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Laws encouraging employers to take reasonable measures to prevent sexual harassment and discrimination in the workplace have been in place for years. But many employers focused their initial efforts on creating policies preventing harassment in the workplace and ensuring these policies were effectively implemented. They usually devoted less time to sexual harassment training. Those employers who did initiate training programs in the workplace were often rewarded with complaining and eye-rolling from employees, the attitude of many employees being: “I don’t need anyone to tell me what sexual harassment is.” Yet, during the 2002-03 fiscal year, 4,231 sexual harassment cases were filed with California’s Department of Fair Employment and Housing, totaling 22 percent of all cases filed. Sexual harassment costs the average Fortune 500 company $6.7 million per year in indirect costs alone. To address these concerns, Assemblywoman Sarah Reyes, D-Fresno, Calif., introduced AB 1825, which requires mandatory sexual harassment training for California employers. Gov. Arnold Schwarzenegger signed AB 1825 into law in September and it went into effect Jan. 1. At first glance, the new statute, Government Code �12950.1, appears relatively straightforward. Upon closer examination, however, there are significant ambiguities concerning the scope of employers covered by the new law and the specific type and frequency of the training required. There is also little guidance concerning the possible evidentiary implications that a failure to comply with the new statute might have in a sexual harassment suit against the employer. As signed by the governor, AB 1825 requires employers with 50 or more employees to provide at least two hours of interactive training and education regarding sexual harassment prevention, identification and correction to all supervisory employees within one year of Jan. 1, 2005, and thereafter for all new supervisory employees within six months of promotion to a supervisory position. By Jan. 1, 2006, therefore, employers must provide two hours of such training to all supervisory employees. After Jan. 1, 2006, covered employers must provide sexual harassment training and education to each supervisory employee once every two years. Employers that provided training to supervisors in 2003 or 2004 are exempt from the initial requirement. For state employees, the required training is to be incorporated into the 80 hours of mandatory training for all new supervisory employees pursuant to Government Code �19995.4(a). WHICH EMPLOYERS ARE COVERED? By its terms, the statute applies to “any person regularly employing 50 or more persons.” The statute applies not only to entities that regularly employ 50 or more employees, but also to those “regularly receiving the services of 50 or more persons providing services pursuant to a contract.” Thus, an employer may not avoid the statute’s reach by arguing that a sufficient number of its workers are independent contractors. Presumably, the statute is intended to apply to employers with 50 or more employees or independent contractors in California, but this is not made explicit. If the statute is read literally, it would apply to all employers with more than 50 employees, even if the employer and all its employees are located out of state. Surely such a result was unintended, and as a matter of due process it is not legally possible. But what if ABC Corp. employs 49 employees out of state and 49 employees in California? The statute arguably requires ABC Corp. to provide training to all its supervisors in California even though it does not have 50 or more employees in California. Situations easily can be envisioned that would require an employer to provide training to only one supervisor, again a result perhaps not intended by the Legislature. And what if XYZ Corp. had 49 employees in one location in California and had a wholly-owned subsidiary with 49 employees in another location in California? Are the employees aggregated such that both companies would have to train all their supervisors? The answer is not clear under AB 1825 as currently drafted. To contrast, the recently enacted California WARN Act applies to “any industrial or commercial facility” that has employed 75 or more persons within the preceding 12 months. This language provides a far clearer definition of who is covered by the WARN Act. In the above example, neither ABC Corp. nor XYZ Corp. would be covered under the California WARN Act because neither has an “industrial or commercial facility” in California with more than 75 employees. AB 1825 could have been drafted to more explicitly define its reach. Unfortunately it was not, and employers will have to await amendment or judicial interpretation before they can be certain whether they need to comply. Until that time, the safest reading is the broadest one allowed by due process: Employers should treat all subsidiaries as one “employer,” and all California “employers” with more than 50 employees, regardless of their location, should provide the required training to all supervisory employees in California. WHO MUST RECEIVE TRAINING? The new statute requires that employers provide sexual harassment training only to “supervisors.” Government Code �12926(r) defines a “supervisor” as any individual having the authority to “hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward or discipline other employees, or the responsibility to direct them, or to adjust their grievances, or effectively to recommend that action, if � the exercise of that authority is not of a merely routine or clerical nature, but requires the use of independent judgment.” Given the amount of litigation over who exactly is a “supervisor” for purposes of sexual harassment liability, employers would be wise to err on the side of caution and provide training to all employees even arguably meeting this definition of a supervisor. The statute is intended only to set forth minimum requirements. Obviously, many employers already provide training to all employees, not just supervisors. There is no reason to change this practice under the new law; indeed, many employers may want simply to provide the now-required training to all employees regardless of classification. WHAT TYPE OF TRAINING IS REQUIRED? The legislative history shows that AB 1825 is intended to provide a floor, not a ceiling, for an employer’s sexual harassment training. AB 1825 explicitly does not “discourage or relieve any employer from providing for longer, more frequent or more elaborate training and education regarding workplace harassment or other forms of unlawful discrimination in order to meet its obligations to take all reasonable steps necessary to prevent and correct harassment and discrimination.” But the new statute does set forth minimum standards for the required training. The training must be at least two hours and it must be in a classroom setting or through other “effective interactive” means. The training must provide: information and guidance regarding both federal and state laws regarding sexual harassment; information about the correction of harassment and the remedies available; and “practical examples” of harassment. Training must be presented by educators with “knowledge and expertise in the prevention of harassment, discrimination and retaliation.” By requiring that the training be “interactive,” an employer no longer can simply have its supervisors watch a video or read a policy manual, even if this is done in a “classroom setting.” The statute also appears to require that the training be conducted in-person, although an interactive online seminar or “webinar” may suffice. Training must also be conducted by those with “knowledge and expertise” in preventing harassment, discrimination and retaliation. The law does not, however, require that the training necessarily be conducted by outside personnel. Experienced internal human resources professionals should have sufficient “knowledge and expertise” in the area to meet the statute’s requirements. Interestingly, the statute on its face requires only training related to sexual harassment, discrimination and retaliation. Employers would be wise, however, to take advantage of the required training to also educate their supervisors regarding discrimination, retaliation and harassment based on race, age, disability, religion, etc. Indeed, a race discrimination plaintiff could make evidentiary hay out of the fact that an employer provided sexual harassment training every six months but never provided training on racial discrimination. These standards require employers to examine closely their current training practices. Even those employers who currently provide regular training will likely need to make substantial changes in their training program. WHEN AND HOW OFTEN MUST TRAINING BE PROVIDED? The statute requires training to be provided to all supervisory employees within one year of Jan. 1, 2005, and thereafter for all new supervisory employees within six months of promotion to a supervisory position. Employers are deemed in compliance with the initial requirement if they provided training and education to supervisors after Jan. 1, 2003. After Jan. 1, 2005, refresher training is required once every two years. By the statute’s terms, if an employer provides training to all its supervisors as of Jan. 1, 2005, it will still have to provide additional training for all employees promoted to a supervisory position within six months. If only a small number of employees have been promoted to supervisory positions in that time frame, the statute again could require an employer to provide training to an extremely small number of individuals. The statute therefore requires employers not only to keep careful track of those positions it considers supervisory in nature, employers must also track the timing of all promotions. Employers can easily avoid these logistical problems by simply providing the required training to all supervisory employees every six months. That way the training will be sure to reach all newly promoted supervisors regardless of the timing of their promotions. In a letter to Gov. Schwarzenegger requesting that he veto AB 1825, the California Manufacturers and Technology Association wrote with concern that the bill would set “a precedent that each time Legislature passes a bill that specifically refers to discrimination or harassment � employers will be obligated to develop more specific training and repeat the training all over again.” However, nothing in the statute would appear to require such repeated training. There is no requirement in the statute that the training provided be up-to-the-minute current, only that instructors have “knowledge and expertise” in the area and cover both state and federal law. Employers who provide the