September 1, 2018 marked the last day for the California legislature to pass bills and forward them to Governor Jerry Brown (D) for his consideration. Governor Brown has until September 30 to sign, veto, or otherwise decline to act upon these bills. The bills that become law will take effect on January 1, 2019, unless otherwise specified in the text of the measure. As always, the long list of bills crossing the governor’s desk includes numerous labor and employment items that could impact the operations of private employers in the Golden State.
Sexual Harassment: The California Legislature Reacts to the #MeToo Movement.
No surprise, this year many of the bills coming out of the legislature in the Golden State attempt to address sexual harassment in the workplace, a direct result of the #MeToo movement.
AB 3081: The Smorgasbord Bill
We start our review of key bills addressing sexual harassment with AB 3081, which merits its own category because it broadly attempts to address workplace harassment on three different fronts. First, it would make client employers and labor contractors jointly liable for all civil liability for sexual harassment, including harassment on the basis of pregnancy, childbirth or related conditions. Client employers and labor contractors also would be forbidden from retaliating against employees who file claims.
Second, AB 3081 would amend the California Labor Code to specifically prohibit employers from discriminating or retaliating against an employee because of his or her status as a victim of sexual harassment. The bill would augment existing protections for employees who are victims of domestic violence, sexual assault, or stalking.
Third, the measure 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.
In the past, Governor Brown has expressed reluctance to expand concepts of joint liability, but perhaps the #MeToo momentum may prove persuasive.
Restrictions on Non-Disclosure Agreements (NDAs), Releases, and Mandatory Arbitration Provisions
Several bills attempt to limit the use of employer-employee agreements as they relate to prohibited harassment in the workplace.
Most notably, AB 3080 takes aim at two legal tactics that, according to the bill’s sponsors,1 can hide and perpetuate sexual harassment: non-disparagement clauses and mandatory arbitration agreements.
In an effort to blunt the impact of a non-disparagement clause, AB 3080 would forbid organizations from prohibiting applicants, employees, or independent contractors “from disclosing to any person an instance of sexual harassment that the employee or independent contractor suffers, witnesses, or discovers in the workplace or in the performance of the contract.” It also would ban restrictions on an individual’s ability to oppose unlawful practices, exercise his or her rights, or participate “in any investigation or proceeding with respect to unlawful harassment or discrimination.”
Remaining provisions of AB 3080 purportedly strive to ensure that individuals enter into contracts affecting their rights voluntarily, without coercion, and that they do not suffer retaliation should they refuse to consent to waivers of their rights. The proposal states that organizations may not:
require any applicant . . . or any employee to waive any right, forum, or procedure for a violation of any provision of the California Fair Employment and Housing Act . . . or [the Labor Code], including the right to file and pursue a civil action or a complaint with, or otherwise notify, any state agency, other public prosecutor, law enforcement agency, or any court or other governmental entity of any alleged violation.
The measure would clarify that agreements (e.g., arbitration agreements) that require employees to opt out or otherwise take affirmative steps to preserve their rights are covered by this statute. In other words, an arbitration agreement with an opt-out provision would still be unenforceable. (It should be noted that AB 3080 is similar to a bill that made it to the governor’s desk in 2015, which also would have limited workplace arbitration agreements. The governor vetoed that bill. Should AB 3080 be signed by Governor Brown, it is anticipated that it will be subject to legal challenge on the basis that it is preempted by federal law – the Federal Arbitration Act.)
As another means of potentially curbing workplace harassment, the California legislature has approved several bills that could facilitate the public disclosure of sexual harassment claims. These bills seek to negate certain types of contractual terms that might operate to discourage victims or witnesses from speaking out.
AB 3109 would nullify 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. AB 3109 would apply where “the party has been required or requested to attend the proceeding pursuant to a court order, subpoena, or written request from an administrative agency or the legislature.”
SB 820, another California measure, focuses on non-disclosure clauses in settlement agreements. The measure would prohibit provisions in a settlement agreement that prevent the disclosure of factual information relating to claims of sexual assault, sexual harassment, harassment or discrimination based on sex, or retaliation for filing a claim of sexual harassment. Moreover, it would prevent courts from restricting the disclosure of such facts, by stipulation or otherwise, in relevant civil proceedings. SB 820 would not ban provisions precluding the disclosure of a settlement payment amount. In addition, under the bill, “a provision that shields the identity of the claimant and all facts that could lead to the discovery of his or her identity, including pleadings filed in court, may be included within a settlement agreement at the request of the claimant.”
Like AB 3080, discussed above, SB 1300 would curtail an employer’s ability to utilize non-disparagement clauses and certain waivers for claims asserted under the California Fair Employment and Housing Act (FEHA). The bill 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 a claim or right,” including any release covering claims against an employer, the right to file and pursue civil action, or the ability to notify any court, law enforcement, or governmental agency. SB 1300 also prohibits non-disparagement 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.” 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.
On another note, SB 1300 encourages (but does not require) employers to provide bystander intervention training. It also declares the legislature’s intent about the standard of review to be used for evaluating sexual harassment claims.
