United States: California #TakesTheLead On Harassment Laws: What Does It Mean For Employers?

Last Updated: October 8 2018
Article by Joseph C. Liburt, Megan M. Lawson, Kayla Delgado Grundy and Jen Argyle

As you've likely been monitoring, last month the California legislature passed several bills to Governor Brown for signature relating to sexual harassment. The hashtag #TakeTheLead emerged as a symbol reflecting California's potential to become the state at the forefront of passing additional legislation characterized as increasing protection for women – and workers generally – in the face of the #MeToo movement. Late Sunday night, in the last moments before Governor Brown's September 30 deadline, he vetoed the most contentious bill – AB 3080 – and signed into law many of the other pending bills.

Here is a brief recap of the bills that Governor Brown signed and that have been enacted:

  • SB 826: SB 826 mandates one woman on the board of every public company based within California by the end of 2019, and at least two women on the board by the end of 2021. Companies may be fined for non-compliance $100,000 for a first violation and $300,000 for each subsequent violation
  • AB 3109: AB 3109 significantly limits the enforceability of confidentiality agreements, by making 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.
  • SB 820: SB 820 further limits the enforceability of confidentiality agreements, for agreements entered into on or after January 1, 2019, by prohibiting and making void any provision in a settlement agreement that prevents disclosure within the context of filings in a civil or administrative action, of factual information relating to certain claims of sexual assault, sexual harassment, or harassment or discrimination based on sex. It creates an exception, not applicable if a party is a government agency or public official, if the provision preventing disclosure is included within the settlement agreement at the request of the claimant.
  • SB 224: SB 224 expands liability for sexual harassment to a broader group of business relationships by giving additional examples of professional relationships where liability for claims of sexual harassment may arise. SB 224 also authorizes the DFEH to investigate those circumstances.
  • SB 1300: SB 1300 makes a few amendments to the California Fair Employment and Housing Act. First, where currently an employer may be held liable for sexual harassment by a non-employee against an employee, the bill broadens that potential liability to any harassment, even if not sexual in nature. Second, and controversially, the bill prohibits employers from requiring an employee to release a FEHA claim or sign a non-disparagement agreement as a condition of employment or in exchange for a promotion or raise. Third, the bill allows (but does not require) employers to provide bystander intervention training to their employees. Finally, the bill declares that a prevailing defendant may only collect attorney's fees from plaintiff if the action was frivolous, unreasonable, or groundless.
  • SB 1343: SB 1343 focuses on sexual harassment training. Though California has mandated sexual harassment training for supervisors for many years now, this bill broadens the employers subjected to these requirements and adds non-supervisory employees to the required training list. The bill provides that any employer with 5 or more employees (as opposed to the current 50) is required to train its employees on sexual harassment. Non-supervisory employees are required to take 1 hour of training.

On the other hand, here is a brief recap of the bills that Governor Brown vetoed:

  • AB 3080: VETOED: AB 3080 would have prohibited employers from leveraging employment, or employment-related benefits, to ensure confidentiality from employees, applicants, or independent contractors who suffer, witness, or discover harassment in the workplace. Employers would have been prohibited from:

    • Requiring any job applicant or employee to waive any right, forum, or procedure (for example, arbitration) for any violation of the FEHA or Labor Code.
    • Requiring that a job applicant, employee, or independent contractor not disclose instances of sexual harassment in the workplace, opposing unlawful practices, or participating in harassment and discrimination-related investigations or proceedings.
    • Retaliating or threating retaliation against an individual who refuses to consent to the forbidden requirements.

Governor Brown concurred with the concerns voiced by many that this bill would run afoul of the FAA. He notes in his veto comment that he cannot sign a bill that "plainly violates federal law."

  • AB 1867: VETOED: AB 1867 would have required employers with 50 or more employees to maintain records of internal complaints alleging sexual harassment for at least five years after the last day of employment of either the complainant or the alleged harasser, whichever is later.
  • AB 1870: VETOED: AB 1870 would have extended the statute of limitations for filing a complaint with the Department of Fair Employment and Housing to 3 years (from the current 1 year). It also included certain extensions of time for specific scenarios, including later obtained facts and lack of knowledge about the employer in question.

Practically, there are many initial steps that employers should take in light of the above modifications to California law. Employers should:

  • Ensure sexual harassment training is compliant. For employers with 5-49 employees, this will require implementing a sexual harassment training program for both supervising and non-supervising employees. For larger employers who have long had a supervisory employee program in place, a one-hour training program must be implemented for non-supervising employees as well.
  • Review relevant employee contracts. Given the striking down of certain confidentiality and release provisions (which have been fairly standard in certain employment-related contracts), it is likely necessary for employers to conduct a full review of all employee-related contracts and documents to ensure that none of the documents can be deemed invalid or contrary to public policy.
  • Revisit document retention practices. Although Governor Brown vetoed the bill that would have increased the limitations period for FEHA claims, periodic review of document retention policies and whether the current practice makes sense for the employer is a best practice. This "close-call" could serve as an incentive for employers to conduct such an internal review.

More holistically, employers can take this opportunity to think through how, in the #MeToo era, to position themselves best to protect against violations of both new and well-known sexual harassment prevention laws and provide a positive environment for employees. Employers can expect employees gradually to become more vocal about actual and perceived harassment (sexual or otherwise) in the workplace. How an employer responds to these reports and allegations is more important than ever. Employers should begin to have the discussion now about how best to implement the changing laws, how and whether to stay ahead of the curve, and how to ensure that its policies are being implemented appropriately. A lawyer can be a useful resource in counseling employers through the implications of their decisions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Events from this Firm
24 Oct 2019, Speaking Engagement, New York, United States

Orrick’s Lisa Lupion will serve as a panelist for an upcoming CLE program hosted by the New York County Lawyers Association entitled, “New Strategies in Sexual Harassment Investigation.”

24 Oct 2019, Other, Munich, Germany

Orrick and M.M.Warburg & CO invite you to an event on Lean Startups on 24. October.

25 Oct 2019, Speaking Engagement, New York, United States

A joint program of the American Arbitration Association and the Center for Labor and Employment Law at NYU School of Law

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