Seyfarth Synopsis: Governor Newsom has approved some of the bills most feared by employers, including bills to ban employment arbitration, extend FEHA administrative deadlines, codify the Dynamex ABC test, and create San Francisco-style lactation-accommodation requirements. Governor Newsom also vetoed a few bills that we might expect to be re-introduced in the same or similar form during 2020.

Governor Newsom acted before the stroke of midnight and under a full moon on his October 13 deadline to veto or approve bills passed during the first year of the 2019-2020 Legislative Session. Unfortunately for employers, he did not yield his veto pen as effectively as Governor Brown once did. Instead, Governor Newsom approved most of the bills feared by employers.

The parade of horribles for California employers is set to begin on January 1, 2020. Will a new moon bring constitutional challenges to the notorious AB 51? Will amendments during 2020 somehow make the new laws more palatable? Meanwhile, we summarize the new laws below—from the truly frightening to the merely annoying, with one or two examples of laws that arguably are welcome. Thereafter, we summarize bills that, while not making the cut this year, may come back to life next year. All new laws are effective January 1, 2020, unless otherwise noted.

APPROVED

Arbitration Prohibition. For agreements entered into, modified, or extended on or after January 1, 2020, AB 51 will prohibit any business from requiring that a job applicant or employee waive any right, forum, or procedure for a violation of the FEHA or Labor Code, including any requirement that an individual “opt out” or take affirmative action to preserve such rights. AB 51 will make actionable any threatened or actual retaliation against an individual who refuses to consent to the forbidden requirements. AB 51 will authorize injunctive relief and attorney’s fees to any plaintiff who proves a violation. These provisions of AB 51 are very similar to part of last year’s AB 3080, which was vetoed due to its likely preemption by the Federal Arbitration Act, and this bill includes a severability clause in an attempt to avoid preemption. This attempt is arguably illusory, and will likely find itself challenged as another unconstitutional attempt by the California Legislature to forbid arbitration agreements. As the result of some unclear drafting, and although the author of the bill has claimed to the contrary, AB 51 may call into question the use of traditional settlement and severance agreements. Read our discussion of AB 51’s scary implications here.

Settlement Agreements Future Employment Restraints. AB 749 will prohibit settlement agreements that restrict an employee right to seek employment with the employer with whom the employee is settling a claim.

Independent Contractors Worker Status. AB 5 codifies the California Supreme Court’s 2018 decision in Dynamex Operations West, Inc. v. Superior Court, while also specifying some heavily-lobbied-for exemptions. See our in-depth analysis of it here and here. Governor Newsom signed the bill into law on Wednesday, September 18, 2019.

Independent Contractors Worker Status. AB 170 slides another exemption into AB 5, via a separate bill, for a newspaper distributor working under contract with a newspaper publisher and a newspaper carrier working under contract with either a newspaper publisher or distributor, until January 1, 2021.

Arbitration Agreement Fees/Costs. SB 707 will require an employer or drafter of an arbitration agreement to pay the costs and fees associated with the arbitration. Failure to pay the fees could constitute material breach of the arbitration agreement, or the employee could withdraw the claim from arbitration, or be entitled to attorney’s fees and costs. The bill will also require a private arbitration company to collect and report aggregate demographic data regarding the ethnicity, race, disability, veteran status, gender, gender identity, and sexual orientation of all arbitrators.

Lactation Accommodation. Borrowing from provisions of a San Francisco lactation ordinance, SB 142 will expand California lactation-accommodation law by requiring employers to provide a lactation room for employees that meets the following requirements: not a bathroom; in close proximity to the employee’s work area; shielded from view; free from intrusion while the employee is lactating; safe, clean, and free of hazardous materials; containing a surface to place a breast pump and personal items; containing a place to sit; with access to electricity or alternative devices (e.g., extension cords, charging stations) that may be needed to operate an electric or battery-powered breast pump; and with access to a sink with running water and a refrigerator suitable for storing milk. If a multipurpose room is used for lactation and other uses, lactation must take precedence over the other uses.

