California Governor, Jerry Brown, recently signed into law several bills that will have a significant impact on California employers’ workplace obligations. Effective January 1, 2019, the new laws will restrict nondisclosure agreements and certain settlement agreements covering harassment and discrimination claims.

These changes significantly expand harassment training obligations (including for employers of under 50), require female quotas on California-headquartered boards of directors, and potentially require updating lactation accommodations.

2019 Sexual Harassment Laws

AB 3109 (Disclosure of Sexual Harassment)

This bill makes void and unenforceable any provision in a contract or settlement agreement that prevents a party to the contract from testifying about criminal conduct or sexual harassment in an administrative, legislative, or judicial proceeding.

SB 224 (Sexual Harassment)

This bill amends section 51.9 of the Civil Code to expand the types of relationships that can be subject to a claim for sexual harassment to include lobbyists, elected officials, directors, producers, and investors. This statute generally applies to work relationships where one person holds himself out as being able to help someone establish a business or professional relationship directly or with a third party.

SB 820 (Settlement of Sexual Harassment Claims)

This new law prohibits provisions in settlement agreements entered into after January 1, 2019 that prevent disclosure of factual information pertaining to claims of sexual assault, sexual harassment, gender discrimination or related retaliation that have been filed in court or before an administrative agency. The new law does not prohibit a provision that prevents the parties to the agreement from disclosing the amount of the settlement. Additionally, at the claimant’ request, the settlement agreement may include a provision that limits the disclosure of the claimant’s identity or of facts that would lead to the discovery of the claimant’s identity.

SB 1300 (FEHA Amendments) 

This bill amends FEHA in a number of respects, including (1) to add a provision making it an unlawful practice for an employer to require an employee to release a FEHA claim in exchange for a bonus, raise, or continued employment; (2) to make employers liable for any kind of unlawful harassment by non-employees (not just for sexual harassment as under existing law) where the employer knew or should have known of the harassment and failed to take appropriate remedial action; and 3) to add certain statements of legislative intent to make it harder for employers to prevail on harassment claims (e.g. a legislative declaration that harassment cases are rarely appropriate for resolution on summary judgment, and a declaration that a single act of harassment may suffice to support a finding of a hostile work environment).

SB 1343 (Sexual Harassment Training) 

Existing law requires employers with 50 or more employees to provide supervisors with sexual harassment training. This new law expands the training requirement to employers with 5 or more employees and requires that employers provide at least 2 hours of training to supervisory employees and at least one hour of training to non-supervisory employees by January 1, 2020 and once every two years thereafter. It also requires the DFEH to develop and post-training materials for employers to use for these purposes.

AB 1619 (Sexual Assault; Statute of Limitations)

This new law greatly enlarges the statute of limitations for filing a civil action for damages for sexual assault to 10 years after the alleged assault or 3 years after the plaintiff discovered or reasonably discovered injury as a result of the assault, whichever is later.

Criminal History Inquiries

SB 1412 (Criminal History Inquiries) 

This bill amends Labor Code section 432.7, which limits employers’ ability to conduct criminal history inquiries and to use criminal history information in employment decisions. Existing law makes an exception for employers who are required by federal or state law to inquire into an applicant’s or employee’s criminal history.

The amendment is intended to tighten the exception to apply only where an employer is required by law to inquire into a “particular conviction” or where an employer cannot by law hire someone with a “particular conviction.” to make clear that employers may only consider “particular convictions” when assessing criminal history.

“Particular conviction” is defined only to mean “a conviction for specific criminal conduct or a category of criminal offenses prescribed by any federal law, federal regulation or state law that contains requirements, exclusions, or both, expressly based on that specific criminal conduct or category of criminal offenses.”

Payroll Bills Signed into Law

SB 1252 (Copy of Payroll Records) 

Existing law already requires that employees have a right to inspect or copy their payroll records and that they must be allowed to do so within 21 days of such a request. This new law clarifies that if an employee requests a copy of the records, the employer must provide the copies (as opposed to requiring employees to copy the records themselves).

AB 1565 (Contractor Liability) 

This new law took effect immediately as urgency legislation. It clarifies a new law enacted last year making certain direct contractors performing work in the state liable for unpaid wages by subcontractors. The amendments to the law provide requirements that must be met in order for a direct contractor to withhold payments to a subcontractor for “disputed sums.”

In order to withhold payment, the contractor must specify in its contract with a subcontractor all items of information that will be requested of the subcontractor, such as payroll records and other information related to hours worked, etc.

FEHA Amendments

SB 1300

This bill amends FEHA in a number of respects, including (1) to add a provision making it an unlawful practice for an employer to require an employee to release a FEHA claim in exchange for a bonus, raise, or continued employment; (2) to make employers liable for any kind of unlawful harassment by non-employees (not just for sexual harassment as under existing law) where the employer knew or should have known of the harassment and failed to take appropriate remedial action; and (3) to add certain statements of legislative intent to make it harder for employers to prevail on harassment claims (e.g. a legislative declaration that harassment cases are rarely appropriate for resolution on summary judgment, and a declaration that a single act of harassment may suffice to support a finding of a hostile work environment).

Paid Family Leave Uses

SB 1123

California has a paid family leave program that provides partial wage replacement to employees who take leaves of absence for specified purposes. This new law expands the program to provide paid family leave benefits beginning January 1, 2021 to employees who take time off for reasons associated with being called to active duty or a spouse, domestic partner, parent, or child being called to active duty.

Gender Composition of Boards of Directors

SB 826

This new law provides for mandatory inclusion of women on corporate boards of directors. Specifically, by the end of 2019, publicly held domestic or foreign corporations with principal executive offices in California must have a minimum of one female director on its board, and by the end of 2021, these corporations must comply with the following:

(1) If its number of directors is six or more, the corporation shall have a minimum of three female directors; (2) If its number of directors is five, the corporation shall have a minimum of two female directors; (3) If its number of directors is four or fewer, the corporation shall have a minimum of one female director. The new law also requires the Secretary of State to publish certain statistical information in this regard on its website.

Human Trafficking

AB 2034

This new law requires employers who operate an intercity passenger rail, light rail, or bus station to provide by January 1, 2021 at least 20 minutes of training on human trafficking awareness to employees who are likely to come into contact with human trafficking victims.

SB 970

This new law amends FEHA to require hotel and motel employers, by January 1, 2020, to provide at least 20 minutes of training on human trafficking awareness to employees who are likely to come into contact with victims of human trafficking. These employees include reception employees, housekeeping employees, bell desk employees, and other employees who regularly interact with customers. The new law requires covered employers to provide such training to covered employees within 6 months of hire and once every two years thereafter.