Administrative Enforcement Procedures
FEHA prohibits certain types of discrimination and harassment against employees and tenants. Under existing law, individuals have one year to file an administrative charge with the Department of Fair Employment and Housing, the state agency tasked with enforcement of FEHA. AB 1870 would amend that deadline, however, to grant employees three years to file a FEHA complaint, from the date of the unlawful conduct or refusal to cooperate. 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.” The proposal would not alter the one-year limitations period for non-employment-related complaints and would not resurrect lapsed claims.
AB 1867 would require employers with 50 or more employees to “maintain records of employee complaints alleging sexual harassment.” Employee complaint is defined to include complaints filed through the internal reporting process promulgated by the employer. Records of internal complaints would need to be kept for five years from the separation date of the complainant or the alleged harasser named in the complaint, whichever date is later. Proponents argue that the retention of these records would identify harassers and limit their ability to repeat misconduct.
Antiharassment Training and Other Antidiscrimination Obligations
As of now, California law generally requires employers with 50 or more employees to provide supervisory personnel with training regarding sexual harassment and similar prohibited conduct. This year the legislature sent a variety of training-related bills to Governor Brown that would impose additional duties.
Under SB 1343, for example, employers with five or more employees would be obligated to provide antiharassment training. In addition to applying the supervisory training requirement to smaller employers, SB 1343 would also mandate sexual harassment training to all non-supervisory employees. The first round of training would need to be completed by January 1, 2020, and all training must be repeated every two years. Beginning in 2020, training would also be mandated for seasonal and temporary employees, as well as for seasonal and migrant agricultural workers. If enacted, the bill would require the Department of Fair Employment and Housing to develop one- and two-hour online training courses, to be posted with other resources on the agency’s website.
A few training-related bills are directed at particular industries. AB 2338 would require talent agencies to satisfy certain new notice obligations in order to be licensed in the state. Talent agencies would be required to provide “educational materials regarding sexual harassment prevention, retaliation, and reporting resources to an adult artist within 90 days of agreeing to representation by the licensee or agency procurement of an engagement, meeting, or interview, whichever comes first.” Educational materials concerning nutrition and eating disorders would also become mandatory. And before a minor could obtain an entertainment work permit, both the minor and his or her parent or guardian would be required to complete similar antiharassment training. Under the measure, talent agencies must retain records for three years demonstrating compliance with these requirements.
Meanwhile, AB 3082 would stake out first steps for antiharassment training for entities covered by the In-Home Supportive Services (IHSS) program, which provides residential services to qualified aged, blind, and disabled citizens. The bill would require the State Department of Social Services, in consultation with stakeholders, to develop, by September 30, 2019, both educational material and a “proposed method for uniform data collection to identify the prevalence of sexual harassment in the [IHSS] program.”
Finally, two related bills could affect the janitorial services industry. As discussed below, AB 2732 substantively addresses immigration-related practices. But together, AB 2732 and AB 2079 would clarify record-keeping and registration requirements for janitorial service providers. Among other things, if adopted, these measures would require the Director of the Department of Industrial Relations to “convene an advisory committee to develop requirements for qualified organizations and peer trainers.” Employers would be required to use content and qualified organizations approved by the committee when providing mandatory sexual harassment prevention training to employees.
While AB 2732 touches on janitorial training requirements, the bill’s arguably more prominent provisions relate to immigration-related practices. First, the bill prohibits employers from damaging, withholding, or possessing an individual’s “actual or purported passport or other immigration document, or any other actual or purported government identification document” where involved in human trafficking, slavery, involuntary servitude, or any other coercive labor practice. In addition to criminal consequences of such conduct, employers violating this law would be subject to a civil penalty of up to $10,000. AB 2732 would also require employers to conspicuously post a notice at work describing employees’ rights to hold their own immigration documents and how to contact the National Human Trafficking Hotline.
Second, under AB 2732, employers would be obligated to provide all employees (as of July 1, 2019) a “Worker’s Bill of Rights,” to be developed by the Department of Industrial Relations (DIR). The notice would summarize workers’ rights to minimum wage, freedom of movement, and possession of their immigration and identification documents. New hires would receive the notice prior to verifying their employment authorization; employers would provide existing staff with the notice once it is available. The notice would be signed by employees, with a copy given to them, and acknowledgements retained by employers for three years.
Under the California Labor Code, all employers must grant “a reasonable amount of break time to accommodate an employee desiring to express breast milk” for a child.2 Currently, employers must provide employees with a location, other than a toilet stall, that is near their work area, to express milk in private. Governor Brown is weighing two bills that would enhance existing protections for employees who require lactation breaks.3
The first such bill, AB 1976, clarifies that the lactation space must be some location other than a bathroom. This measure thus would remove the possibility that an employer could provide space within a bathroom as long as the space is not a toilet stall. It also details the circumstances under which an employer may provide a temporary lactation location and how agricultural employers may comply. AB 1976 would exempt employers if they can show undue hardship and otherwise make reasonable efforts to provide a lactation space other than a toilet stall.
