On Sunday, September 30, 2018, Governor Jerry Brown signed into law a number of bills that will have a significant impact on litigation and legal counseling in the employment context. Many of the new laws are a response to the traction gained by the “me-too” movement and are summarized herein.

NEW LAWS

AB 3109 – Banning Waiver of Rights to Testify

This new law nullifies any term in a contract or settlement agreement that waives a party’s right to testify in an administrative, legislative or judicial proceeding concerning alleged criminal conduct or sexual harassment. This would apply where the party has been required or requested to attend a proceeding pursuant to a court order, subpoena, or written request from an administrative agency or the legislature.

SB 820 – Settlement Agreements: Confidentiality

The passage of SB 820 prohibits and makes void any provision that prevents the disclosure of information related to civil or administrative complaints of sexual assault, sexual harassment, and workplace harassment or discrimination based on sex. SB 820 authorizes settlement agreement provisions that (1) preclude the disclosure of the amount paid in settlement, and (2) protect the claimant’s identity and any fact that could reveal the identity, so long as the claimant has requested anonymity and the opposing party is not a government agency or public official. SB 820 only impacts settlement agreements entered into after January 1, 2019.

SB 1300 – Unlawful Employment Practices: Discrimination and Harassment

SB 1300 makes it unlawful “for an employer, in exchange for a raise or bonus, or as a condition of employment or continued employment” to “require an employee to sign a release of claim or right.”

The bill also prohibits non-disparagements or other agreements that would “deny the employee the right to disclose information about unlawful acts in the workplace, including, but not limited to, sexual harassment.”

Notably, under this bill, these restrictions would not apply to “a negotiated settlement agreement to resolve an underlying claim . . . that has been filed by an employee in court, before an administrative agency, alternative dispute resolution forum, or through an employer’s internal complaint process,” so long as such agreement is voluntary and involves valuable consideration.

The bill also provides that a prevailing defendant is prohibited from being awarded fees and costs unless the court finds the action was frivolous, unreasonable, or groundless when brought or that the plaintiff continued to litigate after it clearly became so.

Significantly, this new law also expressly affirms or rejects specified judicial decisions, with the impact of making it increasingly difficult for employers to defeat harassment claims on summary judgment. The new law addresses the following judicial decisions:

• Harris v. Forklift Systems, 510 U.S. 17 (1993): The Legislature affirms of the holding in Harris, which found that in a workplace harassment suit “the plaintiff need not prove that his or her tangible productivity has declined as a result of the harassment. It suffices to prove that a reasonable person subjected to the discriminatory conduct would find, as the plaintiff did, that the harassment so altered working conditions as to make it more difficult to do the job.”

• Brooks v. City of San Mateo, 229 F.3d 917 (2000): The Legislature prohibits reliance on this opinion to determine what conduct is sufficiently severe or pervasive to constitute actionable harassment under the FEHA.

• Reid v. Google, Inc., 50 Cal.4th 512 (2010): The Legislature affirmed reliance on the “stray remarks” standard articulated in Reid. Specifically, the California Supreme Court held that the existence of a hostile work environment depends upon the totality of the circumstances and a discriminatory remark, even if not made directly in the context of an employment decision or uttered by a nondecisionmaker, may be relevant, circumstantial evidence of discrimination.

• Kelley v. Conco Cos., 196 Cal.App.4th 191 (2011): The Legislature explained that the legal standard for sexual harassment should not vary by type of workplace. Further, the Legislature found that it is irrelevant that an occupation may have been characterized by a greater frequency of sexually related commentary or conduct in the past. In determining whether or not a hostile environment existed, the Legislature holds that courts should only consider the nature of the workplace when engaging in or witnessing prurient conduct and commentary is integral to the performance of the job duties.  To that end, the Legislature prohibits reliance on any language in Kelley, which conflicts with these principles.

• Nazir v. United Airlines, Inc., 178 Cal.App.4th 243 (2009): The Legislature affirmed the decision in Nazir, which observed that hostile working environment cases involve issues “not determinable on paper.” Specifically, SB 1300 states that “Harassment cases are rarely appropriate for disposition on summary judgment.”