required training every six months, utilizing instructors who take care to point out significant changes to the law occurring since the most recent training session, clearly have met the statute’s requirements. WHAT ARE THE CONSEQUENCES OF VIOLATING THE STATUTE? If an employer violates any of the statute’s requirements, the DFEH must issue an order requiring compliance; the statute provides no monetary penalty for failure to meet its requirements. However, a failure to comply with the statute carries significant potential ramifications in sexual harassment suits brought against the employer. The statute provides that a claim that the training failed to reach a particular individual does not automatically result in the liability of the employer for subsequent sexual harassment. On the other hand, the statute also provides that an employer’s compliance with the statute does not automatically insulate it from liability for harassment. Questions will inevitably arise regarding the permissible evidentiary inferences juries might make based on a failure to meet the training requirements. While a failure to comply may not automatically result in employer liability in a sexual harassment suit, plaintiff attorneys certainly will seek to use an employer’s failure to provide the required training as evidence that the employer has not taken its prevention efforts seriously. Evidence Code �669 provides that the failure of a person to exercise “due care” is presumed if “he violated a statute,” the violation “proximately caused injury to a person,” the injury resulted from an occurrence “of the nature which the statute was designed to prevent,”and the person suffering the injury was “one of the class persons for whose protection the statute was adopted.” A violation of the training requirements in AB 1825 would appear to meet these requirements. It is not a stretch to suggest that a supervisor’s sexual harassment of an employee could be “proximately caused” by the employer’s failure to train supervisors in the prevention of sexual harassment in the workplace, and all California employees are clearly the “class of persons” for whose protection the training requirements were adopted. Thus, while AB 1825 provides that an employer will not necessarily be automatically liable for sexual harassment if the required training failed to reach the alleged harasser, it could be argued that Evidence Code �669 creates a presumption of liability. If such a presumption is created, perhaps it could be rebutted by a showing that the employer provided the training, but the harassing supervisor excusably failed to attend. The precise scope of these evidentiary ramifications will likely need to be resolved by the courts. Even in the absence of any evidentiary presumption, juries may be predisposed to increase damage awards in a sexual harassment claim where an employer failed to provide the required training. Attorneys on both sides will want carefully to draft jury instructions describing the inferences juries may permissibly make upon a finding that the employer failed to provide the requisite training. And even if an employer may not be automatically liable for sexual harassment by failing to provide the required training, Evidence Code �669 may be used effectively to argue that an employer who fails to provide the required training is automatically liable in a separate claim for failure to prevent harassment under Government Code �12940(k). Employers failing to provide the training may also be deprived, as a matter of law, from availing themselves of the avoidable consequences defense described in State Department of Health Services v. Superior Court. A necessary requirement of this defense is that the employer took “all reasonable steps to prevent and correct workplace harassment.” Prior to the enactment of AB 1825, an employer arguably might still have availed itself of this defense if it did not provide training, assuming that it had a comprehensive sexual harassment policy in place, it made all employees aware of the policy, and it thoroughly investigated all complaints. Now that sexual harassment training is required by law, there is little chance for an employer who failed to provide the training to argue it has taken “all reasonable steps” to prevent harassment. Attorneys should immediately advise their clients covered by the new law of its requirements. For employers who have not provided training in the past, counsel can assist in creating a training program that complies with the new law. For those employers who already provide sexual harassment training, counsel can review the training program to ensure compliance with the new requirements. Even those employers already providing some form of training will likely need to make substantial changes in their training regimen. Employers should also be advised to keep detailed records of the topics covered during training and of all attendees. Even though sexual harassment training is now required by law, not all employment concerns — even in California — can be addressed by legislation: Some employees will still complain or roll their eyes. Matthew Goodin is an associate in the labor and employment practice of Epstein Becker & Green in San Francisco. He can be r eached at [email protected] If you are interested in submitting an article to Law.com, please click here for our submission guidelines.

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