By Clarice C. Liu, Esq., Published on November 6, 2018

Employers in California will face many new requirements starting January 1, 2019, with the passage of the recent bills signed by Governor Jerry Brown. The new regulations range from expanded sexual harassment training requirements – that now apply to smaller employers with only 5 or more employees – to restrictions in the terms of employment contracts and settlement agreements. These new changes will be discussed below.

Senate Bill 1343 (SB 1343) – Sexual Harassment Training Requirements Expanded To Include Smaller Employers With 5 Or More Employees.

Introduced by Sen. Holly Mitchell, SB 1343 mandates that employers who employ 5 or more employees, including temporary or seasonal employees, must provide at least 2 hours of sexual harassment training to all supervisory employees and at least one hour of sexual harassment training to all nonsupervisory employees by January 1, 2020, and once every 2 years thereafter.

This new legislation significantly changes the coverage of employers for sexual harassment training. From 2005 until the present new legislation, only employers with 50 or more employees have been required to train and educate supervisory employees in California in the prevention of sexual harassment. Senate Bill 1343 lowers the number of employees to only 5 and includes required training of both supervisors and non-supervisors in the mandate.

Specifically, employers must provide sexual harassment prevention training to temporary or seasonal employees within 30 calendar days after the hire date or within 100 hours worked if the employee will work for less than 6 months. In the case of a temporary employee employed by a temporary services employer to perform services for clients, the training must be provided by the temporary services employer, not the client.

The sexual harassment training may be conducted with other employees, as a group, or individually, and broken up into shorter time segments, as long as the two-hour requirement for supervisory employees and one-hour requirement for non-supervisory employees is reached. As required under the current law, the sexual harassment training should be provided in the classroom or other “effective interactive training.”

Senate Bill 1300 (SB 1300) – Limitation Of Waiver And Nondisparagement; Expanded Liability For Harassment By Non-employees; Lowered Standard Of Proof For Sexual Harassment Claims.

Senate Bill 1300, by Sen. Hannah-Beth Jackson, contains many new amendments to the California Fair Employment and Housing Act (“FEHA”). This legislations has the following components:

1. Waiver and Nondisparagement. SB 1300 prevents companies from requiring their employees to sign releases of liability as a condition of continued employment or in exchange for a raise or a bonus. Specifically, it prohibits an employer, in exchange for a raise or bonus, or as a condition of employment or continued employment, from requiring an employee to sign an agreement that: (a) mandates an employee to sign a release stating the employee does not possess any claim or injury against the employer or other covered entity, and including the release of a right to file and pursue a civil action or complaint with, or otherwise notify, a state agency, law enforcement agency, court, or other governmental entity; or (b) contains a non-disparagement agreement or other document that purports to deny the employee the right to disclose information about unlawful acts in the workplace, including, but not limited to, sexual harassment.

   There is, however, an important exception to these requirements. These restrictions do not apply to a negotiated settlement agreement to resolve an underlying claim under the Fair Employment and Housing Act 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. That is, while an employer cannot require a release of claims or a non-disparagement agreement before or during employment, the employer may include those requirements when executing a negotiated settlement agreement.

2. Nonemployee Harassment. SB 1300 also amends Government Code Section 12940(j)(1) to extend employer liability for harassment committed by nonemployees to all forms of harassment prohibited by FEHA (not just the current coverage of sexual harassment), if the employer, or its agents or supervisors, knows or should have known of the conduct and fails to take immediate and appropriate corrective action.
3. Single Incident of Harassment. SB 1300 lowers the standard in construing the types of conduct are sufficiently “severe or pervasive” to constitute actionable harassment under FEHA. Notably, the bill adds Section 12923(b) to the Government Code, which clarifies that a “single incident of harassing conduct is sufficient to create a triable issue regarding the existence of a hostile work environment.”
4. Motion for Summary Judgment. SB 1300 makes it harder for employers to win summary judgment on harassment claims by expressly codifying that “[h]arassment cases are rarely appropriate for disposition on summary judgment.” This provision makes it all the more important that employers engage in a prompt and effective investigation and response.
5. Type of Workplace. The new legislation also makes clear that the legal standard for sexual harassment should not vary by the type of workplace. The Fair Employment and Housing Act would now mandate that it is irrelevant that a particular occupation may have been characterized by a greater frequency of sexually related commentary or conduct in the past. Instead, in determining whether or not a hostile environment existed, courts are required to consider whether the conduct is integral to the performance of the job duties.

Senate Bill 820 (SB 820) – Ban On Nondisclosure In Settlements Involving Sexual Offenses.

