Benjamin M. Ebbink, Of Counsel with Fisher Phillips in Sacramento (Photo: Courtesy photo)

Many legislative observers nicknamed 2018 as the “Year of the #MeToo Movement,” as state houses across the country (including California) introduced and enacted a wave of state laws designed to combat sexual harassment in the workplace. However, if the early weeks of this year are any indication, this trend of legislative activity will continue well into 2019 and beyond.

In California, a pair of proposals that were vetoed by Governor Jerry Brown in 2018 have already been re-introduced, illustrating that newly-sworn-in Governor Gavin Newsom will be put to an early test on #MeToo-inspired legislation.

Previous Veto of Assembly Bill 3081

As introduced last year, Assembly Bill 3081 by Assemblywoman Lorena Gonzalez (D-San Diego) would have enacted a number of far-reaching provisions related to sexual harassment. However, by the end of the legislative process the measure had been whittled down to just two major provisions. First, the bill would have imposed joint liability on employers and labor contractors (such as temporary staffing agencies) for harassment. Second, AB 3081 would have enacted new anti-retaliation protections for victims of sexual harassment, and would have created a rebuttable presumption of retaliation if adverse action was taken within 30 days of the employer becoming aware that the employee was a victim of sexual harassment or other crimes.

After heavy lobbying from both sides, Governor Brown vetoed AB 3081. In his succinct veto message, Brown stated, “Most of the provisions in this bill are contained in current law and are therefore unnecessary. To the extent there are new provisions, they are confusing.”

However, never one to be deterred, Assemblywoman Gonzalez has introduced similar legislative proposals in 2019, this time breaking them up into two separate pieces of legislation.

Joint Liability for Harassment

Under California law, the determination of who is liable in a joint employer situation is generally made by evaluating who exerted control over the working conditions of the employee. Martinez v. Combs. However, in 2015 California enacted Labor Code §2810.3 to impose statutory joint liability between client employers and labor contractors for the payment of wages and the provision of workers' compensation insurance.

Assembly Bill 170 proposes to add a new provision to the Fair Employment and Housing Act (FEHA) to extend similar joint liability to unlawful harassment (not just sexual harassment).

As a fundamental matter, employers are generally concerned about statutory provisions that establish joint liability for situations which the employer may not have requisite control. For example, in arguing against AB 3081 last year, the California Chamber of Commerce stated that there is no basis, for example, that a business that contracts for janitorial services should be deemed statutorily liable for sexual harassment when there is absolutely no way in which that business can engage or force the janitorial company to comply with the law and they do not control the relationship between the contractor and its employees.

Instead, employers believe the current “control” standard appropriately assigns legal responsibility to the party or parties that actually control the situation. Accordingly, they argue that current law already provides an adequate pathway for civil liability for a business that is actually in control of the employees of another.

Governor Brown apparently agreed, and vetoed AB 3081 last year. However, it's a new year and California has a new governor. It remains to be seen whether Governor Newsom will share the concerns of his predecessor, or will sign AB 170 into law.

Retaliation Protections and Rebuttable Presumption

Current California law prohibits employers from discharging, or discriminating or retaliating against, an employee because of the employee's status as a victim of domestic violence, sexual assault or stalking.

Assembly Bill 171 would add the employee's status as a victim of “sexual harassment” to these provisions.

Moreover, AB 171 would establish a rebuttable presumption of unlawful retaliation if an employer, within 90 days off the employee informing them (or the employer has actual knowledge) of their status of a victim of sexual harassment (or the other protected categories), takes adverse action against the employee.

These provisions are similar to those that were contained in AB 3081 last year, except that measure contained a mere 30-day rebuttable presumption period.

While no employer condones discrimination against an employee who is a victim of sexual harassment, employers generally express concern about shifting the burden of proving retaliation in this manner in such cases. In some employers' experiences, employees who suspect they are about to be suspended or terminated for very good reasons may avail themselves of making a baseless complaint or allegation in order to give basis to a claim for “retaliation.” While the employer can still rebut such a presumption, the burden and expense of doing so falls to the employer.

However, even more importantly, employers are concerned that AB 171 adds these provisions to the Labor Code, rather than the Government Code. This is troubling for two reasons. First, FEHA already protects employees against discrimination and retaliation, so adding these provisions to the Labor Code is unnecessary and duplicative.

Moreover, adding these provisions to the Labor Code raises the specter of the one word that sends shivers down the spine of employers statewide—PAGA (the Labor Code Private Attorneys General Act). PAGA allows individuals to pursue a “representative action” on behalf of similarly situated employees (without the class action requirements) for any violation of the Labor Code, no matter how small and without any showing of harm. Consequently, employers fear that if sexual harassment protection is added to the Labor Code, they will not only be subject to FEHA remedies, but also now lawsuits under PAGA for the same alleged violation.

Conclusion

Governor Newsom has not yet taken a position on either AB 170 or AB 171, so it remains to be seen whether they have a better shot at being signed into law than last year's AB 3081. But he has expressed strong support for the #MeToo movement, and First Partner Jennifer Siebel Newsom has been a vocal advocate for issues related to sexual harassment and gender equality. All of this has led some to speculation that bills such as these might fare better under a Governor Newsom—which is likely why they are being re-introduced so quickly.

And these aren't the only to #MeToo movement bills to make a return appearance in California in 2019. Other measures that were vetoed by Governor Brown are getting a second chance as well, including bills to prohibit mandatory arbitration agreements in employment and to triple (from one year to three years) the statute of limitations for filing administrative FEHA claims.

It's clear that legislative policy changes regarding workplace sexual harassment are far from being settled, and California employers will have to closely watch further developments in Sacramento.

Benjamin M. Ebbink is of counsel with Fisher Phillips in Sacramento. He may be reached at [email protected].