Just prior to the October 13, 2019 deadline to sign/veto bills from this year’s Legislative Session, Governor Gavin Newson signed several labor and employment law bills into law that will bring about significant changes for California public employers beginning next year. Below are summaries on three of these new bills that will go into effect on January 1, 2020.
Assembly Bill (“AB”) 9 – Increase of FEHA Statute of Limitations from One to Three Years.
The California Fair Employment and Housing Act (“FEHA”) prohibits discrimination, harassment, and retaliation in employment based on protected classifications such as race, national origin, sex, sexual orientation, religion, age over 40, disability, and medical condition, among other protected categories. Currently, a covered individual (applicant, employee, or former employee) who alleges a violation under the FEHA has one year from the date of such unlawful practice to file a verified complaint with the Department of Fair Employment and Housing (“DFEH”) or the claim would generally be time-barred.
AB 9 will now increase the statute of limitations for bringing such an administrative charge so a covered individual will now have up to three years from the date of such unlawful practice to file a verified complaint with the DFEH. This new statute of limitations will go into effect on January 1, 2020. While AB 9 does clarify that its application will not revive any lapsed claims under the older one year statute of limitations, this also seems to imply that any potential claims that did not lapse by December 31, 2019 would now get the benefit of the new three year statute of limitations from the date of such unlawful practice.
This bill will require public employers to be prepared to defend against FEHA claims involving actions that took place up to three years ago and may involve former employees who an employer has not interacted with for some time. This is also compounded by the fact that this increase in the statute of limitations only applies to the filing of a discrimination, harassment, or retaliation claim with the DFEH, who has initial administrative jurisdiction over the complaint and generally has up to one year from the date the complaint was filed to make an administrative determination. If the DFEH does not take any action and issues a right to sue notice, the covered individual then has up to one year to file a lawsuit in Superior Court. In the worst-case scenario, it could be up to five years from the date of the alleged FEHA unlawful practice before a lawsuit is filed in Superior Court for an employer to defend against. Once the lawsuit is filed in court, litigating the case to jury trial and any subsequent appeals could take several more years.
This will also cause a greater disparity between the ability to file discrimination, harassment, and retaliation claims under California’s FEHA and its federal law counterparts under Title VII, where such complaints must be filed within 300 days of the alleged unlawful practice with the federal Equal Employment Opportunity Commission (“EEOC”). While the EEOC and DFEH generally cross-file with the other agency any timely discrimination, harassment, and retaliation complaints that apply under both state and federal law, the DFEH will now only be able to process any such complaints under state law that are filed over 300 days and up to three years from the date of the alleged unlawful practice.
In short, employers now will have to defend against older claims of discrimination, harassment, and retaliation from applicants, employees, and former employees under AB 9. However, this is a good reminder for employers to prepare good written records in a contemporaneous manner of any claims of discrimination, harassment, and retaliation, and to properly maintain such records so they can be referenced and relied upon to defend against any FEHA claims.
Assembly Bill (“AB”) 51 – Employment Discrimination Enforcement.
AB 51 adds a new Section 432.6 to the Labor Code, which provides the following under subsection (a):
“A person shall not, as a condition of employment, continued employment, or the receipt of any employment-related benefit, require any applicant for employment or any employee to waive any right, forum, or procedure for a violation of any provision of the California Fair Employment and Housing Act (Part 2.8 (commencing with Section 12900) of Division 3 of Title 2 of the Government Code) or this code, including the right to file and pursue a civil action or a complaint with, or otherwise notify, any state agency, other public prosecutor, law enforcement agency, or any court or other governmental entity of any alleged violation.”
The general impact of the bill’s language will be to prohibit employers from requiring any applicant or employee to submit claims under the California Labor Code or the Fair Employment Housing Act (“FEHA”) to a mandatory arbitration agreement as a condition of employment. The bill also clarifies that any employment arbitration agreement which requires an employee to affirmatively opt-out of the agreement in order to preserve their rights would be deemed a “condition of employment”.
AB 51 also prohibits an employer from threatening, retaliating, discriminating against, or terminating employees or applicants because they refused to waive any such right, forum, or procedure. An employer found to be in violation of Section 432.6 may be subject to an unlawful employment practice under FEHA. A court may award an impacted applicant/employee injunctive relief and any other remedies available, in addition to reasonable attorney’s fees.
