Two new California laws demonstrate the widespread impact of the #MeToo Movement and the focus on putting a stop to sexual harassment in the workplace.
SB 820: Prohibiting “Hush Money” Settlements
Many articles and investigative reports have been published about prominent public figures, politicians and other famous (or infamous) persons with an apparent history of engaging in serial sexual harassment but who were able to hide their past by making sizable settlement payments to their victims. And, through clever lawyering, those harassers conditioned their settlements on powerful confidentiality clauses in settlement agreements. In the process, these perpetrators continued their actions unchecked in some instances for many years.
These types of settlements are commonly referred to as “hush money” payments.
On September 30, 2018, California Governor Jerry Brown approved a bill, SB 820, that prohibits a provision in settlement agreements that prevents the disclosure of information pertaining to sexual harassment and sex discrimination. The law became effective on January 1, 2019 and has been added as Section 1001 to the California Code of Civil Procedure. (See Governor Brown Signs Leyva Bill Banning Secret Settlements in Sexual Assault and Harassment Cases, Sept. 30, 2018, https://sd20.senate.ca.gov/news/2018-09-30-governor-signs-leyva-bill-banning-secret-settlements-sexual-assault-and-harassment.)
This law significantly impacts California employers who face sexual harassment, discrimination, and retaliation claims that may be without merit. In the past, many of those types of claims may have warranted nuisance-value settlements to avoid the cost, disruption, and uncertainty of litigation. An employer’s concern about setting a bad precedent for future claims may now militate toward the need to fight all claims on the merits.
The law does, however, still allow the parties to agree to keep confidential the disclosure of the amount paid to settle the claim, at the request of either party. Since the amount of hush-money paid is often the biggest outward indicator of the perceived merits of the underlying claims made, the overall impact of this law on the percentages of settlements may be limited.
A violation of SB 820 will make any confidentiality provisions void as a matter of public policy and may support an award of civil damages against the offending employer.
This legislation is high stakes and important for all California employers to consider before settling these types of disputes.
SB 1343: Mandatory Workplace Harassment Training for California Employers with Five or More Employees Working in California
Since 2005, California law has required employers having fifty (50) or more employees to provide at least two hours of sexual harassment training to supervisors every two years.
SB 1343, signed by Governor Brown on October 16, 2018, changes this by requiring employers with five or more employees to provide (1) non-supervisory employees with at least one hour of the training every two years and (2) supervisory employees with at least two hours of such training every two years. The training must be completed by January 1, 2020 and provided again every two years thereafter.
The new law requires California’s Department of Fair Employment and Housing (“DFEH”) to develop or obtain two online training courses—a two-hour online course for supervisory employees and a one-hour course for non-supervisory employees—and to make them available on the DFEH website. The law specifies that the online training courses shall contain an interactive feature that requires the viewer to respond periodically to questions in order to continue. In addition, the DFEH is required to make the online training videos available in English, Spanish, Simplified Chinese, Tagalog, Vietnamese, Korean and any other language spoken by a “substantial number of non-English speaking people.”
SB 1343, otherwise, does not change the training content requirements under existing law. Specifically, existing law requires the training and education to include information and practical guidance regarding the federal and state statutory provisions concerning the prohibition against and the prevention and correction of sexual harassment and the remedies available to victims of sexual harassment in employment. The training and education must (1) include practical examples aimed at instructing employees in the prevention of harassment, discrimination, and retaliation, and (2) be presented by trainers or educators with knowledge and expertise in the prevention of harassment, discrimination, and retaliation. The latter requirement typically equates to the training being provided by experienced employment law attorneys or licensed investigators.
Scherer Smith & Kenny LLP remains available to guide you through these and other nuances in California’s dynamic and ever-changing employment law arena. For additional information, please contact Denis Kenny at (dsk@sfcounsel.com), Ryan Stahl at (rws@sfcounsel.com), or John Lough, Jr. at (jbl@sfcounsel.com).
– Written by Denis Kenny