In the last several months of 2018, the California Legislature enacted many new statutes to keep employers hopping – following a sea-change decision by the California Supreme Court earlier in the year in Dynamex Operations West, Inc. v. Superior Court, 4 Cal.5th 903 (2018), which adopted a test for classification of workers that imposes more restrictions on treating them as contractors instead of employees. (https://weinbergerlawblog.com/2018/05/09/the-abcs-of-the-worker-classification-the-california-supreme-courts-new-dynamex-standard-expands-employee-protections/)
The new laws require employers (1) to amend their settlement agreement templates to eliminate certain confidentiality provisions when settling a sexual harassment claim; (2) to delete provisions in such agreements waiving employees’ rights to testify in legal proceedings about the harassment; (3) to expand training of supervisorial and non-supervisorial employees on sexual harassment and prevention of abusive conduct; (4) to protect employees from harassment by non-employees on all grounds prohibited by the California Fair Employment and Housing Act (FEHA), not just sexual harassment; and (5) to provide more accommodating space for a lactating employee to express milk. (6) One new law expands protections against sexual harassment for persons in a contractual or professional relationship with an alleged harasser. (7) Amendments to the Fair Pay Act clarify restrictions on an employer’s use of pay history and on questions about pay that an employer may ask of an applicant.
Employers should take heed of the following laws, some of which are effective January 1, 2019:
- Do Settle, Do Ask and Do Tell: SB 820 adds section 1001 to the California Code of Civil Procedure to prohibit inclusion in a settlement agreement entered into on or after January 1, 2019 of “a provision . . . that prevents the disclosure of factual information related to a claim filed in a civil action or a complaint filed in an administrative action” for sexual harassment under section 51.9 of the California Civil Code or sexual harassment, discrimination, “or failure to prevent an act of workplace harassment or discrimination based on sex or an act of retaliation against a person for reporting harassment or discrimination based on sex, under the FEHA. Except where a “government agency or public official is a party to the settlement agreement,” at the claimant’s request, the agreement may include a provision to shield his or her identity or facts that “could lead to the discovery of” the claimant’s identity. Notwithstanding these prohibitions, a settlement agreement may prohibit disclosure of the amount paid in settlement. Failure to comply with these prohibitions on contractual confidentiality provisions can form the basis for a civil action against an employer.
The ability to keep all aspects of a settlement confidential had been a motivating factor for some employers to resolve cases short of litigation, but the concern over how confidentiality has prevented employees and claimants from protecting themselves from serial predatory supervisors outweighed the possible consequence of pushing more employers to fight what they view as meritless claims rather than settle. The ability to shield the amount of settlement could still incentivize employers to settle, but it is unclear whether the publicity surrounding settlement will outweigh any benefit that limited shield will provide.
- Related Do Tell: AB 3109 adds section 1670.1 to the California Civil Code to make explicit what California public policy and case law already mandates: Any provision in a settlement agreement “that waives a party’s right to testify in an administrative, legislative, or judicial proceeding concerning alleged criminal conduct or alleged sexual harassment on the part of the other party to the . . . settlement agreement, or on the part of the agents or employees of the other party, when 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, is void and unenforceable.” The law is effective as to settlement agreements entered into on or after January 1, 2019. Any employers that had not already made clear in their settlement agreements that the agreement would not prevent the claimant from testifying in legal proceedings should amend their agreement forms immediately.
- Further Related Do Tell: In addition to the prohibitions against certain contractual confidentiality provisions in settlement agreements, as described above, employers are prohibited, as of January 1, 2019, from requiring an employee “to sign a nondisparagement 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.” (Bus. & Prof. Code § 5(a)(2).) The new law explicitly excludes a “negotiated” settlement agreement, where the employee has been given “notice and an opportunity to retain an attorney or is represented by an attorney.”
- Expanded Training Requirement: SB 1343 expands the scope of employers that must provide training on prevention of sexual harassment and abusive conduct from those with 50 or more employees to those with five or more employees. Employers with five or more employees must provide two hours of such training to supervisory employees and one hour of such training to non-supervisory employees within six months of employment and thereafter every two years. The training must be provided by January 1, 2020.
- Expanded Employer Liability for Discrimination/Harassment of Employees by Non-employees: The FEHA has been amended effective January 1, 2019, to expand protections of employees against harassment. In determining whether a work environment is hostile in connection with a harassment claim under FEHA, that is, whether the conduct at issue is “severe or pervasive,” which is the rubric under which such cases are determined, “[a] single incident of harassing conduct is sufficient to create a triable issue regarding the existence of a hostile work environment if the harassing conduct has unreasonably interfered with the plaintiff’s work performance or created an intimidating, hostile, or offensive working environment.” (Cal. Bus. & Prof. Code § 12923(b), (c).) Therefore, evidence of a single incident can defeat an employer’s motion for summary judgment/adjudication of such a harassment claim. The revised law states: “Harassment cases are rarely appropriate for disposition on summary judgment.”
In addition, the liability of employers for harassment of employees by non-employees has been expanded, effective January 1, 2019, to include all prohibited harassment based upon all classifications (not just sex) under FEHA. “An employer may . . . be responsible for the acts of nonemployees, with respect to harassment of employees, applicants, unpaid interns or volunteers, or persons providing services pursuant to a contract in the workplace, if the employer, or its agents or supervisors, knows or should have known of the conduct and fails to take immediate and appropriate corrective action.” (Cal. Bus. & Prof. Code § 12940(j)(1).)
- Expanded protections against sexual harassment for persons working under a contractual relationship: SB 224 amends section 51.9 of the California Civil Code to add the following categories to the list of professionals who could be found liable for sexual harassment to a person with whom the professional has a business or contractual relationship: an investor, elected official, lobbyist, director, and producer. The other amendments to section 51.9 make a claim for sexual harassment easier to prove, (a) by adding that a plaintiff could show sexual harassment where “the defendant holds himself or herself out as being able to help the plaintiff establish a business, service, or professional relationship with the defendant or a third party;” and (b) by eliminating the requirement that the plaintiff show “there is an inability by the plaintiff to easily terminate the relationship.”
- Expanded Lactation Accommodation: AB 1976 amends California Labor Code section 1031 to require employers to make reasonable efforts to provide a lactating employee with the use of room other than a bathroom to express milk in private. Existing law required only that the employer make reasonable efforts to provide such a room other than a toilet stall. The other amendments to this provision establishes safe harbors for an employer providing a temporary lactation area and for agricultural employers.
- Clarified Employer Obligations under the Fair Pay Act: Effective January 1, 2019, the Fair Pay Act statute has been clarified by defining the terms, “pay scale” to mean “a salary or hourly wage range”, and “reasonable request” to mean “a request made after an applicant has completed an initial interview with the employer,” and “applicant” to mean an individual who is seeking employment with the employer and is not currently employed with that employer in any capacity or position.” These definitions apply to the provision: “An employer, upon reasonable request, shall provide the pay scale for a position to an applicant applying for employment.” And the definition of “applicant” applies to the other provisions of the statute as well.
The amendment to the Fair Pay Act also clarifies that the Act does not prohibit an employer from asking an applicant about the applicant’s salary expectations. And it clarifies that prior salary is not justification for any disparity in compensation, and that an employer is not prohibited from making “a compensation decision based on a current employee’s existing salary, so long as any wage differential resulting from that compensation decision is justified by one or more of the factors” listed in section 1197.5 of the Labor Code.
Employers should have written pay scale information prepared before they receive a request for pay scale information, so that they can thoroughly think it through without the time pressure of responding to such a request.