New Sexual Harassment Laws Calif. Employers Should Know

By Lindsay Ayers

During a recent legislative session on Sept. 30, 2018, in response to the #MeToo movement, California Gov. Jerry Brown signed into law a number of bills taking effect Jan. 1, 2019, that will lower plaintiffs’ burden in sexual harassment lawsuits, increase training requirements for employers, and make it more difficult to enter into releases and nondisclosure agreements with employees.

The following is a brief summary of these new laws, how they will affect employers moving forward, and best practices to ensure compliance.

Expansion of the Definition of Sexual Harassment (SB 224)

This new law amends California Civil Code § 51.9 and broadens the types of professional relationships from which a claim for sexual harassment may arise. These professional relationships now include those with individuals who present themselves as being able to assist a plaintiff in establishing a business, service or professional relationship. Notably, a claim may arise before the end relationship is even established. The law specifically identifies lobbyists, elected officials, directors, producers and investors as potential defendants in such suits. Employers should be aware of this expanded definition as SB 224 provides the Department of Fair Employment and Housing with grounds to investigate such sexual harassment claims in the workplace.

Increased Statute of Limitations for Claims of Sexual Assault (AB 1619)

AB 1619 expands the statute of limitations for bringing sexual assault claims. Now, a civil action for recovery of damages due to sexual assault or attempted sexual assault may be filed within 10 years of the alleged assault or within three years after the plaintiff discovers injury or illness as a result of the assault or attempted assault — whichever is later. Accordingly, because employers may be named and face potential liability in such an action (should, for example, one of their employees perpetrate an assault), there is now a much larger window of time during which these claims may be brought.

Amendments to the Fair Employment and Housing Act (SB 1300)

Starting on Jan. 1, 2019, SB 1300 will amend the Government Code (Fair Employment and Housing Act, or FEHA) making it easier for employees to prevail in sexual harassment actions. The law lowers the employee’s burden and standard of proof when litigating a sexual harassment case. This new bill (1) will prohibit employers, in exchange for a bonus, a raise, employment or continued employment, from requiring releases from employees of FEHA claims; (2) essentially eliminates employers ability to use Code of Civil Procedure Section 998 offers (which encourages settlement by offering a party the opportunity to collect fees and costs, should the other party reject an offer and fail to obtain a more favorable judgment), by adding language that would require an employer to also show that (a) the action was frivolous, unreasonable and/or without merit, or (b) the plaintiff continued to litigate the matter after becoming aware that the case had no merit, before it is able to collect post-offer fees and costs on a successful 998 offer; (3) will make employers liable for any kind of unlawful harassment by nonemployees (which expands the existing law, limited only to sexual harassment) where the employer knew or should have known of the harassment, and failed to take appropriate remedial action; and (4) adds legislative intent making it more difficult for employers to prevail in harassment actions (e.g., the bill declares that harassment cases are rarely appropriate for disposition on summary judgment, that a “stray remark” made by a non-decision-maker be enough to establish discrimination, and that a single incident of harassing conduct be enough to establish a hostile work environment).

These various changes to the law will mean various changes to the way employers litigate and approach settlement in sexual harassment matters. With the burden of proof now even lower for plaintiffs, it is even more critical that employers assure that they have regular sexual harassment training of their employees (requirements which have now increased as addressed below), and up-to-date compliant policies and procedures that are circulated to employees. Taking these steps will not only work to prevent, limit or more immediately halt any harassment, but it will also become an employer’s key line of defense should a sexual harassment claim be filed.

Settlement of Sexual Harassment Claims (SB 820)

This bill significantly increases the number of cases prohibiting nondisclosure settlement provisions. For over a decade, nondisclosure agreements have been disallowed in sexual assault cases, and disfavored in elder abuse matters. In accordance with SB 820, post-Jan. 1, 2019 settlement agreements are prohibited from containing provisions preventing employees from disclosing factual information related to sexual assault, sexual harassment, gender discrimination, and related retaliation and ‘failure to prevent’ claims filed in a court of law or with an administrative agency. Notably, the new law does not prevent the parties from agreeing to a settlement term that precludes disclosure of the amount of the settlement. Moreover, should the claimant seek to limit the disclosure of (a) his/her identity or (b) facts that would lead to the discovery of the claimant’s identity, this law will not prevent the enforcement of such settlement agreement provisions — with exceptions that apply where a governmental agency or public official is a party to the agreement.

Accordingly, employers should be aware that inclusion of nondisclosure clauses into these types of settlement agreements may be found void and in violation of public policy. Important to note, however, is the apparent exception based on a strict reading of the language of this new law. Should the employer settle the dispute with the employee in advance of any civil lawsuit or administrative action actually being filed (i.e., in situations where only a demand letter is served), the law does not appear to prohibit nondisclosure language in its settlement agreements to resolve these prelitigation claims.

Settlement Agreements Addressing Disclosure of Sexual Harassment (AB 3109)

Beginning on Jan. 1, 2019, any clause in a contract or settlement agreement that prevents a party to the contract from testifying about alleged criminal conduct or sexual harassment in an administrative, legislative or judicial proceeding will be void and unenforceable. This bill comes on the heels of Olympian McKayla Maroney’s settlement agreement reportedly subjecting her to a fine of $100,000 for having testified in the criminal trial against her former team doctor for sexual abuse.

Accordingly, employers should be cognizant not to include language in any settlement agreement or other contract that would prohibit or limit employees’ or former employees’ ability to testify about alleged criminal or sexual harassing conduct if requested by a judicial, administrative or legislative body, as it will be found void.

Sexual Harassment Training (SB 1343)

Previously, only employers with 50 or more employees were required to provide supervisors with sexual harassment training. Now, SB 1343, requires employers with only five or more employees to provide this training. Further, by Jan. 1, 2020, this new law requires that these employers provide at least two hours of training to supervisory employees and at least one hour of training to nonsupervisory employees. This training must then continue once every two years. The Department of Fair Employment and Housing is also required to create training materials for employers to use for these purposes.

To assure compliance by this deadline, employers should start taking steps now to (a) schedule and provide this training to its employees, and (b) put into place a regular schedule of training moving forward. In light of all of the above new laws, this sexual harassment training is more important than ever. If both supervisory and nonsupervisory employees understand their roles in reporting any instances of harassment, it will go a long way to limiting legal action related to such claims.

Conclusion

In sum, these new laws make it much more difficult for businesses to defend and even settle sexual harassment suits alleged against them. Not only will the statutory window be much larger, but beginning in January, plaintiffs/claimants will have a much lower burden in satisfying sexual harassment claims, and certain nondisclosure clauses found in settlement agreements related to such claims will be prohibited unless entered into prelitigation.

Accordingly, it is even more pertinent now than ever before that businesses:

1. Train their employees to alert the company to instances of harassment so that they can be dealt with promptly.
2. Review and, if need be, revise their policies and procedures to address the prevention, identification, reporting and handling of harassment in the workplace.
3. Provide clear guidance to management on how to properly conduct a sexual harassment investigation.
4. Review the company’s release, nondisclosure, nondisparagement, and settlement agreements to assure they do not contain language violative of the various new restrictions on such agreements.

Lindsay A. Ayers is a partner at Carothers DiSante & Freudenberger LLP. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

As first seen in Law360 - https://www.law360.com/employment/articles/1093919/new-sexual-harassment-laws-calif-employers-should-know