Late Sunday afternoon, Governor Brown vetoed a proposal to impose a controversial new mandate for large California employers to collect and publicly report data about the salaries of male and female employees and board members. The Governor also vetoed a proposal to amend the California Labor Code to expressly prohibit employers from discriminating against employees based on their “reproductive health decisions.”

1. Governor Vetoes Gender Wage Reporting Bill For Potentially Doing More Harm Than Good

Dubbed the Gender Pay Gap Transparency Act, AB 1209 sought to require businesses with 500 or more California employees to biennially collect and report the following information on gender wage differentials to the Secretary of State:

• The difference between the mean wages of male and female employees who work in California as an overtime-exempt administrative, executive, or professional employee, by each job classification or title;

• The difference between the median wages of male and female employees who work in California as an overtime-exempt administrative, executive, or professional employee, by each job classification or title;

• The difference between the mean wages of male and female board members located in California;

• The difference between the median wages of male and female board members located in California; and

• The number of employees used to determine the wage mean and median wage differentials for overtime-exempt administrative, executive, or professional employees.

That data would have then been published by the Secretary of State on a publicly-available website.

The California Chamber of Commerce included AB 1209 among its annual list of “Job Killers,” and criticized the bill as having the potential to “publicly shame employers and expose them to costly litigation for alleged wage disparity where no violation of the equal pay law exists.” Several other employer associations joined the California Chamber of Commerce’s opposition earlier this year.

In his veto message, Governor Brown reiterated his support for “policies that ensure women are compensated equitably,” but expressed concern about AB 1209’s “ambiguous wording” and the possibility that the bill’s ambiguity could be “exploited to encourage more litigation than pay equity.” Governor Brown also noted that the State’s Pay Equity Task Force was in the process of developing guidance and recommendations to assist employers with assessing their compliance with California’s Equal Pay Act.

2. Governor Deems Explicit Protection of “Reproductive Health Decisions” Unnecessary

Governor Brown also exercised his veto power over AB 569, which would have added a new section to the Labor Code making it unlawful for employers to take adverse actions against employees (or their dependents or family members) for “reproductive health decisions.” The bill’s legislative history indicated that it was designed to protect employees from discrimination based on their engagement in acts such as getting an abortion, using contraception, having a vasectomy done, or becoming pregnant out of wedlock or through in vitro fertilization. The bill would have specifically prohibited and invalidated any contract or agreement that required employees to expressly or impliedly waive the protections or benefits of its provisions, such as controversial codes of conduct that proscribe certain reproductive health decisions.

AB 569’s legislative history stated that it was designed to regulate conduct by small, private employers and certain non-profit and religious institutions excluded from the Fair Employment and Housing Act’s coverage. With the exception of employees performing non-religious duties at a health care facility operated by a religious corporation or association, the Fair Employment and Housing Act does not currently apply to non-profit religious associations or corporations. Its coverage also excludes employers with fewer than five employees.

Some opponents of the bill argued that AB 569 would infringe the religious freedom of churches, religious groups, and pro-life organizations and undermine those organizations ability to “be faithful to their religious beliefs and core mission.” The California Chamber of Commerce opposed the bill for exposing employers to the jurisdiction of multiple state agencies with different procedural and investigative requirements.

In vetoing AB 569, Governor Brown stated that the Fair Employment and Housing Act has “long banned” discrimination against employees for their reproductive health decisions, and expressed his belief that jurisdiction over such claims should remain within the purview of the Department of Fair Employment and Housing.

Governor Brown’s veto of AB 1209 and AB 569 can be overridden by a two-thirds vote of both California legislative houses. However, the Legislature has not overridden a veto since 1979.