Introduced by Sen. Connie Leyva, Senate Bill 820 prohibits non-disclosure agreements in cases involving sexual offenses. While a claimant could choose to keep his or her name private, the alleged perpetrator’s identity cannot be required to be kept confidential.

SB 820 adds Section 1001 to the Code of Civil Procedure and prohibits a provision in a settlement agreement that prevents the disclosure of “factual information related to” certain claims of sexual assault, sexual harassment, or harassment or discrimination based on sex, filed in a civil action or with an administrative agency. Any such provision contained in a settlement agreement after January 1, 2019 is void as a matter of law and against public policy.

That is, under Senate Bill 820, settlement agreements that prevent an individual from disclosing factual information related to claims of sexual assault or harassment or discrimination, including retaliation for reporting sexual harassment or discrimination, will no longer be permitted. Effective January 1, 2019, SB 820 voids any provision in a settlement agreement that restricts disclosure of such facts.

Furthermore, SB 820 also prohibits the use of a non-disclosure agreement to restrict disclosure of facts underlying claims in an administrative or civil action for sexual harassment under California Civil Code Section 51.9, pertaining to employment-related harassment or discrimination based on sex, failure to prevent such discrimination or harassment, or an act of retaliation for reporting such harassment or discrimination.

Assembly Bill 3109 (AB 3109) – Settlement Agreement Cannot Limit The Right To Testify Regarding Criminal Conduct Or Sexual Harassment.

In addition to Senate Bill 820, another bill signed by Governor Brown similarly addresses settlement agreements that have the effect of silencing the claimants of sexual harassment or criminal conduct.

Assembly Bill 3109 adds Section 1670.11 to the California Civil Code to void any provision in a contract or settlement agreement entered into on or after January 1, 2019, that waives a party’s right to testify regarding criminal conduct or sexual harassment on the part of the other party to the contract or settlement agreement. AB 3109 applies to testimony in an administrative, legislative, or judicial proceeding, so long as the person’s testimony is required or requested by the court, administrative agency, or legislative body.

Senate Bill 826 (SB 826) – Female Members Of Boards Of Directors.

SB 826 adds Section 301.3 to the Corporations Code, which will require that “[n]o later than the close of the 2019 calendar year, a publicly held domestic or foreign corporation whose principal executive offices, according to the corporation’s SEC 10-K form, are located in California shall have a minimum of one female director on its board.” The number of required female directors increases by the close of calendar year 2021.

PRACTICAL CONSIDERATIONS.

As outlined above, the new regulations will have extensive impact on California businesses in their employment practices. Employers should consider the following actions prior to January 1, 2019 to comply with these new regulations:

• Prepare implementation of sexual harassment training in compliance with the new requirements under SB 1343. For employers that have 5 to 49 employees, these newly covered businesses are now required to provide sexual harassment trainings and should make plans accordingly. For employers with 50 or more employees, they should also include non-supervisory employees for trainings.
• Companies should ensure that the sexual harassment training provided is in the classroom or other effective interactive training. In that regard, live classroom training is generally preferable to webinar or video training to satisfy the requirement of employers providing effective interactive training.
• Prepare documents and trainings, if applicable, for nonemployees, such as vendors or independent contractors regarding their compliance with the company’s anti-harassment policies. Specifically, SB 1300 has codified a company’s liability for all forms of harassment committed by nonemployees. One important group of nonemployees that could be germane to the analysis would be customers. Companies should also consider revising employee handbooks regarding employees’ reporting of both sexual harassment by both employees and nonemployees.
• Review employment agreements to ensure that they do not contain a release of FEHA claims, a nondisparagement provision, or a confidentiality provision that would prevent employees from disclosing information about unlawful acts in the workplace, including sexual harassment.
• Review settlement agreements and severance agreements and to modify them, if necessary, so that they do not contain provisions that would prevent employees from disclosing factual information related to claims of sexual offenses, harassment, or discrimination. Similarly, these agreements should not contain language regarding prevention of employees from testifying about sexual harassment or criminal conduct.
• Provide prompt and effective investigation and remediation of harassment claims. As stated in SB 1300, “a single conduct is sufficient to create a triable issue regarding the existence of a hostile work environment.” Accordingly, a business should take prompt and effective actions to address a claim of harassment, so that the company would minimize the exposure relating to such claims.

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The information provided in this article is intended for a general discussion of the subject matter and should not be construed as legal advice. For your specific circumstance, or inquiry about the issues addressed in this article or other employment law matters, please contact attorney Clarice Liu at (415) 288-8622 or [email protected].