In this episode of The Proskauer Brief, partners Tony Oncidi and Kate Gold discuss California’s most recent legislative response to the #MeToo movement.  These developments include new restrictions on confidentiality and arbitration as well as the extension of the statute of limitations applicable to harassment, discrimination and retaliation claims.  So be sure to tune in as Tony and Kate highlight the most important new laws facing California employers in the Age of #MeToo.

Transcript:

Tony Oncidi: Hello and welcome to The Proskauer Brief: Hot Topics on Labor and Employment Law.  I’m Tony Oncidi and I’m here today with my partner Kate Gold.  On today’s episode we’re going to discuss California’s legislative response to the #MeToo movement.  Kate, we’ve just passed the second anniversary of the dawn of the #MeToo movement involving sexual harassment claims in the workplace.  What are the most important new laws in California aimed at responding to these types of claims?

Kate Gold: Tony, we are definitely seeing a lot of legislation both that went into effect on January 1 of 2019, and also legislation that has been passed that will go into effect in January of 2020, and there’s a lot of focus on, I would say, three things that really go to a reaction to the hashtag #MeToo movement.  That would be really restrictions on confidentiality of allegations involving sexual harassment, there’s also quite a few laws that extend the statute of limitations for bringing these kinds of claims and also an effort to restrict arbitration.  For example, last year in 2019, we saw the passage of Senate Bill 1300 and that prohibits an employer from requiring any employee to sign a document which denies the employee the right to disclose information about unlawful acts in the workplace.  So a lot of employers had to take a look at their executive contracts and see how to manage their non-disparagement clauses to make sure that they were not running afoul of SB 1300.

A similar law was also passed called the “Stand Act,” which prohibits confidentiality or non-disclosure in settlement agreements.  That law prevents employers from requiring employees to keep secret factual allegations relating to sexual misconduct.  So that had a big impact on how sexual harassment cases are being settled.  And it’s important to note that only applies to claims that were actually filed in court or in an agency.  Similarly there were laws that extended the statute of limitations for bringing these kinds of claims.  The most striking of which really is going into effect January 1 of 2020, which is called AB9 and instead of having one year to bring a claim in the Department of Fair Employment and Housing, for discrimination or harassment, the claimant now has three years to bring that claim.  And as you know, that means that an employer might not actually see a civil claim in court until four years after the employee has been terminated or has incurred that claim.

Tony Oncidi:  Is that because the employee will have one year after that three year period and after receipt of the “right to sue letter” to file a civil action?

Kate Gold: Yes, that’s exactly right. And that’s the same as the law has always been but in the past, time was much more condensed because you had to file your claim within a year in the agency so we were not seeing claims four years later.

Tony Oncidi:   Kate you mentioned that there are new restrictions involving arbitration – what are those?

Kate Gold: Well we’re going to see in January 1, 2020, the effect of AB51, which was passed and that prohibits an employer from requiring an applicant or employee to consent to an arbitration clause, and that type of legislature has been rattling around in the legislation for some time but has never been passed until now.  But the law says that it’s not intended to invalidate a written arbitration agreement that is enforceable under the Federal Arbitration Act, so we may have some challenges to that law because again, most employers if they are involved in interstate commerce are going to be able to invoke the FAA.

Tony Oncidi:   What’s your prediction about the longevity of AB51 in terms of its ability to survive a challenge under the Federal Arbitration Act?

Kate Gold: We have a lot of really good precedent from the United States Supreme Court, both in the last-probably year and two years, but it has supported the enforcement of arbitration agreements against all kinds of challenges including the enforcement of class action waivers and the inability to bring class arbitrations unless the agreement is very clear that, that is the case.  So, I think that there will be a lot of Federal Court and Supreme Court precedent used to overcome any type of restriction that the state law is trying to impose on enforcement of arbitration where interstate commerce is involved.

Tony Oncidi:  Isn’t that the case that the State of New York also passed, I believe in 2018, a law that purported to limit if not exclude arbitrability of these kinds of claims and that state law was struck down by a federal court judge earlier this year in 2019?

Kate Gold: Yes, that’s true. So we have a really good model in New York and there was some similar activity in Kentucky as well.  So this will not be the first time a state’s law restricting arbitration has been challenged.

Tony Oncidi:   There are only so many hours in the day, so it’s unclear how much time the U.S. Supreme Court can devote to correcting some of these issues under California Law but we’ll have to stay tuned to see what happens next in that regard.