The bill will make a denial of lactation break time or space a violation under rest period laws, and subject the employer to a $100 penalty per violation. The bill contains an anti-retaliation provision and will also require an employer to develop and implement a policy regarding any lactation accommodations, and make it readily available to employees. This inordinately comprehensive bill is a repeat of SB 937 (2018), which Governor Brown vetoed given his approval of a less onerous lactation accommodation law, AB 1976. The new law has an undue hardship exemption for employers with fewer than 50 employees.

Penalties for Failure to Pay Wages. AB 673 will authorize an employee to pursue a private right of action to recover penalties for the late payment of wages through the Private Attorneys General Act, and will remove the authority for the Labor Commissioner to recover civil penalties in an independent civil action. The bill will prohibit the employee from also recovering statutory penalties for the same violation.

FEHA Administrative Exhaustion Extension. A repeat of 2018’s AB 1870, vetoed by Governor Brown, AB 9 will extend the period within which an aggrieved person may file a complaint with the DFEH from one year to three years. (It does not revive lapsed claims.)

Labor Commissioner Citations. SB 229 will expand the appeal and enforcement mechanisms available when the Labor Commissioner cites an employer for violating the Labor Code’s anti-retaliation provisions. The bill will establish procedures and deadlines to follow when adjudicating or contesting a citation. SB 688 will expand the Labor Commissioner’s citation authority to include citations for failures to pay contract wages when the employer had paid an employee below minimum wage.

Organ Donation Leave of Absence. AB 1223 will require employers to grant an employee an unpaid leave of absence—in addition to the existing one-year paid leave—for the purpose of organ donation. The bill will require a public (not private) employee to first exhaust all available sick leave before taking the unpaid leave.

Sexual Harassment Training. As we reported, SB 778 extends the deadline for non-supervisory employee training from January 1, 2020 until January 1, 2021 and confirms—in a much needed clarification—that those supervisors who received 2018 training need not be trained again until 2020.

Hairstyle Discrimination. SB 188, the Crown Act, expands the FEHA’s definition of race to include traits historically associated with race, such as hair texture and “protective hairstyle” (e.g., braids, locks, and twists). The bill aims to chip away at “Eurocentric” professional norms by addressing “workplace dress code and grooming policies that prohibit natural hair, including afros, braids, twists, and locks.” The Legislature has concluded that these policies “have a disparate impact on Black individuals as these policies are more likely to deter Black applicants and burden or punish Black employees than any other group.”

Reporting Occupational Injuries and Illnesses. AB 1804 will require employers to report serious workplace injuries, illnesses, or death immediately by telephone or through an online platform to be developed by the Division of Occupational Safety and Health. Until the online platform is available, employers are permitted to make these reports by telephone or email. Noncompliance carries a $5,000 civil penalty.

Civil Action Damages: Gender, Race Ethnicity. SB 41 aims to narrow the consequences of observed differences in the pay of groups defined by gender or ethnicity. This bill will apply to personal injury and wrongful death cases, and will forbid any reduction in damages resulting from an estimation, measure, or calculation or past, present, or future damages for lost or impaired earning capacity that is based on a person’s race, ethnicity, or gender.

Paid Family Leave Expansion & Task Force. Under SB 83, beginning July 1, 2020, the California Paid Family Leave benefit will be eight weeks instead of six weeks, paralleling an increase in San Francisco’s Paid Parental Leave benefit. The bill requires the Governor’s Office to convene a task force to develop a proposal by November 2019 to extend the duration of paid family leave benefits to six months by 2021-22 for parents to care for, and bond with, their newborn or newly adopted child. The November 2019 proposal will also address job protections for workers and the goal of providing a 90 percent wage replacement rate for low-wage workers utilizing the Paid Family Leave program to bond with a child. Approved by Governor Newsom on June 27, 2019, the bill became effective immediately.

Workplace and School Gun Violence Restraining Orders. Beginning September 1, 2020, AB 61 will authorize an employer, or a coworker who has had substantial and regular interactions and approval of their employer, to file a petition for an ex parte, one-year, or renewed gun violence restraining order.

