,” plant closure, etc. can be WARN Act compliance. California employers are required to comply with the Federal WARN Act (29 U.S.C. 2101, et seq.) and the more rigorous California version (Cal. Labor Code Secs. 1400, et seq.). The specific ins and outs of what triggers Act compliance, exceptions and consequences are unbloggably‡ complicated. You should consult a knowledgeable employment lawyer* on this–no exceptions!
2. Offer severance in exchange for a release. I feel like a flight attendant describing how to use a seat belt, but I’m amazed that there are employers that do not premise a severance payment on execution of a release/waiver of claims. In order to “buy your peace,” the severance must give the employee something to which he/she is not already entitled. In other words, don’t propose the release after you’ve already agreed to pay severance. This kind of release/waiver agreement needs to comply with certain requirements, including timing and lack of ambiguity. You cannot demand the employee sign the waiver on the spot. Depending on the circumstances, you’ll need to allow the employee some time to consider the terms. Again, involve experienced employment counsel.*
3. Develop, and preserve evidence of, objective, nondiscriminatory criteria justifying both the need for the workforce reduction and why the affected employees were selected. Maintain this evidence for up to 4 years. I’m thinking here of meeting minutes, Power Point decks, etc.
4. Review the list of affected employees. “Issue spot” each employee to evaluate the risks associated with the layoff. These include, not only risks of a claim that an individual employee was the victim of discrimination, but also that the architecture of the reduction disparately impacts a protected class. Look at age (40+), race, gender, disability and religion, FMLA leave, etc. Here, again, use knowledgeable employment counsel* to assist in this analysis.
5. Have upper level management, one or more layers removed from immediate managers and supervisors, decide who will be affected by the layoff. This helps reduce the likelihood of claims that an individual manager had a nonobjective discriminatory or retaliatory reason to select a given employee. It also strengthens the theme that the layoff was objective and necessary, as opposed to a mere “pretext” for an unlawful termination.
6. On the day of the layoff, meet separately, in-person, with each affected employee. Ideally, have an additional manager or HR representative in the room. Resist the urge to say more than necessary about the layoff. Remember that anything said to the employee, if later believed by a judge or jury, can be used against the company if a claim or litigation results. Having the second “witness” in the room reduces the likelihood or believability of a fabrication.
Good luck. Oh, and did I mention the importance of involving experienced employment counsel?*
†Yes, I’m aware there are people far smarter than I who believe we haven’t yet escaped the recession.
‡As far as I know I coined this term.
*Shameless use of link for self-promotion is acknowledged. The question becomes whether, by pointing out and acknowledging the self-promotional use of repeated links to my LinkedIn profile which, by implication, advertises me, variously, as “experienced” and “knowledgeable” employment counsel, I am somehow absolved of the sin of shameless self-promotion, or whether, the fact that, in addition to the link, I also used this footnote to attempt to absolve myself of said shameless self-promotion, is itself equally, or even more, shameless. To quote Bill Murray, “We’re getting into a weird area here.”
