On September 30, 2018, California Governor Jerry Brown signed a series of bills making significant changes to the state’s workplace sexual harassment laws. The purpose of the newly enacted laws is to expand legal protections to victims of workplace harassment and increase the liability of those who have engaged in such conduct. Together, these new bills make up one of the most sweeping collections of laws on the topic. A few of the most important new laws are discussed below. However, each of the newly enacted and amended laws as well as other important legal developments will be discussed during SHLC’s live, interactive webinar entitled: “2019 Legal Update for California Employers – What You Need to Do Now” which will be presented on December 4, 2018. To sign up for this webinar, or any of our upcoming events, visit http://suttonhague.com/events/ or call any of our offices.
No More Secret Settlements
Up until now, it has been common practice for settlement agreements between employers and employees in civil lawsuits alleging workplace sexual harassment, assault and misconduct cases to include confidentiality clauses that bar the plaintiff (victim/employee filing the lawsuit) from speaking about his or her claims or the terms of the settlement agreement. These settlement agreements routinely include severe penalties for breach of the confidentiality provisions that include, but are not limited to, the plaintiff having to return all of the money he or she received in exchange for signing the settlement agreement if the confidentiality provisions are breached. Starting January 1, 2019, secret settlement agreements in California cases concerning alleged workplace sexual harassment, sex discrimination, retaliation for reporting harassment or discrimination, or failure to prevent such conduct will be banned and any settlement agreement entered into after this date that prevents the disclosure of the information listed below will be considered void as a matter of public policy.
This new law applies to both public (government) and private employers as well as to both civil and administrative actions. In application, the new law would allow a settling plaintiff to disclose the factual foundation (i.e., the facts and circumstances that gave rise to the sexual harassment, discrimination and/or retaliation claim) and the identities of the alleged perpetrators underlying plaintiff’s claims.
This new law does allow a settlement agreement involving a private employer (non-government employer) to include a provision that shields the identity of the plaintiff or claimant (employee/alleged victim) and all facts that could lead to the discovery of his or her identity, including pleadings filed in court, when made at the request of the claimant as part of the settlement agreement. However, if a party to the settlement agreement is a government agency or public official, then such provisions are prohibited regardless of whether the claimant requests such provisions.
The new law continues to allow employers to include a provision in a settlement agreement that would prevent the disclosure of the amount paid to settle the claim. For employers this means that while the claimant is still free to disclose the information pertaining to his or her sexual harassment and sex discrimination allegations, the amount actually paid by the employer to the employee can still be kept confidential as part of the settlement agreement.
California employers should consider the potential ramifications of this new bill when deciding whether or not to settle sexual harassment, misconduct or assault cases. Employers will no longer be able to keep secret the factual information that forms the basis of such complaints or the identity of the alleged harasser. Some employers may be less willing to settle sexual misconduct cases if they are unable to ensure complete confidentiality. Employers should also keep in mind that under the recently enacted new federal tax law, there may be adverse tax consequences for including confidentiality provisions in a settlement agreement even if allowed under California law. Employers should always seek tax advice from a qualified tax professional before entering a settlement agreement in a sexual harassment-type case.
This new law should serve as a wake-up call to all California employers to make sure they have compliant anti-harassment, discrimination, and retaliation policies in their employee handbooks, and to verify compliance with those policies and procedures. We recommend that such policies are reviewed by competent legal counsel at least annually. It is also more critical than ever to train employees, and particularly managers, that in a settlement of a sexual harassment case against them, their name and the fact that a case settled in which they were an alleged harasser will not be confidential. This makes workplace sexual harassment claims more damaging even if the case is settled without a trial.
The full text of this new law can be found here.
Worker Protections under the California Fair Employment and Housing Act Are Expanded
The California Fair Employment and Housing Act (“FEHA”) provides employees, job applicants, and independent contractors with protections against unlawful employment practices such as harassment or discrimination due to an employee being a member of a protected category. As currently drafted, the FEHA provides no express protection for employees that sign agreements containing non-disparagement clauses, which would prohibit employees from bringing claims to the appropriate agencies because the claim could be construed as “disparaging” or negative to the employer. If a FEHA violation exists, the FEHA provides that the prevailing party will be entitled to attorney’s fees and costs.
Newly signed Senate Bill 1300 will create and amend laws which will provide additional protections for employees and additional liability to employers for FEHA violations that occur after January 1, 2019. This new law prohibits an employer from requiring employees to sign a release of FEHA claims and rights or from signing an agreement that contains a non-disparagement clause that prohibits an employee from disclosing any information regarding unlawful acts in the workplace as a condition of employment or in exchange for a raise or bonus.
This new law also amends the FEHA to further expand the potential liability of an employer to include all FEHA-prohibited harassment activity perpetrated on employees, not solely sexual harassment, committed by nonemployees to other employees, applicants, unpaid interns or volunteers, or persons providing services. For example, under the amended law, employers may now be liable for harassment of an employee by a nonemployee on the basis of the employee’s race, religion or medical condition.
The full text of this new law can be found here.
Mandatory Sexual Harassment Training Requirements Increased
Currently, the FEHA requires employers with 50 or more employees, including seasonal and temporary employees, to provide at least two (2) hours of sexual harassment training and education to all supervisory employees within six (6) months of their assumption of a supervisory position and once every two (2) years. However, this new law will now require employers with five (5) or more employees to provide at least two hours of training to all supervisory employees and at least one (1) hour of classroom or other effective interactive training and education regarding sexual harassment to all nonsupervisory employees by January 1, 2020 (meaning the training must happen in 2019).
These trainings must be completed within six months of assuming the position of employment. The training may be completed by employees individually or as part of a group presentation and may be completed in shorter segments, as long as the applicable hourly total requirement is met. After January 1, 2020, each employer covered by this section must provide sexual harassment training and education to each employee, regardless of their position, in California once every two years.
Employers with seasonal or temporary employees hired to work for less than six (6) months must be provided the training within 30 calendar days after the hire date or within 100 hours worked, whichever occurs first. The employee of a temporary services provider, as defined in Section 201.3 of the Labor Code, must be provided the training by the temporary services employer.
This law also requires the California Department of Fair Employment and Housing to develop and make available training courses that comply with these requirements. It is unknown at this time when these courses will be available or what they will cost.
SHLC provides sexual harassment training webinars periodically throughout each year. SHLC offers the training in both English and Spanish. For more information, visit www.suttonhague.com/events, or call any of our offices.