California Governor Brown Signs Final Round of Employment-Related Legislation, Including Sexual Harassment Legislation

California’s Governor Jerry Brown ended the legislative year by signing a flurry of employment-related legislation. These new California laws covered employee’s pay records, criminal history inquiries, lactation accommodations, and paid family leave, among other topics.  In addition, this year’s legislation includes significant sexual harassment-related and nonsexual harassment related employment legislation. This article provides an overview of these laws, all of which take effect on January 1, 2019, unless otherwise noted.

Female Director Quotas for Public Corporations

Senate Bill (SB) 826 adds Section 301.3 to the California Corporations Code. The law requires covered corporations, by the end of 2019, to include at least one female on their boards of directors. By the end of 2021, covered corporations with five or more directors on their boards must include at least two female directors. Finally, corporations with six or more directors on their boards must include at least three female directors.

Covered corporations may increase the number of directors on their boards to facilitate compliance. A corporation is in compliance if a female director holds the seat “for at least a portion of the year.” The law defines a “female” as “an individual who self-identifies her gender as a woman, without regard to the individual’s designated sex at birth.”

The penalties for noncompliance are significant. The law authorizes the California secretary of state to implement regulations that fine noncompliant corporations $100,000 for the first violation and $300,000 for any subsequent violation.

Right to Copies of Pay Records

SB 1252 amends California Labor Code Section 226, under which current and former employees have the right to inspect or copy records. Under the amendment, employees have a right to “receive a copy” of the records. The purpose behind SB 1252 is to clarify that employers must provide a copy upon request, rather than requiring the employee to make a copy. Employers may still charge the employee “the actual cost of reproduction.”

Criminal History Inquiries

SB 1412 amends California Labor Code Section 432.7, which limits the information an employer may ask a job applicant about his or her criminal history. The amended law limits the exceptions to the law currently in effect, which prohibits employers from asking job applicants to disclose information concerning certain arrests, convictions, and referrals to diversion programs. SB 1412 limits exceptions to circumstances where the employer is required to inquire into a particular category of criminal offenses or criminal conduct, or where the employer is prohibited from hiring an individual with a particular conviction. According to the amendment, in such instances, the employer may inquire about convictions that have been expunged, judicially ordered sealed, statutorily eradicated, or judicially dismissed following probation.

Expansion of Paid Family Leave

Currently, the California Employment Development Department (EDD) provides wage replacement benefits to workers who take time off work to care for a seriously ill family member or to bond with a minor child within one year of birth or placement. SB 1123 amends the California Family Temporary Disability Insurance Program, also known as the paid family leave program, by adding another leave category eligible for benefits.

As a result, beginning on January 1, 2021, the EDD also will pay benefits for time off “to participate in a qualifying exigency related to the covered active duty, or call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the Armed Forces of the United States.”

Lactation Accommodation

Assembly Bill (AB) 1976 amends California Labor Code Section 1031, which requires that employers provide lactating employees with breaks and rooms other than a toilet stall to express breast milk. The bill requires employers to provide rooms other than a bathroom to express milk.

Sexual Harassment Legislation

Sexual Harassment Training

Under current law, supervisors with 50 or more employees must provide at least two hours of sexual harassment training to supervisors every two years or within six months of an employee becoming a supervisor. SB 1343 amends the California Fair Employment and Housing Act (FEHA) by expanding both which employers must provide supervisor sexual harassment training—employers with five or more employees—and to whom they must provide it—both supervisory and nonsupervisory employees. 

The legislation instructs California’s Department of Fair Employment and Housing to prepare and make publicly available two- and one-hour harassment prevention training videos and written materials in various languages. 

Nondisclosure Provisions: Senate Bill 820

SB 820, effective January 1, 2019, adds a new section to the California Code of Civil Procedure that prohibits public and private employers from entering into settlement agreements that prevent the disclosure of information regarding:

• acts of sexual assault;
• acts of sexual harassment as defined in section 51.9 of the Civil Code;
• acts of workplace sexual harassment;
• acts of workplace sex discrimination;
• the failure to prevent acts of workplace sexual harassment or sex discrimination; and
• retaliation against a person for reporting sexual harassment or sex discrimination.

Parties may nevertheless continue to enter into agreements preventing the disclosure of claimants’ identities and amounts paid in settlement of claims.

Nondisclosure Provisions: Senate Bill 1300

Governor Brown also signed into law SB 1300, which amends FEHA to prohibit other nondisclosure agreements related to alleged claims of sexual harassment and overturn prior court rulings that limited harassment lawsuits. Among other things, SB 1300 prohibits an employer from requiring an employee to execute a release of a FEHA claim or sign a nondisparagement or nondisclosure agreement related to unlawful acts in the workplace (including sexual harassment) in exchange for a raise or bonus or as a condition of employment or continued employment. SB 1300 also provides that an employer may be liable when a nonemployee unlawfully harasses employees, applicants, unpaid interns, volunteers, or contractors, if the employer knew or should have known of the conduct and failed to take action.

Entertainment Industry

Assembly Bill No. 2338 requires talent agencies to make educational materials on sexual harassment prevention, retaliation, and reporting resources available to clients. The law also requires the state labor commissioner to provide sexual harassment training to minors (between the ages of 14 and 17) working in the entertainment industry and to their parents or legal guardians.

Industry-Specific Laws

The newly signed legislation also includes a number of industry-specific laws. These include:

• PAGA Carve-Out for Unionized Construction Workers. AB 1654 provides a limited exception to Private Attorneys General Act (PAGA) liability for certain construction-industry employers that have entered into collective bargaining agreements that include specified provisions.
• Safety-Sensitive Positions at Petroleum Facilities. AB 2605 exempts unionized employees in safety-sensitive positions at petroleum facilities from the rest and recovery period requirements in the California Labor Code. Employers can require these employees to carry and monitor a radio, pager, or other communication device; respond to emergencies; and remain on the employer’s premises during breaks. Employers must provide another rest period when a break is interrupted.
• Human Trafficking Training for Hotel Operators. SB 970 requires hotel and motel operators to provide 20 minutes of human trafficking awareness training to “employees who are likely to interact or come into contact with victims of human trafficking,” including employees in reception areas, housekeeping employees, drivers, and workers who help customers move their possessions.
• Joint Liability for Customers Using Port Drayage Motor Carriers. SB 1402 provides that customers that use a port drayage motor carrier shall be jointly liable with the motor carrier employer for the full amount of any unpaid wages, unreimbursed expenses, damages, and penalties owed to truck drivers.

Comments

The sexual harassment bills should have a dramatic effect on the ability of workers to bring claims for harassment and discrimination in the workplace. The new laws will likely make it significantly more difficult for employers to resolve such claims, either by way of settlement or by motion for summary judgment.

While the goal of the statutes relating to nondisclosure provisions is to prevent situations in which serial harassers are allowed to continue their unlawful behavior, their effects could be to impede parties from reaching arm’s-length resolutions of workplace disputes. They may also make it more difficult for employers to resolve unfounded or weak claims, as accused employees may refuse to cooperate in settlements without the opportunity to clear their names through litigation.

Written by Thomas M. McInerney, Christopher W. Olmsted, and Charles L. Thompson, IV of Ogletree Deakins