California Assembly Bill Would Give Employees More Time to File DLSE Complaints; Could Incentivize More Civil Litigation

Current California Labor Code Section 98.7 provides that any person who believes that he or she has been discharged from employment or otherwise discriminated against in violation of any law under the jurisdiction of the California Division of Labor Standards Enforcement (DLSE) may file a complaint with the DLSE within six months after the occurrence of the alleged violation. Through this Labor Code section, the DLSE has jurisdiction to resolve disputes arising from 48 statutes and regulations.

California law also contains a strong public policy that favors the protection of employees from retaliation for exercising their rights under the California Labor Code, and the DLSE has established procedures to investigate retaliation complaints and to enforce determinations of unlawful retaliation issued by the Labor Commissioner.

What Would Assembly Bill 1947 Require?

Assembly Bill (AB) 1947 seeks to expand DLSE enforcement under Section 98.7 by doubling the period of time individuals have to file complaints with the DLSE. The bill also includes a provision that would increase incentives to civil litigation.

First, AB 1947 would amend Labor Code Section 98.7 to provide that employees will have one year from the date on which they are “discharged or otherwise discriminated against in violation of any law under the jurisdiction of the Labor Commissioner” to file a complaint with the DLSE. The bill thus extends the time in which employees can bring such charges from six months to one year.

Second, AB 1947 would amend Labor Code Section 1102.5, which prohibits retaliation against employees who report employer violations or noncompliance with local, state, or federal statutes or regulations. Labor Code Section 1102.5 does not require an actual violation, as it protects employees who have “reasonable cause to believe” that their employer violated or failed to comply with the law.

Finally, AB 1947 would add a last line to Labor Code Section 1102.5 that states the following: “The court is authorized to award reasonable attorney’s fees to a plaintiff who brings a successful action for a violation of these provisions.” Thus, the bill provides an enhanced financial incentive for employees to file civil claims under Labor Section 1102.5 against employers instead of using the DLSE investigation process.

Opposition to the bill will likely highlight that there is a policy reason to favor DLSE enforcement over civil litigation, as the DLSE’s procedures provide a more efficient resolution process for alleged violations. Adding an attorney’s fees provision that would only benefit plaintiffs seems to undermine that policy by incentivizing litigation instead.

Recent DLSE Enforcement Trends

DLSE enforcement under Labor Code Section 98.7 has been rapidly expanding over the last 10 years. For example, according to the DLSE’s annual reports, the DLSE had jurisdiction to resolve disputes arising from 31 different statutes and regulations in 2011. Now, the DLSE has jurisdiction to resolve disputes arising from 48 statutes and regulations, a 55 percent increase in the scope of its enforcement power. Moreover, in 2011, the DLSE received a total of 2,742 complaints of alleged violations. In 2018 (which is when the DLSE issued its most recent report), the DLSE received 5,633 total complaints.

In 2018, the largest group of complaints filed (a total of 2,145) were based on allegations of retaliation for filing (or threatening to file) a claim relating to a right that is under the jurisdiction of the DLSE. The second largest group of complaints filed (a total of 2,095) were based on allegations of retaliation for disclosing violations of noncompliance with local, state, or federal law under Labor Code Section 1102.5. And, the third largest group of complaints filed (a total of 561) were based on allegations that employees were retaliated against for initiating proceedings relating to workplace safety or health conditions.

Thus, even though the DLSE has doubled its enforcement activities in the last 10 years alone, AB 1947 would increase that trend even more rapidly by doubling the limitations period to bring such claims, and adding new financial incentives for plaintiffs to file retaliation lawsuits under Labor Code Section 1102.5.

What Is the Status of AB 1947?

AB 1947 is in committee, and the California Assembly will resume the hearing and amendment process this month. More than a dozen Assembly members are sponsoring the bill, so there is strong support for its passage moving forward. That said, with California’s employers already suffering significant losses in this pandemic period, there will likely be energized opposition to a bill that would expand DLSE enforcement and potentially increase civil litigation against employers.

Ogletree Deakins will continue to monitor and report on developments with respect to the legislation and will post updates as developments warrant.