Industry-Specific Laws

Collegiate Athlete Compensation. AB 1518 will allow student athletes to contract with agents without losing their student athlete status—provided the contract complies with the student’s educational institution’s requirements and the bylaws of the NCAA—and to receive compensation. The Fair Pay to Play Act, SB 206, will among other things, beginning January 1, 2023, allow student athletes to more easily earn compensation from endorsements. While LeBron James and Draymond Green have praised the bill, the NCAA has strongly opposed it, stating in a letter to the Governor that it has the potential to kill amateur athletics and “erase the critical distinction between college and professional athletics.”

Employment of Infants in the Entertainment Industry. AB 267 will expand the definition of “entertainment industry” beyond a movie set or location to include motion pictures, theater, television, photography, recording, modeling, rodeos, circuses, advertising, and any other performance to the public. The bill will require that all qualifying entities receive—as a prerequisite to employment of an infant under one month of age—a licensed, board-certified pediatrician’s certification that the infant is at least 15 days old, was carried to full term, was of normal birth weight, is physically capable of handling the stress of working in the entertainment industry, and has sufficiently developed lungs, eyes, heart, and immune system to withstand the potential risks.

Employment of Motion Picture Production Workers. SB 271 will allow temporary or transitory employment performed outside of California to count towards unemployment benefits as long as the individual is a California resident, is hired and dispatched from the state, and intends to return to the state to seek reemployment following the outside-California work.

Payment of Wages for Print Shoot Employees. SB 671, the “Photoshoot Pay Easement Act,” authorizes payment of wages to “print shoot employees”—defined as individuals hired for a limited duration to render services relating to or supporting a still-image shoot for use in print, digital, or internet media—on the next regular payday after the employment ends, rather than subjecting the employer to liability for failure to pay final wages on the last day of employment. In another break for employers, the final wages can be mailed to the employee or made available to the employee at a location specified by the employer in the county where the employee was hired or performed labor and the payment is deemed to have been made on the date of mailing or being made available to the employee at the specified location. The bill thus creates an exception mirroring the one existing for motion picture employees. The bill’s urgency clause—making it effective immediately upon its September 5, 2019 signing—highlights what a relief its passage will be to businesses that use short-term models and that have faced legal actions threatening sometimes huge potential liability under the prior law.

Sexual Violence and Harassment Prevention Training for Janitorial Workers. AB 547, the Janitor Survivor Empowerment Act, will require the Director of the Department of Industrial Relations to organize a training advisory committee that will generate a list of qualified organizations and trainers that janitorial employers would be required to use to provide biennial, in-person sexual violence and harassment prevention training for janitorial workers. This requirement is in addition to the Property Service Workers Protection Act that kicks in on January 1, 2020, which we previously covered here.

Occupational Safety and Health for Valley Fever. AB 203 will require construction employers operating in counties where Valley Fever—a microscopic fungus which lives in the top few inches of the soil in many parts of California—is “highly endemic,” to provide effective training on the disease to employees annually and before an employee is anticipated to cause substantial dust disturbance.

Continuing Education: Implicit Bias in the Medical Field. AB 241 will require, by January 1, 2022, that continued education for physicians, surgeons, nurses and physician assistants include courses on implicit bias. The bill will require the Board of Registered Nursing and the Physician Assistant Board to adopt regulations requiring implicit bias training by January 1, 2022.

California Family Rights Act: Flight Crews. AB 1748 amends the California Family Rights Act to conform flight deck and cabin crewmember eligibility requirements with the federal Family and Medical Leave Act, which has special hours of eligibility for airline flight attendants and other cabin crew. Flight attendants are eligible for FMLA if, during the previous 12 months, they have worked at least 504 hours and have been paid at least 60% of the monthly guarantee, which means that they worked 60% of the minimum number of hours which the employer scheduled the employee for any given month.

Sexual Harassment Training: Construction and Temporary Employees. SB 530 will extend the date by when seasonal, temporary, or other employees that are hired to work for less than six months must begin receiving mandatory sexual harassment training to January 1, 2021, and incorporate special training provisions for construction industry employers that employ workers pursuant to a multiemployer collective bargaining agreement.

