California Legislature Proposes Bills That Could Change Employment Contracts Regarding Sexual Misconduct

Since the worldwide phenomenon of the #MeToo movement swept the nation last year, activists, supporters and government officials have pressed for reform in the workplace. California legislature has recently proposed a few bills, that if signed into law, would limit settlement agreements, ban contractual limits on arbitration agreements, ban waivers on right to testify, and greatly expand the standards and laws surrounding sexual harassment.

SB 820: For settlement agreements entered into, on or after January 1, 2019, SB 820 would prohibit and make void any provision that prevents the disclosure of information related to civil or administrative complaints of sexual assault, sexual harassment, and workplace harassment or discrimination based on sex. 

AB 3080: For arbitration agreements entered into, modified or extended on or after January 1, 2019, AB 3080 would forbid any business to require any job applicant, employee, or independent contractor not to disclose instances of sexual harassment suffered, witnessed, or discovered in the work place, opposing unlawful practices, or participating in harassment and discrimination related investigations or proceedings, or that a job applicant or employee waive any right, forum, or proceeding for violation of the FEHA or Labor Code, including any requirement that an individual “opt out” or take affirmative action to preserve such rights.

SB 3109: On or after January 1, 2019, this bill would make void and unenforceable any provision that waives a party’s right to testify in a legal proceeding (if required or requested by court order, subpoena or administrative or legislative request) regarding criminal conduct or sexual harassment on the part of the other contracting party, or the other party’s agents or employees.

SB 1300: This bill has several components, primarily:

  • Prohibit reliance on Brooks v. City of San Mateo to determine what conduct is sufficiently severe or pervasive to constitute actionable harassment; Disprove any language in Kelley v. Conco Companies that might support different standards for hostile work environment harassment depending on the type of workplace; and affirm Nazir v. United Airlines Inc.’s “observation that hostile working environment cases involve issues “not determinable on paper.”
  • Expand an employer’s potential liability under the FEHA for acts of nonemployees to all harassment;
  • Prohibit an employer from requiring an employee to sign a release of FEHA claims or rights or a document prohibiting disclosure of information about unlawful acts in the workplace;
  • Prohibit a prevailing defendant from being awarded attorney’s fees and costs unless the court finds the action was frivolous, unreasonable, or groundless when brought or that the plaintiff continued to litigate it after it became apparent.  
  • Authorize employers to provide bystander intervention training to its employees.

What is an Arbitration Agreement in Employment?

In the employment context, an arbitration agreement is a contract between an employer and employee, in which an employee gives up their right to sue the company or employer in state or federal court over job-related issues. Rather, the employee would be required to pursue claims through arbitration, or privately outside of court. When a case goes through arbitration, there is no jury, but rather a retired judge or attorney who decides the verdict. Also, an arbitration cannot usually be appealed by either party. These could be disadvantages for an employee seeking justice.

While employers would continue to be allowed to use arbitration under the bill, it would be through a third party, and it could not be used as a condition of employment or employment benefit. The employee or victim would have the right to participate in investigations or other proceedings regarding harassment or discrimination, such as suing in court.

What is a Nondisclosure Agreement in Employment?

In the employment context, a nondisclosure agreement, also known as a confidentiality agreement is an agreement between an employer and employee that certain information will be protected. While many businesses use nondisclosure agreements to protect trade secrets, it is common for nondisclosure agreements to include sexual harassment claims and discrimination.

The new bills would ban employers from requiring nondisclosure agreements in respect to sexual misconduct as a condition of employment or employment benefits. This means complaints and reports would not be swept secretly under the rug within the company, but employees and victims would have the right to talk freely about their experiences.

Under the bill, nondisclosure agreements would be permitted at request of the employee or victim or through voluntary consent. This bill would apply to employment contracts entered into, modified, or extended on or after January 1, 2019. It needs the governor’s signature to become law.

If you feel you have been unlawfully discriminated against by your employer, an employment discrimination attorney can help you figure out if you have a potential claim and a best course of action. Arata, Swingle, Van Egmond & Goodwin provides consultation and representation over a full range of legal services for our clients. Call us today at (209) 522-2211 or contact us online.