By: Eric J. Wu, Esq.
Recently, Leech Tishman Partner Philip A. Toomey wrote about significant legislative measures that were approved by Governor Brown in response to the #MeToo movement. In particular, Senate Bill No. 1300 (“SB 1300”) is a sweeping and far-reaching bill that potentially opens the door to a considerable increase in lawsuits against California employers. These changes take effect on January 1, 2019, which gives employers little time to understand and adapt to the comprehensive changes.
Resetting the Standard for Harassment Claims
SB 1300 declares that the purpose of California’s laws concerning harassment is to provide all Californians with an equal opportunity to succeed in the workplace. To that end, the bill takes an unusual step by approving and rejecting the following court decisions:
- Harris v. Forklift Systems (1993): In a workplace harassment suit, “the plaintiff need not prove that his or her tangible productivity has declined as a result of the harassment.” It is enough for an employee to show that the alleged harassment made it more difficult for the employee to do the job.
- Brooks v. City of San Mateo (2000): A single incident of harassing conduct is enough to create a triable issue as to the existence of a hostile work environment, if the harassing conduct unreasonably interfered with the plaintiff’s work performance or created a hostile working environment.
- Reid v. Google, Inc. (2010): A discriminatory remark, even if uttered by a non-decisionmaker, may be relevant evidence of discrimination. Existence of a hostile work environment depends on the totality of the circumstances.
- Kelley v. Conco Companies (2011): The type of workplace is irrelevant in determining whether a hostile work environment exists and may not be considered by courts, except where prurient conduct and commentary is essential to the job duties.
- Nazir v. United Airlines, Inc. (2009): Harassment and hostile work environment cases are “rarely appropriate for disposition on summary judgment.”
The codification of these legislative decisions creates several problems for California employers. Chief among them are that the standard of actionable harassment is effectively lowered, and the legislation has essentially directed courts to rarely approve summary judgment motions in harassment claims.
Amendments to FEHA
SB 1300 also amends the California Fair Employment and Housing Act (“FEHA”) in several ways:
Expanded Liability for Nonemployee Harassment
Previously, an employer in California could be held liable if it knew or should have known about sexual harassment committed by a nonemployee against an employee. Now, employers’ exposure to liability for acts committed by non-employees is expanded to include any form of harassment.
Restrictions on Releases and Non-Disparagement Agreements
SB 1300 prohibits employers from requiring an employee (in exchange for a raise or bonus, or as a condition of employment or continued employment) to sign a release of FEHA claims or non-disparagement agreement preventing an employee from disclosing information about unlawful acts in the workplace, including sexual harassment. This prohibition does not apply to settlement agreements but may have a significant impact on severance agreements. As it stands, it is unclear whether SB 1300 permits separation agreements to include standard releases and non-disparagement provisions.
Attorneys’ Fees to Prevailing Defendants
The bill also prohibits prevailing defendants in employment litigation from recovering attorneys’ fees and costs, unless they can prove the underlying action was “frivolous, unreasonable, or groundless when brought, or the plaintiff continued to litigate after it clearly became so.” This change severely limits the effectiveness of using Code of Civil Procedure Section 998 to encourage settlement and limit the costs of litigation in FEHA claims.
In the face of these far-reaching changes, California employers must remain vigilant in reviewing and revising their policies and procedures.
To learn more about the effects of SB 1300 and how to limit exposure to liability, please contact Eric J. Wu. Eric is an associate at Leech Tishman’s El Segundo, California office and practices in the firm’s Employment, Corporate, and Litigation Practice Groups. He can be reached at 424.738.4400 or firstname.lastname@example.org.
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