The provisions of SB 937 would go much farther than its state-assembly counterpart, adding significant requirements for lactation space. SB 937 would specify that the lactation room or location must be shielded from view, free from intrusion, and clean and safe. Moreover, this space must offer a surface (like a table) to place a breast pump and personal items, a place to sit, and access to electricity. SB 937 would obligate employers to provide access to a sink and refrigerator for storing milk near the employee’s work area. Failure to comply with the lactation break or location requirements would constitute a failure to provide a rest period and could result in civil penalties. Employers would be prohibited from discriminating or retaliating against employees availing themselves of their rights under this law. Employers with fewer than 50 employees could request an exemption from the location requirements if they could show undue hardship in light of the size, nature, or structure of their business.
SB 937 would also require employers to implement a lactation accommodation policy, including an employee accommodation request procedure, to be issued to all employees. Under the bill, records of accommodation requests must be kept for three years. The Department of Labor Standards Enforcement would be tasked with creating a model lactation accommodation request form, and may also establish a model policy and related guidance, for employer use.
Labor Organizing: Home Care Aide Registry
Among all of the bills on his desk, one proposal—AB 2455—will look particularly familiar to Governor Brown. This measure is nearly identical to AB 1513, which he vetoed last year.
AB 2455 would amend the California Home Care Services Consumer Protection Act, which governs the licensing and registration of home care organizations. Currently, the State Department of Social Services maintains a registry of home care aides and applicants on its website. Although consumers can use this registry to confirm that a particular aide is licensed, an aide’s personal contact information is not available to the public.
AB 2455 would require the disclosure of certain information, however, to labor organizations. For any renewals or registrations of home care aides on or after July 1, 2019, the Department would provide an electronic copy of a home care aide’s name, telephone number, and cell phone numbers to unions, upon request. The bill would require advance written notice of this potential disclosure to home care aides and applicants beginning in July 2019. Under the bill, aides could opt out by requesting that contact information not be shared. Unions that received contact information would be forbidden from disclosing it to other parties or using it for reasons other than the organization and representation of employees.
Governor Brown vetoed the bill’s predecessor due to concerns about the release of contact information for aides who joined the registry without knowing that this information could be subject to disclosure. Although his rejection of AB 1513 in 2017 did not discuss any specific perceived flaws in detail, it is unclear whether or why he might change his mind and approve this year’s iteration.
Joint Employer Liability in Construction
Last year, California enacted a law (AB 1701) making direct contractors liable, under certain types of construction contracts, for unpaid wages, benefits, or contributions that a subcontractor owes for labor connected to the contract. AB 1701 further required subcontractors to provide required payroll records upon a direct contractor’s request.
When approving AB 1701, Governor Brown explained that the sponsors of that law committed to introduce legislation in 2018 to clarify some confusion over its scope. Those sponsors have delivered on their promise, in the form of AB 1565. This bill would strike language providing that the direct contractor’s liability for unpaid wages or benefits is in addition to any other existing rights and remedies. AB 1565 also explains that, in order for a direct contractor (or a higher-tiered subcontractor) to withhold disputed sums for a subcontractor’s failure to provide information, the contractor must have specified in the relevant contract the documents and information that must be provided on request. If signed into law, this legislation is intended to take effect immediately.
AB 2334 would amend the Labor Code with respect to certain workers’ compensation and health and safety provisions. As to the former, the bill would authorize the DIR to publish information about “the costs of administration, workers’ compensation benefit expenditures, and solvency and performance of public self-insured employers’ workers’ compensation programs.” No data could be released concerning private self-insured employers or individual identifiable claimants.
AB 2334 would also clarify that, under the California Health and Safety Code, record-keeping violations continue until corrected or discovered. The measure further acknowledges that the U.S. Occupational Health and Safety Administration (OSHA) issued a proposed rule to relax illness and injury reporting obligations adopted under the Obama administration. AB 2334 would provide that if OSHA “eliminate[s] or substantially diminishe[s] the requirement that employers electronically submit OSHA injury and illness data,” the DIR would convene an advisory committee to assess what changes might be needed at the state level to protect the goals of current OSHA requirements.
Women Directors in Publicly Held Corporations
One noteworthy bill pending before Governor Brown—SB 826—would require publicly held corporations, with principal executive offices located in California, to include women directors on their boards. This measure would require corporations to have at least one female director by the close of the 2019 calendar year. By the end of 2021, corporations with five or more directors on the board must include at least two female members. And boards with six or more board seats must include at least three women. Penalties may be imposed for failure to timely file board member information, if mandated by regulation; penalty amounts would start at $100,000 for a first violation and rise to $300,000 for subsequent violations.
The bill would also require the California Secretary of State to issue annual public reports indicating the number of compliant corporations, the number of corporations that moved their domestic headquarters in or out of California per year, and the number of publicly held corporations that were covered by the law in the prior year but are no longer publicly traded.
As Governor Brown considers these measures, California employers should read up on bills that have already been approved4 and should stay tuned for his forthcoming decisions. Littler’s Workplace Policy Institute (WPI) will continue to monitor developments out of Sacramento and will provide more in-depth analysis on bills that are enacted.