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Legal Update

New CA Laws on Gender Disparity, Sexual Harassment in the Workplace Take Effect in New Year

14 December 2018
Mayer Brown Legal Update

Starting January 1, 2019, a number of new laws inspired by the #MeToo movement will take effect in California. The legislation will significantly alter employers’ potential exposure to liability for workplace harassment and will create additional training and inclusion requirements. Highlights of the relevant legislation are set forth below:

Expansion of Employee Protections under FEHA

SB 1300, the Sexual Harassment Omnibus Bill, is an expansive and comprehensive bill that amends the California Fair Employment and Housing Act (“FEHA”) as follows:

  • Expands Potential FEHA Liability for the Acts of Nonemployees: The bill creates liability for employers who fail to prevent all forms of unlawful harassment by nonemployees where the employer, or its agents or supervisors, knew or should have known of the conduct and failed to take immediate and appropriate corrective action.

  • Expands the Scope of Hostile Work Environment Claims:

    The bill provides guidance on establishing a “hostile work environment” in violation of FEHA and expressly affirms or rejects a number of specific judicial decisions that have addressed such claims as follows:
    • A plaintiff in a workplace harassment suit is not required to provide a tangible decline in productivity as a result of the alleged harassment, affirming the standard set forth in Justice Ruth Bader Ginsburg’s concurrence in Harris v. Forklift Systems (1993) 510 U.S. 17. It suffices for the plaintiff to prove that a reasonable person subjected to the discriminatory conduct would find that the harassment so altered working conditions as to make it more difficult to do his or her job.
    • A single incident of harassing conduct is sufficient to create a triable issue regarding the existence of a hostile work environment, expressly rejecting the Ninth Circuit’s opinion in Brooks v. City of San Mateo (9th Cir. 2000) 229 F.3d 917 that a one-time physical encounter was not sufficiently severe or pervasive to support a hostile work environment claim.
    • The existence of a hostile work environment is determined based on a 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, affirming the California Supreme Court’s rejection of the “stray remarks doctrine” in Reid v. Google, Inc. (2010) 50 Cal.4th 512.
    • The legal standard for a hostile work environment should not vary by type of workplace, disapproving any language, reasoning or holding to the contrary in Kelley v. Conco Companies (2011) 196 Cal.App.4th 191.
    • Harassment cases are rarely appropriate for disposition on summary judgment, affirming the observation in Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243 that “hostile working environment cases involve issues ‘not determinable on paper.’”

  • Limits Circumstances Where Prevailing Defendants Can Be Awarded Attorneys’ Fees:

    Prohibits a prevailing defendant from being awarded attorneys’ fees and costs unless the court finds that the plaintiff’s lawsuit was frivolous, unreasonable or groundless when brought or that the plaintiff continued to litigate after it clearly became so.
  • Prohibits Releases of FEHA Claims in Exchange for a Raise or a Bonus or as a Condition of Employment:

    Prohibits employers from requiring an employee to sign a release of FEHA claim or rights in exchange for a raise or a bonus or as a condition of employment or continued employment. This provision does not apply to FEHA releases in negotiated settlement agreements to resolve claims filed by an employee in court, before an administrative agency, in an alternative dispute resolution forum or through an employer’s internal complaint process.

Ban on Agreements Precluding Disclosure of Sexual Harassment Claims

  • SB 820: Prohibits and makes void any provision in settlement agreements entered into on or after January 1, 2019, that prevents the disclosure of factual information related to civil or administrative complaints of sexual assault, sexual harassment, or workplace harassment or discrimination based on sex. SB 820 does not prohibit provisions in a settlement agreement that preclude disclosure of the amount paid in settlement. It also expressly allows the inclusion of provisions that shield the claimant’s identity and all facts that could lead to the discovery of his or her identity, including pleadings filed in court, if the claimant has requested anonymity and the opposing party is not a government agency or public official. 

  • SB 1300: Also prohibits employers from requiring employees, as a condition of employment or continued employment or in exchange for a raise or bonus, to sign (a) a release of claims or rights under FEHA, including any statement that the individual does not possess any claim or injury against the employer or other covered entity or (b) a non-disparagement agreement or other document prohibiting employees from disclosing information about unlawful acts in the workplace, including, but not limited to, sexual harassment. This provision does not apply to negotiated settlement agreements to resolve claims filed by employees in court, before an administrative agency, in an alternative dispute resolution forum or through an employer’s internal complaint process.

  • AB 3109: Provides that any agreement that waives a party’s right to testify in an administrative, legal or judicial proceeding concerning alleged criminal conduct or sexual harassment by another party to the agreement (or agents or employees of the other party) is unenforceable.

Increased Employer Sexual Harassment Training Obligations

SB 1343 expands the current requirements relating to sexual harassment training in the workplace. Effective January 1, 2019, employers who employ five or more people (including temporary or seasonal employees) must provide sexual harassment prevention training to allemployees. Employers must provide at least two hours of sexual harassment training to all supervisory employees and at least one hour of training to all nonsupervisory employees, and all of this training must be completed by January 1, 2020, and once every two years thereafter. New employees must receive training within six months of assuming their positions. Beginning January 1, 2020, seasonal and temporary employees, or any employee who is hired to work for less than six months, must receive training within 30 days of hire or within 100 hours worked, whichever occurs first. This is a significant expansion of the current law, which applies to employers with 50 or more employees and only requires the training of supervisory employees every two years.

Women on Boards

SB 826 provides that, beginning December 31, 2019, publicly held companies with their principal executive offices in California must have a certain minimum number of women serving on their boards of directors. Such corporations must also have at least one female on their board by December 1, 2019. Thereafter, boards with five directors must have at least two women on the board, and boards with six directors must have at least three female members by December 31, 2021. Corporations failing to comply with this mandate face significant monetary penalties.

Authors

  • Ruth Zadikany
    T +1 213 621 3916
  • John Zaimes
    T +1 213 229 9545
  • Roxanne M. Wilson
    T +1 213 229 5119
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