Update — Important Changes In Sexual Harassment And Other Laws In California

Outgoing Governor Jerry Brown signed dozens of bills into law on Sunday, September 30, 2018. Many of these new laws are in response to the #metoo movement and specifically target sexual harassment. This blog summarizes the key features of these laws and their effect on employers as well as others, such as VCs, who can now be held legally responsible under the sexual harassment laws for harassing non-employee persons who work for actual or potential portfolio companies.

These laws highlight the importance of regularly reviewing and revising training as well as anti-harassment, discrimination, and retaliation policies. Additionally, employers must keep these laws in mind in connection with their ability to negotiate effective settlement agreements.

Key takeaways

  • Professional services businesses (for example, investors) can now be liable for sexual harassment even absent an employer-employee relationship, and liability for harassment by nonemployees goes beyond sexual harassment.
  • Agreements with employees may not prevent them from discussing harassment claims or other unlawful conduct, with new limitations when settling harassment or discrimination claims.
  • California employers (now defined more expansively as 5 or more employees) must:
    o Provide one hour of training to nonsupervisory employees by the end of next year (and every two years thereafter); and
    o Provide two hours of training to supervisory employees by the end of next year (and every two years thereafter).
  • California employers must provide a broader range of accommodations.

Expansion of liability

These laws expand the parties who can be potentially liable for harassing acts:

SB 224 – Establishes broader liability for sexual harassment where there is a professional relationship

This law establishes liability for sexual harassment where the plaintiff proves that there is a business, service, or professional relationship between the defendant and the plaintiff. A plaintiff no longer needs to prove that he or she is not able to easily terminate the relationship. This law provides additional examples of professional relationships where liability for claims of sexual harassment may arise, including 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 or where the defendant is an investor, elected official, lobbyist, director, producer, attorney, holder of a master’s degree in social work, real estate agent, or real estate appraiser.

SB 1300 – Unlawful employment practices: discrimination and harassment

This law provides that the “employer may be responsible for the acts of nonemployees with respect to other harassment activity” if the employer “knows or should have known of the conduct and fails to take immediate and appropriate corrective action.” This expands prior law by including potential liability for any harassing act, not just sexual harassment.

Limits on confidentiality and other provisions

These laws affect an employer’s ability to limit its employees from disclosing claims of sexual harassment or assault in the workplace:

AB 3109 – Bans waiver of right to testify

This law renders void new contracts (or settlement agreements) that waive a party’s right to testify in an administrative, legislative, or judicial proceeding concerning alleged criminal conduct or alleged sexual harassment. This bill only applies to contracts formed on or after January 1, 2019.

SB 820 – Limits confidential settlement agreements

This law is designed to ensure greater transparency with respect to claims of sexual harassment and assault. It renders void new settlement agreements that prevent the disclosure of factual information about civil or administrative complaints of (1) sexual assault, (2) sexual harassment, (3) workplace harassment or discrimination based on sex, and/or (4) retaliation against a person for reporting harassment or discrimination based on sex. This bill permits agreements that prevent the disclosure of (1) information that would identify the claimant, so long as the claimant has requested anonymity and the opposing party is not a government agency or public official and (2) information about the amount paid in settlement of a claim. This bill only applies to new settlement agreements formed on or after January 1, 2019.

SB 1300 – Unlawful employment practices: discrimination and harassment

This law prevents employers from requiring an employee to release a claim in exchange for a raise or bonus, or as a condition of employment or continued employment.

It also prohibits employers from requiring an employee to sign a non-disparagement agreement 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 do 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.

Additional employer requirements

These laws obligate employers to provide additional training and accommodations:

SB 1343 – Requires more employers to provide sexual harassment training

This law requires employers with five or more employees (existing law only applied to employers with fifty or more employees), including temporary or seasonable employees, to provide at least two hours of sexual harassment training to all supervisors and at least one hour of sexual harassment training to all nonsupervisory employees by January 1, 2020, and one hour every two years thereafter.

AB 1976 – Requires employers to provide lactation accommodations

Existing law requires employers to (1) provide a reasonable break to an employee who “desir[es] to express breast milk for the employee’s infant child” and (2) make “reasonable efforts” to provide the employee with the use of a private room or other location, other than a toilet stall, in close proximity to the employee’s work area.

This law clarifies the term “reasonable efforts.” Specifically, employers may provide a temporary lactation location, so long as: (1) the employer is unable to provide a permanent lactation location because of operational, financial, or space limitations; (2) the temporary lactation location is private and free from intrusion while in use by the employee; (3) the temporary lactation location is used only for lactation purposes while in use by the employee; (4) the temporary lactation location otherwise meets the requirements of state law concerning lactation accommodation. Agricultural employers are in compliance if they provide the employee with access to “a private, enclosed, and shaded space, including, but not limited to, an air-conditioned cab of a truck or tractor.”

