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:

• Lists all FEHA protected categories (race, religious creed, color, national origin, ancestry, physical/mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation and military and/or veteran status).
• Specifies that employees are protected from discrimination or harassment from any workplace source, including third parties (vendors, customers).
• Provides a confidential complaint process that ensures a timely response, impartial investigation by qualified personnel, documentation and tracking, appropriate remedial actions and resolutions, and timely closure.
• Provides avenues for complaint other than to a direct supervisor.
• Requires supervisors to report complaints to a designated employer representative.
• States that employees will not be exposed to retaliation for making a complaint or participating in a workplace investigation.

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.

• Gender expression = a person’s gender-related appearance or behavior, whether or not stereotypically associated with the person’s sex at birth.
• Gender identity = a person’s identification as a male, female, a gender different from the person’s sex at birth, or transgender.
• Transgender = a term for a person whose gender differs from the person’s sex at birth.
• Sex stereotyping = relying on assumptions about a person’s appearance or behavior, or making assumptions about an individual’s ability or inability to perform certain kinds of work based on a myth, social expectation, or generalization about the individual’s gender.

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 1^st. If you have any doubt whether your business is in compliance, we recommend you contact your qualified employment law counsel.

The California Supreme Court will decide whether the terms of a franchise agreement, or the franchisor’s conduct at-odds with that agreement, govern for purposes of whether the franchisor can face liability for (mis-)treatment of a franchisee’s employee.

The issue is simpler than it sounds, but an opinion could have wide-ranging implications for franchisors doing business in California.  In Patterson v. Domino’s Pizza, a 16 year-old employee of a Domino’s franchise sued, not only the franchisee and its manager, but also Domino’s, for alleged sexual harassment, retaliation and constructive wrongful termination.  The franchisee petitioned for bankruptcy protection and Domino’s obtained summary judgment on the grounds that the operative franchise agreement placed sole responsibility for recruiting, hiring, training and supervising employees on the franchisee, such that the franchisee was an independent contractor for liability purposes.

In June, 2012, the California Court of Appeal for the Second District issued and certified for publication an opinion that reversed the summary judgment in Domino’s favor.  In a nutshell, the Court of Appeal looked well outside the terms of the franchise agreement, focusing instead on the course of conduct between Domino’s and its franchisee.  Among the items of evidence cited by the court was Domino’s specific hiring requirements applicable to all franchisees, including rules about qualifications, appearance standards and required training software programs.  The court also pointed to testimony from the franchisee owner about Domino’s practices, including specific direction to fire certain franchisee employees (including the alleged harasser) and tactics, including “mystery shoppers,” designed to exert control over individual franchise stores.  Triable issues remained, the Court of Appeal concluded, whether “there was a lack of local franchisee management independence” which could render Domino’s liable.

Accepting Domino’s petition for review, the Supreme Court has ordered the parties to limit analysis to the question whether Domino’s is entitled to summary judgment on plaintiff’s claim that it is vicariously liable for tortious conduct by a supervising employee of the franchisee.

If the Supreme Court’s opinion is unfavorable to Domino’s, it could change in a very material way the degree of control franchisors maintain over their franchisee’s employment practices.  If it results in a shifting of responsibility to the franchisor, I imagine it will increase franchise purchase costs, trigger different or additional insurance provisions, with corresponding cost increases, and overall make franchise arrangements less appealing in our golden state.

You are a CEO reporting to an angry board.  You are a sole proprietor with the future of your business at stake.  Or you are an employee accused of discrimination or harassment, with your job and relationship at home on the line.  Lawsuits are long, drawn out, often dramatic ordeals; they exact a toll on the participants.  What follows are some ideas about how to cope with this drama and stress:

1.  Find a lawyer you trust.  This sounds obvious, but it can take some searching to find the right attorney.  He or she must be competent in your eyes, or your stress level will increase.  Equally important, your lawyer must be able to manage the stress of the suit or, again, your stress level will be worsened.

2.  Trust the lawyer you find.  Once you find the right lawyer, trust him or her.  It is rare that your lawyer will not want and expect you to be truthful with him or her, even if the facts are bad or embarrassing.  Your lawyer is in the best position to help you or your company; arm him or her with the true facts.

3.  Participate in your case.  I have found that individual clients who take an active role in their case experience a feeling of control.  It’s not illusory.  Your lawyer can only work with the tools and materials made available to him or her.  You can do quite a lot, by locating and organizing documents, educating your lawyer about the nuances of your business or the circumstances of the case.

4.  Manage your anger, fear or frustration.  The stress of being the target of a lawsuit is not dissimilar from other traumatic or stressful events.  Experts coach those going through a divorce or enduring a tragedy to use exercise or relaxation techniques, like meditation, to manage the stress.  Think of a lawsuit in the same way.  One caveat:  bear in mind that communications with someone other than a spouse or lawyer about the details of the case can be “discovered” and potentially used against you if you say something damaging.  Consult with your lawyer before speaking in any detail about your case with someone who is not your spouse.

5.  Try not to direct your anger or frustration at your loved ones.  This will only make it worse and potentially cause damage that can be permanent.

6.  Try not to direct your anger at your lawyer.  Don’t kill the messenger.  In most instances, your lawyer is doing the best he or she can to protect your interests.

7.  Brace for the long haul, but know it will come to an end.  The cliché, “this, too, shall pass,” is true.  Every lawsuit will come to an end, and there will be an opportunity for closure and new beginnings.