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Developments in Sexual Harassment and Discrimination Protections
Prohibition on Confidential Sexual Harassment Settlement Agreements (Cal. Civ. Pro. § 1001; Senate Bill 820)
- Effective January 1, 2019
- Settlement agreements may not prevent an individual from disclosing factual information related to claims of sexual assault, harassment, or discrimination, including retaliation for reporting sexual harassment or discrimination. Any such provision is void.
Limits on Obtaining Release Agreements and Non-Disparagement Agreements from Employees (Cal. Gov. Code §§ 12923; 12940; 12950.2, 12964.5, 12965; Senate Bill 1300)
- Effective January 1, 2019
- With certain exceptions, these provisions prohibit an employer from conditioning continued employment on the release of claims under the California Fair Employment & Housing Act. These provisions also prohibit an employer from requesting an employee to sign a non-disparagement agreement or other document that purports to deny the employee the right to disclose information about unlawful acts in the workplace. An employer is similarly prohibited from offering a raise or bonus to individuals in exchange for the same.
Sexual Harassment Prevention Training (Cal. Gov. Code §§ 12950 & 12950.1; Senate Bill 1343)
- Mandatory compliance by January 1, 2020
- Employers with at least five (5) employees, including seasonal and temporary employees, must provide interactive sexual harassment prevention training to all employees in California. Non-supervisory employees must receive one hour of training while supervisory staff must receive at least two hours of training.
Prohibition on Agreements That Waive Right to Testify in Any Proceeding Concerning Alleged Criminal Conduct (Cal. Civ. Code § 1670.11; Assembly Bill 3109)
- Effective January 1, 2019
- Any provision in a contract or settlement agreement that attempts to waive a party’s right to testify in an administrative, legislative, or judicial proceeding concerning alleged criminal conduct or sexual harassment is void.
Amending Sexual Harassment Elements to Include Professional Relationships (Cal. Civ. Code § 51.9 & Gov. Code §§ 12930 & 12948; Senate Bill 224)
- Effective January 1, 2019
- Statute amended to provide that the elements in a cause of action for sexual harassment include when the plaintiff proves, among other things, that the defendant holds himself or herself out as being able to help the plaintiff establish a business, service, or professional relationship with the defendant or a third party. The statute eliminates the element that the plaintiff prove there is an inability by the plaintiff to easily terminate the relationship; and provides that an investor, elected official, lobbyist, director, and producer may be liable to a plaintiff for sexual harassment.
Employers’ Obligation to Provide Salary Information (Cal. Lab. Code §§ 432.3 & 1197.5; Assembly Bill 2282)
- Effective January 1, 2019
- Clarifies that employers need not provide pay scales except to applicants, upon their request, who have completed at least one interview; provides guidance on permissible employer questions; and fortifies the distinction between job applicants and current employees. Significantly, the law expressly clarifies that an employer may ask an applicant what his or her salary expectation is for the position sought.
Public Companies Must Have Female Board Members (Cal. Corp. Code §§ 310.3 & 2115.5; Senate Bill 826)
- Mandatory compliance by December 31, 2019
- All publically held corporations whose principal executive offices are located in California shall have a minimum of one female director on its Board.
No Income Tax Deductions for Sexual Harassment Settlements Subject to Confidentiality Clause (U.S. Code § 162(q))
- Currently in effect
- The 2017 Tax Cuts & Jobs Act prohibits deducting any settlement or payment related to sexual harassment or sexual abuse from income if the settlement or payment is subject to a non-disclosure agreement. Additionally, no deduction is permissible for attorneys’ fees related to a confidential sexual harassment settlement or payment.
Disability and Leave Management Developments
Provision of Lactation Accommodations (Cal. Lab. Code § 1031; Assembly Bill 1976)
- Effective January 1, 2019
- Employers must make efforts to provide an employee with a place to express breast milk in private. The area must be near the employee’s work area and cannot be a bathroom. A room or location where the employee works may be sufficient if the space meets the law’s requirements.
Paid Family Leave Amendment (Unemp. Ins. Code §§ 3301–3303.1, 3307; Senate Bill 1123)
- Effective January 1, 2021
- Expands Paid Family Leave Benefits to individuals who miss work due to a spouse, domestic partner, parent, or child being on active duty in the armed forces.
Other Anti-Harassment and Anti-Discrimination Measures
Limitation on “English Only” Rules (2 Cal. Code Regs. §§ 11027 & 11028)
- Currently in effect
- Regulations prohibit English-only policies, except in certain circumstances, and prohibit any inquiries into an applicant or employee’s immigration status unless an employer can demonstrate by “clear and convincing evidence” that such inquiry is required by federal law.
Discrimination Prohibited Against Service Members (Mil. &Vet. Code § 394; Senate Bill 1500)
- Effective January 1, 2019
- Protects members of the federal reserve of the Armed Forces and State Military Reserve from, among other things, discriminatory discharge from employment; and prohibits denying entry to uniformed members of the Armed Forces on the basis of their uniform.
Unfair Competition Developments
California Non-Compete Law Renders Settlement Agreement Term Unenforceable
- On July 24, 2018, the Ninth Circuit established that under California law, even if a non-compete term is contained within a settlement agreement, a restraint on future employment deemed substantial (basically anything other than re-employment with the same employer) is impermissible. See Golden v. California Emergency Physicians Med. Grp., No. 16-17354 (9th Cir. July 24, 2018).
Wage and Hour Developments
De Minimis Doctrine Does Not Apply to Certain Wage Claims
- In Troester v. Starbucks, 5 Cal. 5th 829 (2018), the California Supreme Court denied application of the federal de minimis doctrine to recurring off-the-clock work which generally takes four to ten minutes after the employee clocks out at the end of his or her shift. As a result, all such time was deemed compensable.
California Supreme Court Broadens Definition of Employee in Independent Contractor Analysis
- Diverging from decades-old authority, the California Supreme Court broadened the definition of “employee” in the context of the State’s Industrial Welfare Commission (IWC) Wage Orders when undertaking the employee-versus-independent contractor analysis. See Dynamex Operations West, Inc. v. Superior Court, 4 Cal. 5th 903 (2018).
Calculating Overtime Value of Flat-Sum Bonus Must Be Based on Actual Non-Overtime Hours Worked
- In Alvarado v. Dart Container Corporation of California, 4 Cal 5th 512 (2018), the California Supreme Court held that under state law, when an employee earns a flat sum bonus, the overtime pay rate must be calculated using the actual number of non-overtime hours worked by the employee.
2019 Minimum Wage Increases (Cal. Lab. Code § 1182.13)
- Effective January 1, 2019
- For employers with up to 25 employees, the statewide minimum wage will increase to $11.00 per hour; employers with more than 25 employees must pay at least $12.00 per hour.
- Note that applicable local minimum wage ordinances may exceed the minimum wage statewide. Employers must comply with whichever rate is higher.
Construction Industry PAGA Exemption (Cal. Lab. Code § 2699.6; Assembly Bill 1654)
- Effective January 1, 2019
- Employees in the construction industry performing work under a valid collective bargaining agreement that provides for, among other things, final and binding arbitration, are not entitled to bring claims under California Labor Code Private Attorneys General Act (“PAGA”).
Notable Veto
Mandatory Arbitration Provisions Remain Lawful (Assembly Bill 3080)
Produced by ADP in Partnership with Jackson Lewis P.C.