VETOED

Sexual Harassment Retaliation Protection. Very similar to AB 3081 (2018), AB 171 would have amended the Labor Code to add sexual harassment to the prohibitions on an employer from discriminating or retaliating against an employee because of the employee’s status as a victim of domestic violence, sexual assault, or stalking. The bill would have also created a rebuttable presumption of retaliation if the employer takes an adverse action against the employee within 90 days of notice of the employee’s status as a victim. In vetoing the bill, Governor Newsom wrote that while he supports the “Legislature’s efforts to strengthen workplace protections for all survivors of harassment and abuse,” he thought this bill would create “a standard for a particular form of sex-based discrimination different from applicable standards for other forms of discrimination that could weaken, rather than strengthen, existing worker protections.” He correctly recognized that incorporating sexual harassment into the Labor Code “duplicates, and in some crucial respects, weakens existing law” under the FEHA, which already provides a protections and remedies sought through this bill, and this bill could create overlapping claims with the DFEH and the Labor Commission, which “could create confusion and potentially limit workers’ rights.” He concluded by encouraging the Legislature and DFEH to work together to “evaluate if and how the FEHA can be enhanced to better protect survivors of sexual harassment against unlawful employment practices.”

Division of Labor Standards Enforcement for Complaints. AB 403 would have extended the statute of limitations for complaints alleging workplace retaliation from six months to two years, and would authorize attorney fees to any employee who successfully sues for retaliation based on whistleblowing. In vetoing the bill, the Governor acknowledged the Legislature’s other anti-retaliation measures, which provided greater authority to the Labor Commissioner, as recognition that action by the Labor Commissioner is likely more effective than extending a statute of limitations period past one year.

Unfair Immigration-Related Practices. AB 589 would have imposed penalties on an employer that withholds an employee’s immigration-related documents and would create a Worker’s Bill of Rights concerning the employee’s freedom of movement and the payment of wages. The Governor wrote that the bill’s “requirement that every employer in the state provide each employee with an enumerated list of rights” attracted his veto, as “overly burdensome for law-abiding employers” and because it “may not actually help workers who are the targets of trafficking.” He did cite the bill’s provision that would levy a hefty fine on employers who engage in document abuse to commit trafficking as a “step in the right direction.”

Leave Rights: Private Cause of Action. AB 1478 would have amended Labor Code section 230 to authorize a private right of action (as an alternative to the existing remedy of filing a complaint with the Labor Commissioner) by an employee who takes time off for jury duty, for legal proceedings relating to being a victim of a crime, and for retaliation for being a victim of domestic violence, sexual assault, or stalking. The bill would also have made the same changes to Section 230 as AB 171 (discussed above) if AB 171 is approved and AB 1478 is approved after AB 171 (to ensure that AB 171’s provisions also become law). The Governor vetoed AB 1478 as “unnecessary” because current law already authorizes “survivors of domestic violence, sexual assault or stalking” “to file a retaliation claim through the [Labor Commissioner’s] Office or through a PAGA action, and to see reinstatement and reimbursement for lost wages and benefits.”

Local Government Enforcement of FEHA. SB 218 would have amended the FEHA to allow local governments within the County of Los Angeles to enact and enforce their own antidiscrimination laws that are at least as protective as the FEHA, removing these claims from the sole jurisdiction of the DFEH. In vetoing the bill, the Governor cited other bills he approved as evidence of his commitment to eradicating discrimination, but noted he does not support this bill’s effort to lift a decades-long preemption which could create confusion, inconsistent enforcement of the law, and increased costs, without increased worker protections, and ambiguity regarding local governments’ ability to enforce both local ordinances and the FEHA. He invited the Legislature to try again “with a measure that makes it clear that local enforcement measures are exclusively focused on local ordinances.”

Call Center Protections. AB 1677 would have required any employer with a call center currently in the state intending to relocate the call center to notify the Labor Commissioner at least 120 days before the relocation or face a civil penalty. In his veto message, the Governor noted that while he supports efforts to protect jobs in the state, but this bill might have the opposite effect – “dissuad[ing] businesses that have no intention of moving operations from making any further investments in California.”