Legislative Summary: New California Legislation Affecting Employers

AB 3109 (STONE) – CONTRACTS: WAIVER OF RIGHT OF PETITION OR FREE SPEECH

This law was inspired by the recent well-publicized case of Olympic gymnast McKayla Maroney, who had settled with USA Gymnastics over sexual abuse by the team doctor Larry Nassar. According to media reports, the settlement agreement in this case would have subjected Maroney to a $100,000 fine for testifying in a criminal trial against the team doctor for sexually abusing her and numerous other gymnasts. This law makes it easier for sexual harassment or assault victims to come forward and report incidents, and lessens the fear victims may have that they will later be silenced.

As a result of events like these in the #MeToo movement, AB 3109 addresses the effect of settlement agreements that silence the accuser of sexual harassment claims through non-disclosure provisions. Under AB 3109, settlements that would require a sexual harassment victim to “keep quiet” and not later testify about the criminal conduct or sexual harassment are now no longer permitted. This bill applies when the victim has been required to give testimony by a court, administrative agency, or legislative body. It will affect settlement agreements entered into on or after January 1, 2019.

Bottom line: Employers that enter into settlement agreements on or after January 1, 2019 should not include provisions that waive a plaintiff’s right to testify concerning alleged criminal conduct or alleged sexual harassment when requested by a judicial or legislative body.

SB 820 (LEYVA) – SETTLEMENT AGREEMENTS: CONFIDENTIALITY

Known as the STAND (Stand Together Against Non Disclosures) Act, this new law takes aim at “secret settlements” in sexual harassment cases. Also inspired by the #MeToo movement, this law was made in response to high-profile cases like film producer Harvey Weinstein, who was charged in May 2018 with rape and other offenses, after a wave of over 80 women made allegations against him for sexual abuse. The claims against Weinstein brought into question reports that he may have secretly settled previous claims, thereby keeping the issue out of public and law enforcement scrutiny.

As a result, the California legislature passed SB 820, which bans secret settlements (confidentiality provisions in settlement agreements) in cases of sexual assault, sexual harassment, and sex discrimination.

Notably, SB 820 will not prevent people from mutually agreeing to settle, but it will simply prevent the perpetrator from requiring the victim to remain silent about the harassment.

This law is broader than just covering sexual assault – it prevents a confidentiality agreement from being included in the settlements of claims of sexual assault, sexual harassment, discrimination based on sex, failure to prevent harassment or discrimination based on sex, or retaliation, unless it was requested by the victim. Thus, SB 820 will have an impact beyond sexual assault and harassment cases.

• As an exception, a claimant may request a provision in the agreement that conceals all of his or her identifying information. This allows employees to maintain their privacy. The accused, however, has no such protection. This exception does not apply if a government agency or public official is a party to the settlement agreement.
• Additionally, the law expressly does not limit the parties’ ability to require the settlement amount to remain private. This is good for employers, who are often worried that if the amount of the settlement is disclosed, it will encourage “copycat” claims to be filed by other employees.
• Accordingly, employers can still insist that the amount of such settlements remain confidential, but not the underlying facts of the case.

Bottom line: Employers that enter into settlement agreements on or after January 1, 2019 should not include provisions that prevent disclosure of factual information related to these types of claims.

SB 1300 (JACKSON) – UNLAWFUL EMPLOYMENT PRACTICES: DISCRIMINATION & HARASSMENT

This law is the most comprehensive legislation coming out of the #MeToo movement, and greatly impacts the way sexual harassment claims will be litigated and treated by the courts.

This law limits the circumstances under which employers can require employees to sign releases and non-disparagement agreements.

• 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:
  • (a) require the employee to sign a release of a claim or right under the Fair Employment and Housing Act (FEHA); or
  • (b) require the employee to sign a non-disparagement agreement or other document that purports to deny the employee the right to disclose information about unlawful acts in the workplace, including but not limited to sexual harassment.
• Exception: This limitation doesn’t apply to negotiated settlement agreements to resolve claims filed in court, before an administrative agency, an alternative dispute resolution forum, or through an employer’s internal complaint process.

