In the wake of the #MeToo movement, many states have been making concerted efforts to address and prevent sexual harassment through proposed legislation. On July 9, California Governor Jerry Brown signed one of those proposals, Assembly Bill 2770, into law. This measure targets defamation claims stemming from sexual harassment allegations. Under the law, certain employee and employer statements regarding sexual harassment allegations are deemed privileged and therefore cannot be used to support a defamation claim.

The impetus for this legislation arose during a California Senate Judiciary Committee meeting held to reassess sexual harassment law in California. Experts testifying before the Committee claimed the state’s defamation laws have been used to deter victims, witnesses, and former employers from sharing information about harassers with others. Defamation in California includes false and unprivileged statements, written or oral, with a tendency to cause damage to the reputation of another person. An allegation of sexual harassment can negatively impact a person’s reputation, and if the allegation cannot be proven, the individual or employer making the allegation could be charged with defamation. To avoid this outcome, the new law considers certain communications about sexual harassment privileged.

Statements considered to be privileged and therefore not subject to claims of defamation in California already include communication from a former employer to a potential employer concerning the job performance and qualifications of a job applicant. If a potential employer asks a former employer if it would rehire the applicant, it is privileged communication for the employer to say it would not rehire the applicant based on the applicant’s job performance. The new law extends the scope of that privilege to allow former employers to say it would not rehire an applicant based on the employer’s determination that the former employee committed sexual harassment.

The law also amends the section of the privileged communication law to include complaints of sexual harassment made by an employee to an employer.

According to the bill's analysis, California legislators hope this new law will encourage victims and employers to report and share information regarding their experiences of sexual harassment. Some lawmakers in the California Senate Judiciary Committee expressed concern, however, that the law could lead to intentionally spurious claims motivated by the desire to harm the accused’s reputation, without the fear of reprisal. The California legislature therefore included the requirement that the statement must be made “without malice” to be privileged. Under California law, a “malicious statement” is one motivated by hatred or ill will, or that is recklessly made without reasonable grounds for believing that the claim is true. An accused individual will still be able to bring a claim of defamation based on statements made by an employee to their employer, or by a former employer to a prospective one, but the accused has to meet the higher bar of showing that the statement was made with hatred, ill will, or reckless disregard for the statement's truth.

This law will take effect on January 1, 2019.