There are limited exceptions to this new law for public employers. The most relevant being that this new law does not apply to post dispute settlement agreements or negotiated severance agreements. In addition, existing mandatory employment arbitration agreements in effect prior to January 1, 2020 are not impacted. Rather, these new restrictions will apply only to contracts for employment entered into, modified, or extended on or after January 1, 2020.
While this new law also indicates that it is not intended to invalidate a written arbitration agreement that is otherwise enforceable under the Federal Arbitration Act, it is not entirely clear what that means for mandatory arbitration agreements that would otherwise include waivers of the rights, forums, and procedures of Labor Code and FEHA claims. As a result, it is unclear whether AB 51 will be preempted by the Federal Arbitration Act. We anticipate there will be litigation regarding whether AB 51 is preempted by the Federal Arbitration Act. Governor Brown vetoed similar legislation last year and cited that the legislation violated federal law.
In the meantime, we recommend that any public employers who currently use mandatory arbitration agreements as a condition of employment prepare to comply with AB 51 on January 1, 2020. In order to comply with this law, employers will have a choice of either halting the practice of requiring employees and applicants to enter into arbitration agreements as a condition of employment altogether, or to modify these arbitration agreements to make clear that FEHA and Labor Code claims are not subject to mandatory arbitration. For employers who select the second option, we recommend working closely with legal counsel to have your arbitration agreements modified to comply with AB 51.
Senate Bill (“SB”) 142 – Employee Lactation Accommodations.
Currently, California employers are required to allow an employee to use their break time to express breast milk, and to provide a private location other than a bathroom for such lactation accommodation. Under SB 142, an employer must now provide a private lactation room other than a bathroom that must be in “close proximity to the employee’s workspace” with the following features:
- Is shielded from view and free from intrusion while the employee expresses milk;
- Contain a surface to place a breast pump and personal items;
- Contain a place to sit;
- Have access to electricity or alternative devices (such as extension cords or charging stations) needed to operate an electric or battery-powered breast pump.
An employer may comply with this new law by designating a lactation location that is temporary due to operational, financial or space limitations so long as such space still meets the above-referenced requirements.
Separately, employers must also provide access to a sink with running water and a refrigerator or other cooling device suitable for storing milk in close proximity to the employee’s workspace. While this requirement to provide a sink and a refrigerator does not necessarily require that they be provided in the lactation room, it is unclear if providing these in a bathroom will satisfy this requirement.
If an employer uses a multipurpose room as a lactation room, such use shall take precedence over other uses but only for the time it is in use for lactation purposes. An employer in a multitenant building or multiemployer worksite may comply with this new law by providing a space shared among multiple employees within the building or worksite if the employer cannot provide a lactation location within the employer’s own workspace. Employers or general contractors that coordinate a multiemployer worksite shall either provide lactation accommodations or provide a safe and secure location for a subcontractor employer to provide lactation accommodation on the worksite, within two business days, upon written request of any subcontractor employer with an employee that requests accommodation.
The only potential exemption to these new requirements is for employers with fewer than fifty (50) employees who can demonstrate that this requirement would impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature, or structure of the employer’s business. An employer who can establish such undue hardship shall make reasonable efforts to provide the employee with the use of a room or other location, other than a toilet stall, in close proximity to the employee’s work area, for the employee to express milk in private.
An employer who fails to provide break time or adequate lactation accommodations may be fined one hundred dollars ($100) for each day an employee is denied reasonable break time or adequate space to express milk.
In addition, SB 142 requires that California employers develop and implement a policy regarding lactation accommodation requirements that include the following:
- A statement about an employee’s right to request lactation accommodation;
- The process by which the employee makes the request;
- An employer’s obligation to respond to the request; and
- A statement about an employee’s right to file a complaint with the Labor Commissioner for any violation of the law.
Employers are required to include the policy in an employee handbook or set of policies that are made available to employees, and distribute the policy to new employees at the time of hire and when an employee makes an inquiry about or requests parental leave. If an employer cannot provide break time or a location that complies with their policy, the employer must provide a written response to the employee.
Because this law goes into effect here shortly on January 1, 2020, employers should conduct an audit at each of their worksites to determine what potential on-site locations can be used for a lactation accommodation, and to begin making contingency plans to address any existing inabilities to provide such accommodations at a worksite. In addition, agencies need to begin working on drafting a lactation accommodation policy to provide employees in accordance with this new law.