October 2018

California Governor Jerry Brown Signs #MeToo Bill Package Affecting Employers

By Desi Kalcheva

Paul, Plevin, Sullivan & Connaughton LLP
and
By Mary Allain

Law Clerk at Paul, Plevin, Sullivan & Connaughton LLP

 

 

Summary
On September 30, 2018, Governor Brown acted on the last of over 1,200 bills that the Legislature passed this year, including a slate of #MeToo inspired laws. The bill package favors employees in harassment litigation and settlements, expands anti-harassment training requirements, and protects employers from defamation. This update covers the most significant aspects of the new laws.  
Discussion
Although the Governor’s reaction to the #MeToo legislation was mixed, the laws taking effect on January 1, 2019 will significantly affect California employers.   
Senate Bill 1300 is most impactful. It establishes that a single incident of harassment may satisfy the requirement that harassment be “severe or pervasive.” The law also directs trial courts that sexual harassment cases should generally be resolved by a jury trial. Further, the law makes it harder for an employer that prevails in a discrimination or harassment suit to recover its attorneys’ fees. Finally, the law limits an employer’s use of confidentiality and non-disparagement agreements in harassment and discrimination settlements.  
Governor Brown also signed Assembly Bill 2770, which aims to protect employees and employers from certain defamation claims. A.B. 2770 deems three specific communications privileged: (1) an employee’s credible report of sexual harassment to an employer; (2) communications between an employer and “interested persons” (like witnesses or victims) about sexual harassment claims; and (3) an employer’s statements to prospective employers that a decision to not rehire an individual is based on the employer’s finding that the individual engaged in sexual harassment. All communications must be made without malice to be privileged.

The Governor also signed Senate Bill 820, which prohibits any provision in a settlement agreement that would prevent the disclosure of facts related to sexual assault, harassment, or discrimination. The law excepts only provisions that shield the claimant’s identity or the settlement amount. 

Another new bill is Senate Bill 1343, which expands employer training obligations. Currently, employers with 50 or more employees must provide anti-harassment training to supervisory employees within six months of hire and every two years. The new law extends the training requirement to employers with five or more employees. The law also requires that non-supervisory employees receive one hour of training, starting in January 2020.  

What This Means
These laws are certain to alter harassment litigation in California. The new ban on non-disclosure provisions in harassment cases will make early settlement more precarious as it will no longer ensure a publicity-free resolution. The new laws will also impede the dismissal of sex harassment claims. Finally, employers must now expand their harassment prevention efforts by training both supervisory and nonsupervisory employees every two years. 

Employers have until January 1, 2020 to provide the first mandated training, which must be repeated every two years thereafter. Some of the bills vetoed by Governor Brown this year, such as the bill prohibiting mandatory arbitration of harassment claims, are likely to be presented again in 2019 before a new Governor and Legislature.