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California Dreamin’: What’s New in Employment Law on Such a Winter’s Day

California employers saw many legal developments in state courts and the legislature this year. From the adoption of the “ABC test” in assessing independent contractor status to its rejection of the “total hours worked” method when calculating overtime pay in the context of certain bonus payments, California’s Supreme Court has shaken up the state’s wage and hour laws. Not to be outdone, the state legislature has also been busy. Below are a few key employment-related laws passed this year and set to take effect on January 1, 2019 and later. If you have not already been working to address these changes, there is no time like the present.

  • In the wake of #MeToo, the legislature made notable changes to FEHA.
    New legislation expands possible employer liability — while limiting employer remedies — under FEHA. For example, the statute endorses a lower burden of proof in harassment cases through its legislative findings and states that an employer may be responsible for the acts of nonemployees with respect to any type of harassment prohibited under FEHA, depending on their degree of control over those nonemployees. The statute also prohibits securing from an employee either a release of FEHA claims or a non-disparagement agreement covering unlawful acts in the workplace in exchange for a raise or bonus, or as a condition of employment or continued employment. And it makes employer recovery of attorneys’ fees more difficult.
  • Enforceability of non-disclosure provisions regarding sex harassment and related conduct will be limited.
    Working in tandem with some of the changes to FEHA, new laws will limit an employer’s ability to prevent the disclosure of sexual harassment. The new laws void (1) contractual provisions (including settlement agreements) entered into after January 1, 2019 that purport to waive a party’s ability to testify in an administrative, legislative, or judicial proceeding concerning alleged criminal conduct or sexual harassment by the other party to the contract, when the party has been requested or required to do so by legal process, and (2) any provision in a settlement agreement resolving a civil or administrative claim that prevents a party from disclosing “factual information” about sexual assault, sexual harassment, sex discrimination in the workplace, or related retaliatory conduct.
  • More sexual harassment training is coming.
    Under the new law, employers with five or more employees are required to conduct two hours of sexual harassment training for supervisors starting in 2020, lowering the employee threshold from 50.
  • Information concerning sexual harassment regarding an employee may follow that employee to prospective employers.
    Employers are currently protected from liability for defamation when responding to inquiries about a current or former employee’s job performance or qualifications by a prospective employer so long as those responses are made without malice and on credible evidence. In an attempt to encourage employers to be more open with one another regarding sexual harassment issues, the new law expands this protection by expressly extending it to responses that the employer would not rehire a former employee due to a determination that the former employee engaged in sexual harassment.
  • The number of female directors on boards of directors will receive greater review.
    Publicly held corporations (whether domestic or foreign) that have principal executive offices in California will be required to have at least one female director on their boards of directors by December 31, 2019. By December 31, 2021, covered corporations with five directors must have at least two female directors, and those with six or more directors must have at least three female directors. There is no shortage of opposition to this law and we will likely see constitutional challenges develop in 2019.
  • Cal/OSHA recordkeeping violations to become continuing violations.
    Starting January 1, 2019, an “occurrence” for purposes of issuing a citation or notice for violation of recordkeeping requirements will continue until (a) it is corrected, (b) the agency discovers the violation, or (c) the duty to comply with the requirement no longer applies. This will give Cal/OSHA greater latitude in issuing citations, which it is required to do within the six months after an occurrence.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.