California recently passed legislation intended to provide enhanced protection from defamation claims by alleged sexual harassers against employers who have terminated them, and against victims who have accused them of workplace sexual harassment. AB 2770, signed into law by Governor Jerry Brown on July 9, 2018, expands the definition of a “privileged communication” as a defense to defamation claims brought by an alleged sexual harasser.

The California Chamber of Commerce sponsored AB 2770 out of concern that existing law discouraged employers from sharing relevant information, thereby perpetuating a cycle of harassment that enabled repeat sexual harassment offenders to find other employment.

The amendment protects complaints of sexual harassment made by an employee to an employer that are made “without malice” and that are based on “credible evidence.” It also protects communications made “without malice” by a current or former employer to “interested persons,” regarding a complaint of sexual harassment. An “interested person” includes anyone who an employer “reasonably believes” is a prospective employer of the applicant.

The amendment also creates a privilege that authorizes a former employer, upon request, to inform a prospective employer that a current or former employee is not eligible for rehire based upon the employer’s determination that the current or former employee engaged in sexual harassment. Again, the statements about the current or former employee must be made “without malice” to qualify for protection. The malice necessary to defeat the privilege requires a showing either that the statement was made with “hatred or ill will” toward the current or former employee, or by a showing that the employer lacked reasonable grounds for believing in the truth of the statement.

What does this mean for California employers?

California law currently provides protection for statements made by one interested person to another interested person if the statements are made without malice. The statute specifically includes statements made about the job performance or qualifications of an applicant by a former employer to a prospective employer. Despite this statutory protection, however, some employers have been hesitant to provide substantive information about a current or former employee for fear of claims of defamation. Because of these concerns, many California employers provide only dates of employment and last position held.

Whether employers will now feel comfortable enough to share information with other employers about sexual harassment offenders remains an open question because the protection it affords is not absolute and, as with the current statute, the amendment leaves room for debate about whether the person making the statement acted “without malice.”

Moreover, the amendment may raise complaints about fairness from employees who are accused of sexual harassment, because, other than the absence of malice, there are no minimum due process or investigation standards that apply to an employer’s determination that sexual harassment occurred. The absence of such standards creates the potential for abuse and harm to the reputations of persons who may have been unfairly accused.

Because the amendment is new and the law of defamation complex, employers who are asked by third parties for information about employees who have been terminated because of sexual harassment should seek guidance from experienced counsel before responding.