As most California employers know, the complex web of laws that govern employment in the state is vast and ever-expanding. It just got more complicated. The Fair Employment and Housing Council (“FEHC”) has issued new anti-discrimination and anti-harassment regulations that most California employers must comply with. The new regulations will go into effect April 1, 2016.  It is critically important to understand these new regulations in order to avoid inadvertent violations and potential liability. Among other things, the new regulations:

(1) Expand the number of employers covered by the Fair Employment and Housing Act (“FEHA”).

(2) Require employers to develop new anti-discrimination and harassment policies that meet numerous new and detailed requirements.

(3) Require employers to distribute those policies to employees in English as well as in any additional languages that are spoken by at least 10% of the workforce.

(4) Impose new requirements for conducting discrimination and harassment training.

(5) Update the definitions of “gender identity,” “gender expression” and “transgender” under FEHA.

(6) Include a new rule that would allow the Department of Fair Employment and Housing (DFEH) to obtain “non-monetary preventative remedies” against an employer who fails to prevent discrimination or harassment, even if there is no evidence of underlying discrimination or harassment.

More detail regarding each of these new regulations is provided below.

Expanded definition of “covered employer”

Employers with fewer than 5 employees are generally not subject to FEHA or, by extension, the new FEHC regulations.  However, the new regulations redefine what it means to have 5 employees.  The new regulations provide that out of state employees count toward the 5-employee requirement.  This means that, under the new FEHC regulations, an Arizona-based company with a small office of 3-4 employees in California may be sued under FEHA.  Additionally, employees who are out on leave (such as medical leave) now count toward the 5-employee requirement as well.

Small employers and/or employers with relatively small California operations should be mindful of these new regulations in order to avoid surprise if/when they are threatened with a lawsuit under FEHA.  If a small employer exceeds the 5-employee threshold as a result of these new regulations, they would be well-advised to consult an attorney regarding FEHA and compliance with its myriad provisions.

New anti-discrimination and anti-harassment policies

Employers have always been required to distribute the DFEH brochure on sexual harassment (Form DFEH-185) to employees.  Now they must do much more.  Under the new regulations, employers must have in place anti-discrimination and anti-harassment policies that meet a panoply of requirements.  The policies must:

• Be in writing.

• List the categories of individuals protected by FEHA, which are:

  • Age (40 and over)

  • Ancestry

  • Color

  • Religious Creed (including religious dress and grooming practices)

  • Denial of Family and Medical Care Leave

  • Disability (mental and physical) including HIV and AIDS

  • Marital Status

  • Medical Condition (cancer and genetic characteristics)

  • Genetic Information

  • Military and Veteran Status

  • National Origin (including language use restrictions)

  • Race

  • Sex (which includes pregnancy, childbirth, breastfeeding and medical conditions related to pregnancy, childbirth or breastfeeding)

  • Gender, Gender Identity, and Gender Expression

  • Sexual Orientation

• Make clear that FEHA prohibits coworkers, third parties, supervisors and managers from engaging in discriminatory, harassing, or retaliatory conduct.

• Provide a complaint procedure that ensure that complaints are:  kept confidential (to the extent possible), responded to in a timely manner, investigated by “qualified personnel” in a timely and impartial manner, and documented and tracked.  The complaint procedure must also provide for appropriate remedial action and resolution and timely closure of investigations.

• Establish a complaint mechanism, such as a complaint hotline or access to an ombudsperson, that does not require an employee to complain directly to an immediate supervisor.

• Instruct supervisors to report any complaints of misconduct to a designated company representative so the company can try to resolve the claim internally.

• State that allegations of misconduct will be addressed through a fair, timely, and thorough investigation.

• State that confidentiality will be kept by the employer to the extent possible.

• Indicate that if misconduct is found during the investigation, appropriate remedial measures will be taken.

• Make clear that the company will not retaliate against employees for lodging a complaint or participating in an investigation.

Dissemination of new policies

In addition to the new substantive policy requirements, the regulations require employers to disseminate the anti-discrimination and anti-harassment policies to employees.  To comply with this regulation, employers may do any one of the following:

• Provide a copy of the policies to all employees either in hard copy or by email with an acknowledgment form for employees to sign.

• Post the policies on a company intranet site and use a tracking system to ensure all employees read and acknowledge receipt of the policies.

• Discuss the policies upon hire or during new-hire orientation sessions.

The regulations also require employers whose workforce includes 10% or more non-native English-speaking employees to issue the anti-discrimination and harassment policies in each such language.

New requirements for conducting discrimination and harassment training

Anti-discrimination and anti-harassment training must now cover “abusive conduct” as defined in Government Code section 12950.1(g)(2).  Among other things, the training must:  cover the negative effects of “abusive conduct,” including reduction in productivity and morale; discuss the elements of “abusive conduct,” including conduct taken with malice that a reasonable person would find hostile or offensive and that is not related to an employer’s legitimate business interests; and emphasize that while a single act ordinarily will not constitute abusive conduct, it could if it is particularly severe or egregious.

New definitions for “gender identity,” “gender expression” and “transgender”

The new regulations provide new definitions for “gender expression,” “gender identity” and “transgender.”  Specifically, “gender expression” means a person’s gender-related appearance or behavior, whether or not stereotypically associated with the person’s sex at birth.  “Gender identity” means a person’s identification as male, female, a gender different from the person’s sex at birth, or transgender.  Finally, “transgender” is a general term that refers to a person whose gender identity differs from the person’s sex at birth.  A transgender person may or may not have a gender expression that is different from the social expectations of the sex assigned at birth.  A transgender person may or may not identify as “transsexual.”

“Non-monetary preventative remedies” against an employer, even in the absence of underlying discrimination or harassment

In Dickson v. Burke Williams, Inc., 234 Cal. App. 4th 1307, Sheppard Mullin successfully argued that under FEHA there cannot be a standalone, private cause of action for failure to prevent discrimination or harassment if there was no actionable discrimination or harassment.  The new regulations attempt to limit the holding in Dickson. While acknowledging that a private plaintiff may not pursue a “failure to prevent” claim in the absence of actionable discrimination or harassment, the new regulations nonetheless provide that the DFEH may elect to pursue “non-monetary preventative remedies” for failure to prevent discrimination or harassment regardless of whether the DFEH prevails on an underlying claim of discrimination or harassment.  At this point, it is unclear what “non-monetary preventative remedies” means, but it will almost certainly be interpreted in the broadest manner possible.

What Steps Should California Employers Take To Ensure Compliance With The New Regulations?

California employers should take a number of steps to ensure compliance with the new FEHC regulations.  First, they should ensure they have written policies that comply with the new regulations and that such policies are disseminated in one or more of the approved methods (in addition to Form DFEH-185).  They should also ensure that proper complaint and investigation procedures are in place.  Finally, they should ensure supervisors and human resources personnel receive proper training on the new regulations so that all inquiries and potential complaints can be addressed in a compliant manner.