SB 1412 – Applicants for Employment: Criminal History

Under existing law, employers, whether a public agency or private individual or corporation, are prohibited from (1) asking an applicant for employment to disclose, (2) seeking from any source, or (3) utilizing as a factor in determining employment, information concerning an applicant’s participation in a pretrial or posttrial diversion program or concerning a conviction that has been judicially dismissed or ordered sealed. It is a crime to intentionally violate these provisions. However, under existing laws, employers are not prohibited from asking an applicant about a criminal conviction or performing a background check regarding a criminal conviction to be considered in determining any condition of employment, so long as (1) the employer is required to obtain information regarding a conviction of an applicant, (2) the applicant would be required to possess or use a firearm in the course of his or her employment, (3) an individual who has been convicted of a crime is prohibited by law from holding the position sought, regardless of whether the conviction has been expunged, judicially ordered sealed, statutorily eradicated, or judicially dismissed following probation, or (4) the employer is prohibited by law from hiring an applicant who has been convicted of a crime.

Under the new law, employers can conduct background checks for employees under certain narrow exceptions. Specifically, under the new law, an employer, whether a public agency or private individual or corporation, cannot seek information regarding an applicant’s arrest or detention that did not result in conviction or occurred while the applicant was subject to the jurisdiction of the juvenile court. Nor can an employer seek information concerning a referral to, and participation in, any pretrial or posttrial diversion program, or concerning a conviction that has been judicially dismissed or ordered sealed pursuant to law. An employer may not consider such information when determining any condition of employment. However, under the new law, an employer may conduct a background check under narrow circumstances where: (1) the employer is a health facility as defined under Section 1250 of the Health and Safety Code; (2) an applicant’s juvenile arrest or detention resulted in a felony or misdemeanor conviction that occurred within five years preceding the application for employment; (3) the employer is required to obtain information regarding a conviction of an applicant; (4) the applicant would be required to possess or use a firearm in the course of his or her employment; (5) an individual who has been convicted of a crime is prohibited by law from holding the position sought, regardless of whether the conviction has been expunged, judicially ordered sealed, statutorily eradicated, or judicially dismissed following probation; or (6) the employer is prohibited by law from hiring an applicant who has been convicted of a crime.

AB 1976 – Lactation Accommodation

Existing law requires employers to provide a reasonable amount of break time to accommodate employees who are breastfeeding and requires an employer to make reasonable efforts to provide the employee with the use of a room or other location, other than a toilet stall, in close proximity to the employee’s work area, for the employee to breastfeed privately.

This new law clarifies what it means to make reasonable efforts to provide the employee with the use of a room or other location, other than a bathroom, in close proximity to the employee’s work area, for the employee to breastfeed privately. An employer is deemed to have complied with the law if it makes a temporary lactation location available to an employee, so long as: (1) the employer is unable to provide a permanent lactation location because of operational, financial, or space limitations; (2) the temporary lactation location is private and free from intrusion while an employee expresses milk; (3) the temporary lactation location is used only for lactation purposes while an employee expresses milk; (4) the temporary lactation location otherwise meets the requirements of state law concerning lactation accommodation. If the employer can demonstrate to the Department of Industrial Relations that this requirement would impose an undue hardship, the new law requires the employer to make reasonable efforts to provide a room or location for expressing milk that is not a toilet stall.

SB 1343 – Employers: Sexual Harassment Training Requirements

The new law requires employers with five or more employees, including temporary or seasonable employees, to provide at least 2 hours of sexual harassment training to all supervisors and at least one hour of sexual harassment training to all nonsupervisory employees by January 1, 2020, and one every 2 years thereafter.

AB 2079 – Janitorial Workers: Sexual Violence and Harassment Prevention Training

Introduced as the bill to empower janitors to prevent rape on the night shift, this new law bolsters existing sexual harassment and violence prevention training and prevention measures. The new law establishes the following requirements:

• Effective January 1, 2020, all employers applying for new or renewed registration must demonstrate completion of sexual harassment violence prevention requirements and provide an attestation to the Labor Commissioner.

• The Department of Industrial Relations (“DIR”) must convene an advisory committee by July 1, 2019 to develop requirements for qualified organizations and peer-trainers for employers to use in providing training. The DIR must maintain a list of qualified organizations and qualified peer-trainers.

• Employers, upon request, must provide an employee a copy of all training materials.

AB 2079 would also prohibit the Labor Commissioner from approving a janitorial service employer’s request for registration or for renewal if the employer has not fully satisfied a final judgment to a current or former employee for a violation of the FEHA.

