Transparency and Representation: California’s New Workplace Laws

While the headlining effect of #MeToo surely played a major part in some of the sweeping changes to harassment laws in California, the scope of the new harassment laws goes beyond gender issues. California’s new laws are designed to increase transparency and curtail abuse of power through the grant of new rights and remedies to employees, as well as divesting options for businesses to sweep issues under the rug or silence those who believe their rights were violated.

From a holistic perspective, the new laws passed that will impact workplaces throughout California begin at the apex of a corporation. SB826 was the headliner of the new laws, as it surely got the most attention in media outlets. SB826 requires any publicly traded company with its principal executive office in California to have at least one female director by the end of 2019. This applies to all boards of all sizes, even if a company must expand its board to make room.

While SB826 is targeted, SB1300 attempts to install wide-ranging reforms to protect employees that may or have already made harassment claims. U.S. Supreme Court Justice Ruth Bader Ginsburg’s concurrence in Harris v. Forklift Systems, 510 U.S. 17 (1993), provides the new standard for those that choose legal action - that a sexual harassment plaintiff “need not prove that his or her tangible productivity has declined as a result of the harassment. It suffices to prove that a reasonable person subjected to the discriminatory conduct would find, as the plaintiff did, that the harassment so altered working conditions as to make it more difficult to do the job.” SB 1300 adds that a “single incident of harassment is sufficient to create a triable issue of a hostile work environment if the harassing conduct has unreasonably interfered with the plaintiff’s work performance or created an intimidating, hostile, or offensive working environment.” SB1300 amplifies the extent of employer responsibility - an employer may be responsible for the acts of non-employees, including interns, contractors, and volunteers.  Taken together, these requirements provide an easier path for a sexual harassment claim to proceed, and aim to protect and include all members of a business.

Finally, SB1300 proscribes a business requiring an employee to sign a non-disparagement agreement that would prohibit an employee from disclosing information about not just harassment, but any unlawful acts in the workplace. While it is true that SB1300 does not apply to negotiated settlements of filed cases, administrative proceedings, or arbitration, SB820 does apply to settlement agreements regarding cases of sexual harassment. SB820 prohibits clauses in settlement agreements for sexual harassment suits that would prevent disclosure of facts related to the case – the only exceptions provided are that the amount paid may be disclosed and the claimant of sexual abuse retains the choice to keep their name private. SB820 applies to both public and private employers in California.

The prevailing takeaway regarding these new laws is that the legislature intended for the workplace to be held to a higher standard of accountability, and stress preventative and proactive measures regarding harassment in the workplace. It remains to be seen if California’s new laws will inspire other states to implement similar requirements.

Phillip Stephan is a experienced litigator, and also has transactional experience with entrepreneurs and established companies. He is an Associate Attorney at Neil, Dymott, Frank, McCabe & Hudson, APLC.

**This article is for information purposes only and does not contain or convey legal advice. The information herein should not be relied upon in regard to any particular facts or circumstances without first consulting an attorney. Any views expressed are those of the author only and not of the SDCBA or its Business & Corporate Law Section.**