AB 2079 – Requires employers to provide sexual violence and harassment prevention training to janitorial workers

This law bolsters existing sexual harassment and violence prevention training and prevention measures to empower janitors to prevent rape during night shifts. Specifically, all employers with at least one employee who provides janitorial services must complete detailed sexual harassment violence prevention requirements and provide an attestation to the Labor Commissioner. Upon employee request, the employer must provide an employee with copies of all training materials used during a training he or she attended.

The law would also prohibit the Labor Commissioner from approving a janitorial service employer’s request for registration or for renewal if the employer has not fully satisfied a final judgment to a current or former employee for a violation of the FEHA.

AB 3082 – Requires In-Home Supportive Services to provide sexual harassment training

This law requires the In-Home Supportive Services program to develop or otherwise identify standard educational material about sexual harassment and the prevention thereof, to make such material available to providers and recipients, and to provide a proposed method for uniform data collection to identify the prevalence of sexual harassment in the program.

AB 2338 – Requires talent agencies to provide education and training on sexual harassment

This law requires a talent agency to provide its artists access to educational materials on (1) sexual harassment prevention, retaliation, and reporting resources and (2) nutrition and eating disorders.

Further, the law requires that, before an employer can obtain a permit to employ a minor in the employment industry, the minor and the minor’s parent or legal guardian receive and complete training in sexual harassment prevention, retaliation, and reporting resources. The bill would further require a talent agency to request and retain a copy of the minor’s entertainment work permit prior to representing or sending a minor artist on an audition, meeting, or interview for engagement of the minor’s services.

We have extensive litigation and counseling experience regarding these issues. If you would like to discuss any of these issues, please contact us.

Class Certification Defeated in Twitter Gender Discrimination Case

Recently, another technology company defeated class certification in a gender discrimination lawsuit. On July 3, 2018, a California state court judge denied female Twitter employees class certification in a lawsuit entitled Huang v. Twitter. This ruling follows a federal judge’s denial of class-action status to females in a gender bias case against Microsoft Corporation. Similar cases are currently pending against Google and Oracle.

In Huang v. Twitter, the named plaintiff, Tina Huang, initially sued Twitter in 2015 and alleged that Twitter wrongly fired her, and that Twitter’s promotion process leads to an environment where female employees are less likely to be promoted than their male counterparts. The case is venued in San Francisco Superior Court, where Judge Mary Wiss found the 135 current and former female technical employees in the putative class could not proceed as a class because they did not have enough in common in terms of allegedly being held back from promotions and receiving raises based on their gender.

In trying to establish class certification, Huang alleged managers act as “gatekeepers” to better jobs at Twitter by deciding who is nominated and/or considered for a promotion. Huang alleged that Twitter instituted a “uniform practice” of allowing managers to nominate software engineers for promotion if they met certain criteria, which disparately impacted women. She also relied upon Twitter’s 2014 promotion policy to argue that there were common issues of law and fact, such as how managers nominating candidates for promotion were instructed to consider employees’ concrete contributions to projects or the overall quality of their work. Huang relied upon declarations from class members describing a “brogrammer” culture at Twitter, and a 2017 report by an economist and statistician, which concluded that fewer females were promoted when compared to their male counterparts.

In relying upon the U.S. Supreme Court’s Walmart Stores v. Dukes standard, Judge Wiss held that the putative class could not show that Twitter had a “common mode of exercising discretion” for denying promotions to women as the employees’ individual allegations were too diverse to proceed as a class. Likewise, the Court held that the Huang “failed to satisfy her burden of presenting substantial evidence to show that managers at Twitter acted as “gatekeepers” with respect to the promotion process involving the putative class,” and that Duke’s “common mode” standard was not met since managers’ discretion was not uniform. As such, Huang did not satisfy the “community of interest” standard that would allow the case to proceed as a class action.

The Court also found that Huang failed to establish that her claims were “typical” of the entire class because, unlike the class she sought to represent, Plaintiff’s promotions were not hindered by her manager’s “gatekeeping.” Lastly, the Court found that Plaintiff failed to demonstrate that a class action was the superior method for resolving the case as numerous individual factual inquiries would have to be made regarding whether or not individual managers acted as “gatekeepers” regarding the promotion process.

Thus, the Huang case can be cited by technology (and other) companies to defend against class claims based on alleged gender bias.

We have extensive counseling and litigation experience in the class action area. If you would like to discuss these issues further, or have any questions about this blog, please contact us.

