Two Employment-Related Bills Headed to Governor’s Desk; CalChamber Urges Vetoes

Two California Chamber of Commerce-opposed employment-related bills that deal with harassment and discrimination claims, and create other legal predicaments for California companies have passed the Legislature and are headed to the Governor’s desk.

CalChamber is urging the Governor to veto:

  • AB 3081 (Gonzalez Fletcher; D-San Diego) creates another pathway for costly litigation against employers for issues that already are protected under the Fair Employment and Housing Act (FEHA).
  • SB 1300 (Jackson; D-Santa Barbara) limits the use of nondisparagement agreements and general releases, restricts the ability to summarily adjudicate harassment claims and lowers the legal standard for actionable harassment claims. These provisions will significantly increase litigation against California employers and limit their ability to invest in their workforce.

AB 3081: Increases Employer Liability

Although AB 3081 was recently amended to limit its overall scope, the bill now expands joint liability for labor contractors to all employment-related harassment claims (not just sexual harassment complaints as limited in the prior version). There is no basis for a business that contracts for services being deemed statutorily liable for harassment of another’s employees when there is absolutely no way in which that contractor can engage or force the labor contract company to comply with provisions of the FEHA or the Labor Code.

CalChamber is also concerned because this statutory mandate ignores and disrupts current law that already provides liability for harassment claims in relation to third parties.

Finally, compliance with FEHA’s training and notice requirements is not a complete defense for harassment liability. Even if a client employer ensured that the labor contractor was training all its employees, had all the appropriate anti-harassment policies in place, and provided the proper notices regarding harassment prevention, the client employer would still be liable for the harassing conduct of the labor contractor’s employees.

Accordingly, current law already provides an adequate pathway for civil liability for a business that is actually controlling the employees of another and there is no basis for that analysis to be completely disregarded under this bill.

SB 1300; Significant Expansion of Harassment Discrimination and Retaliation Liability

SB 1300 is a former job killer that was amended on August 20 to remove the provisions that created a new, stand-alone private right of action for failure to prevent harassment or discrimination.

CalChamber remains opposed to SB 1300 because it limits the use of nondisparagement agreements and general releases, restricts the ability to summarily adjudicate harassment claims and lowers the legal standard for actionable harassment claims. These provisions will significantly increase litigation against California employers and limit their ability to invest in their workforce.

  • Lowers Legal Standard for Actionable Harassment Claims. Although intent language is rarely opposed in a bill, the intent language of SB 1300 is very concerning. Through this language, the bill significantly lowers the standard for what constitutes severe or pervasive behavior with regard to actionable harassment claims.

SB 1300 lowers this legal standard to behavior that simply “makes it more difficult to do the job.”  Almost any behavior could potentially make it more difficult for someone to do their job. This radical lowering of the standard would result in a vast increase in litigation over possibly trivial workplace matters that simply do not rise to the level that should involve the state’s overburdened court system.

  • Limits Ability to Summarily Adjudicate Harassment Claims. SB 1300 states that “Harassment cases are rarely appropriate for disposition on summary judgment,” and cites an appellate court decision for this statement. However, deciding whether a case should be summarily adjudicated should be left for a judge who knows the specific facts of the case. Summary judgment is already a very high threshold and trying to sway the courts from utilizing summary judgment where appropriate will only clog the courts with cases that have no legal merit.
  • Deters Employers from Conducting Self-Audits and Providing Severance Agreements. SB 1300 prohibits the use of a general release in exchange for a raise or bonus or as a condition of employment or continued employment. This is a concern because without the ability to use general releases, employers will not provide severance agreements.

SB 1300 also provides a disincentive to employers to take remedial action, such as wage and hour self-audits. Self-audits are extremely burdensome, time consuming and expensive. This is not a task that employers take lightly and, if an employer is not permitted to utilize a general release of claims in exchange for a “bonus” or “raise,” it may discourage employers from conducting self-audits.

Action Needed

CalChamber is encouraging businesses to contact Governor Edmund G. Brown Jr and urge him to veto AB 3081, and SB 1300. The Governor has until September 30 to sign or veto legislation that has reached his desk.

Staff Contacts: Laura Curtis

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