AB 3082 – Training for In-Home Supportive Services

The new law requires the In-Home Supportive Services (“IHSS”) program, administered by the State Department of Social Services and counties, to develop or otherwise identify standard educational material about sexual harassment and the prevention thereof to be made available to IHSS providers and recipients and a proposed method for uniform data collection to identify the prevalence of sexual harassment in the IHSS program. The bill requires the IHSS, on or before September 30, 2019, to provide a copy of the educational material and a description of the proposed method for uniform data collection to the relevant budget and policy committees of the Legislature.

AB 2338 – Talent Agencies: Education and Training

The law requires a talent agency to provide educational materials on sexual harassment prevention, retaliation, and reporting resources and nutrition and eating disorders to its artists. This law would require those educational materials to be in a language the artist understands, and would require the licensee, as part of the application for license renewal, to confirm with the commissioner that it has and will continue to provide the relevant educational materials.

Further, the new law requires that, prior to the issuance of a permit to employ a minor in the entertainment industry, that an age-eligible minor and the minor’s parent or legal guardian receive and complete training in sexual harassment prevention, retaliation, and reporting resources. The bill would further require a talent agency to request and retain a copy of the minor’s entertainment work permit prior to representing or sending a minor artist on an audition, meeting, or interview for engagement of the minor’s services.

To the extent these laws are violated, the commissioner is authorized to assess civil penalties of $100 for each violation, as prescribed.

SB 224 – Person Rights: Civil Liability and Enforcement

The new law provides additional examples of professional relationships where liability for claims of sexual harassment may arise.

VETOED BILLS

Several bills, which Governor Brown vetoed, are also notable because of the major impact they would have had on the employment context, had they been signed into law.

AB 1870 – Employment Discrimination: Limitation of Actions

Currently, under the existing laws, individuals have one year to file an administrative complaint with the Department of Fair Employment and Housing to enforce a FEHA claim. AB 1870 would have amended this deadline, extending it to three years to file a FEHA complaint from the date of the unlawful conduct. The bill would also add a 90-day extension to the filing deadline, which would apply if the aggrieved individual “first obtained knowledge of the facts of the alleged unlawful practice during the 90 days following the expiration of the applicable filing deadline.”

By vetoing this bill, the Governor has curbed the potential for frivolous FEHA lawsuits and the risk of lawsuits where memories of the circumstances giving rise to the claims have faded.

AB 3080 – Employment Discrimination: Enforcement

Governor Brown vetoed AB 3080, which would have prohibited employers from entering into arbitration agreements with employees. The passage of this bill would have directly conflicted with the U.S. Supreme Court’s May 2018 ruling in Epic Systems Corp., v. Lewis, 148 S. Ct. 1612 (2018), which affirmed employment arbitration agreements and class action waivers.

AB 3080 included four key provisions, including: (1) prohibiting arbitration agreements for wage and hour claims and discrimination, harassment and retaliation claims under the Fair Employment and Housing Act; (2) prohibiting employers from taking any employment action against employees who refuse to enter into arbitration agreements; (3) barring confidential agreements regarding harassment (possibly in the context of a settlement as well although the proposed text was not clear as to the scope of the prohibition); and (4) opening the possibility for individual liability for anyone that violates the provisions of the bill.

AB 3081 – Employment: Sexual Harassment

Governor Brown vetoed AB 3081, which broadly attempted to address workplace harassment by issuing three major prohibitions:

• First, employers and labor contractors would be jointly liable for all civil liability for sexual harassment, including harassment on the basis of pregnancy, childbirth or related conditions. They would be forbidden from retaliating against employees who file claims.

• Second, AB 3081 would have amended the California Labor Code to prohibit employers from discriminating or retaliating against an employee because of his/her status as a victim of sexual harassment.

• Third, the bill would create a rebuttable presumption of unlawful retaliation if an employer “discharges, threatens to discharge, demotes, suspends, or in any manner discriminates against” an employee within 30 days after the employer has acquired actual knowledge of the employee’s status as a sexual harassment victim.

The fact that Governor Brown vetoed this bill is not particularly surprising given that he has expressed reluctance to expand concepts of joint liability in the past. However, this decision is still notable given the momentum of the #me-too movement.

TAKEAWAYS

California employers should consider these new laws when negotiating settlement agreements and engaging in litigation.  These laws serve as reminder of how important it is for all employers to review and revise where necessary their anti-harassment, discrimination, and retaliation policies on a more frequent and consistent basis. Importantly, employers may continue using arbitration agreements with class action waivers.