SB 1300 also:

• Expands harassment liability for acts of non-employees, which used to be limited to sexual harassment. Starting January 1, 2019, such liability will apply to any type of harassment prohibited under the FEHA. This means that an employer could be liable for all forms of unlawful harassment committed by non-employees (such as customers, vendors or other third parties), if the employer knew or should have known of the conduct and failed to take corrective action.
• Prohibits a prevailing defendant from being awarded attorney’s 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. This limits a prevailing employer’s right to fees and costs.
  • This prohibition applies “notwithstanding” Code of Civil Procedure Section 998, which provides that if a plaintiff rejects a settlement offer and then fails to obtain a more favorable settlement at trial, the plaintiff must pay the post-offer fees and costs of the defendant.
  • Under this law, an employer will no longer be able to recover those post-offer fees and costs, unless the court finds the action was frivolous, unreasonable or without merit.
  • This law may impact an employer’s case strategy regarding settling claims.
• Authorizes (but does not require) employers to provide bystander intervention training to its employees. This is intended to address the “bystander effect,” which is the tendency of people to remain silent and not offer help to a victim when others are present.

SB 1300 also expressly affirms or denies specified judicial decisions:

• Harris v. Forklift Systems: approves the standard in Justice Ruth Bader Ginsburg’s concurrence 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: rejects this 9th Circuit opinion that a single incident of harassing conduct is not sufficiently “severe or pervasive” to constitute actionable harassment under the FEHA.
• Reid v. Google, Inc.: affirms the California Supreme Court’s rejection of the “stray remarks doctrine” because “a discriminatory remark, even if made not directly in the context of an employment decision or uttered by a non-decisionmaker, may be relevant, circumstantial evidence of discrimination.”
• Kelley v. Conco Companies: disapproves of this case because the “legal standard for sexual harassment should not vary by type of workplace.”
• Nazir v. United Airlines, Inc: affirms this case’s observation that hostile working environment cases are “rarely appropriate for disposition on summary judgment.”

This legislative guidance, while not binding on courts, will certainly be used by plaintiffs’ attorneys in litigating sexual harassment cases. It remains to be seen how courts will respond to this apparent declaration of legislative intent.

Bottom line: SB 1300 changes the landscape for sexual harassment cases, and employers should review their policies and procedures to make sure they comply with these various new requirement and legal standards.

SB 1343 (MITCHELL) – EMPLOYERS: SEXUAL HARASSMENT TRAINING: REQUIREMENTS

This law expands the scope of required sexual harassment training. Existing law required training for employers with at least 50 employees; this law lowers the number of employees to five and includes non-supervisors in the mandate.

• Beginning in 2020, this new law requires every employer, with five or more employees, to provide their employees with sexual harassment prevention training once every two years.
• Supervisorial employees will be required to have a two-hour training, while non-supervisorial employees will have a one-hour training.
• Additionally, the bill requires the Department of Fair Employment and Housing to develop a training video that employers could use to provide the training, as well as informational posters and fact sheets in multiple languages.

Bottom line: Employers should make sure they are providing sexual harassment training within the time frames required by this new law, and smaller employers should check to see if they need to provide the trainings.

AB 1976 (LIMÓN) – EMPLOYMENT: LACTATION ACCOMMODATION

AB 1976 amends current California law by requiring that employers make reasonable efforts to provide a location “other than a bathroom”, rather than “other than a toilet stall,” for employees to express breastmilk. It applies to all employers regardless of size.

This bill makes it easier for nursing mothers to express milk at work, and potentially increases the burden on employers to provide such accommodations.

Key Takeaways: It’s been an active legislative session in California in 2018, reflecting the growing voices of the #MeToo movement. Employers should be aware of the various new requirements and broader liability now imposed on employers in work-related sexual harassment issues.