New Protections For Employers Reporting Sexual Harassment Claims In Reference Checks

California employers for the most part play it safe by following their job reference policies allowing them to state period of employment, job title, and possibly compensation (with the employee’s consent). For those who go beyond these basics, there is a dilemma when asked to respond to a reference check regarding a former employee who has had his or her employment terminated due to an accusation of sexual harassment. Thus, by informing a future employer of an employee’s misconduct, the former employer opens itself up to a defamation claim by an employee claiming he or she was falsely accused. (more…)

The U.S. Supreme Court Upholds Class Action Waivers In Employment Arbitration Agreements

The United States Supreme Court has issued its much-anticipated opinion in Epic Systems Corp. v. Lewis, 584 U.S. __ (2018), and two companion cases. In a decision that will be welcomed by employers, the Court has upheld the use of arbitration agreements with class action waivers that require employees to litigate any claims against their employers individually in arbitration. Specifically, the Court has held that class action waivers in arbitration agreements between employers and their employees do not violate the National Labor Relations Act (NLRA) by preventing employees from engaging in protected concerted activity. (more…)

The New “ABC Test” For California Employees and Its Potential Impact On The “Gig Economy” And Otherwise

On April 30, 2018, the California Supreme Court issued its decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles County, 2018 Cal. LEXIS 3152 (Cal. Apr. 30, 2018), announcing new guidelines that could result in widespread reclassification of California workers and, at the least, presents significant new challenges for certain employers. (more…)

Equal Pay Update: Ninth Circuit Ruling re Salary History

The Ninth Circuit has recently ruled that salary history cannot be used to justify a wage gap between men and women. Specifically, in Rizo v. Yovino, Case No. 16-15372 (9th Cir. April 8, 2018), the Ninth Circuit held that a “factor other than sex” under the federal Equal Pay Act must be “job-related” and the court therefore rejected an employer’s use of pre-employment salary history as a reason to pay females less than males performing the same work. (more…)

California Supreme Court Explains How to Calculate Overtime Pay When Non-Exempt Employees Earn Flat Sum Bonuses

On March 5, 2018, the California Supreme Court issued its long-awaited opinion in Alvarado v. Dart Container Corporation of California, Case No. S232607 (Cal. Sup. Ct., March 5, 2018). The opinion resolves a dispute between an employer and a former employee regarding how his overtime wages should have been calculated for workweeks in which he worked overtime hours and also earned a flat sum bonus. (A flat sum bonus is a bonus whose amount is fixed regardless of the number of hours the employee works.) The calculation method urged by the employee, which would result in slightly higher overtime pay, would treat the bonus as earned only during the non-overtime hours he worked; the employer’s method effectively treated the bonus as earned during all hours he worked. (more…)

Contractor v. Employee in the Gig Economy

A federal court in California, (Lawson v. Grubhub, Inc., No. 15-CV-05128-JSC (N.D. Cal February 8, 2018)), recently ruled that drivers for Grubhub, a food delivery service, are independent contractors rather than employees. The critical factor in the court’s decision was Grubhub’s lack of control over how its drivers perform deliveries, and even whether deliveries are to be performed at all. The decision is significant because, under California law, if an individual performing services is deemed to be an employee, that person has rights to minimum wage, overtime, expense reimbursements and workers compensation benefits. In contrast, an independent contractor is not entitled to those benefits. The decision is thus a welcome development for employers who rely on flexible and semi-autonomous workers in the “gig” economy. (more…)

EMPLOYMENT LAW UPDATE: 2018 Brings Major Changes for California Employers

Several important new California employment laws took effect on January 1, 2018. These new laws will impact California employers from the pre-hiring stage through the entire employment relationship.

Restriction on Obtaining Salary History

Effective January 1, 2018, Assembly Bill 168 went into effect, which prohibits all California employers from:

  • Directly or indirectly inquiring into a job applicant’s salary history, compensation or benefits
  • Using such salary history information in determining whether to extend a job offer or in deciding what salary to offer the applicant.


Employment Challenges in a Holocratic Work Environment

Many Silicon Valley start-up companies, as well as larger companies such as Zappos, have moved from a traditionally structured work environment to a “holocracy” model. Essentially, while there are lots of variations, a holocracy model is a “boss free” business environment that focuses less on a structured workplace with traditional job descriptions and job titles, and more on creating self-organized “circles” of workers that concentrate on specific goals. Each circle of workers is a self-organized entity with the authority to manage itself, and the circle is ultimately part of a larger circle within the company. In addition, there is a general principle of transparency in the organization’s rules and decision-making. For companies that are able to tolerate a high level of adaptability, have motivated workers, and are established and mature enough to bounce back if things do not work out as anticipated, this is a highly attractive work model. However, this organizational model raises a host of potential employment issues, a few of which are highlighted below: