Seyfarth Synopsis: California is rife with regulation of how employers may obtain and consider background check information for use in hiring and personnel decisions. The relatively new California ban-the-box law (effective January 1, 2018) and the older Los Angeles and San Francisco ordinances and amendments to the California Labor Code set strict rules on when and how employers can consider criminal and credit histories in employment. Many details to follow.

Before 2014, when San Francisco enacted a city-wide ban-the-box law, criminal history background checks were largely unregulated in California, except for a handful of Labor Code provisions that barred consideration of certain types of criminal records. And California employers were stripped of their ability to use credit checks for hiring and other personnel decisions in 2012, by amendments to the Labor Code that restricted the use of credit checks to very narrow circumstances. Los Angeles and the State of California have now joined San Francisco with their own ban-the-box laws, which markedly differ from San Francisco’s.

This blog highlights the laws concerning criminal and credit history background check reports in California, after briefly discussing the decades-old federal Fair Credit Reporting Act (“FCRA”). As the number of class actions alleging FCRA violations continues to skyrocket, it is critical that California employers understand the basics of all laws affecting employment screening programs and determine what changes to policies, forms, and practices will ensure compliance and reduce the risk of claims.

FCRA Basics

Generally speaking, before an employer may obtain a consumer report (aka a “background check report”)—which may include criminal or credit history, from a third-party background check company (“consumer reporting agency” or “CRA”)—the employer must make a clear and conspicuous written disclosure to the individual, in a document that consists “solely” of the disclosure, that a background check may be done. California’s fair credit reporting statute also requires a separate, stand-alone disclosure, which cannot be combined with the FCRA disclosure. The applicant or employee must provide written consent for the employer to obtain a background check report. There are other requirements for “investigative consumer reports” (those based on interviews of the individual’s friends, neighbors and associates) and employers regulated by the Department of Transportation.

Before an employer relies in whole or in part on a background check report to take an “adverse action” (e.g., rescinding a conditional job offer or discharging an employee), the employer must provide the individual a “pre-adverse action” notice, and include with it a copy of the report and the Consumer Financial Protection Bureau’s Summary of Rights. This notice gives the individual an opportunity to discuss the report with the employer before the employer takes adverse action.

Once the employer is prepared to take the adverse action, it must then give the individual an “adverse action” notice, containing certain FCRA-mandated text.

California employers that rely on criminal and credit history information for employment purposes must also consider state and local laws that impose additional compliance obligations, regardless of whether the information is obtained from a CRA.

Employers May Order “Credit Reports” Only for Certain Positions

As noted, California employers have been hampered in their ability to order credit checks since 2012. Labor Code section 1024.5 states that employers, except for financial institutions, may order a credit check only if the individual works (or is applying to work) in certain positions:

  • a managerial position (as defined in California Wage Order 4);
  • a position in the State Department of Justice;
  • a sworn peace officer or law enforcement position;
  • a position for which the employer must, by law, consider credit history information;
  • a position that affords regular access to bank or credit card account information, Social Security numbers, and dates of birth (all three are required), so long as access to this information does not merely involve routine solicitation and processing of credit card applications in a retail establishment;
  • a position where the individual is or will be a named signatory on the bank or credit card account of the employer or authorized to transfer money or authorized to enter into financial contracts on the employer’s behalf;
  • a position that affords access to confidential or proprietary information; or
  • a position that affords regular access during the workday to the employer’s, a customer’s or a client’s cash totaling at least $10,000.

Setting aside state and federal disclosure and authorization requirements discussed above, any California employer that intends to order a credit check on a position identified above must notify the individual in writing why the employer is using a credit report (e.g., the individual is applying for or holds a position that affords access to confidential or proprietary information).

California’s State and Local Ban-the-Box Laws Restrict Use of “Criminal History”

California’s statewide ban-the-box law (Gov’t Code § 12952), as of January 1, 2018, requires employers with five or more employees (subject to few exceptions) to follow certain procedures when requesting and using criminal history information for pre-hire purposes. Specifically, regardless of the source of the criminal history information, employers must:

  • Wait until after a conditional offer of employment to inquire about criminal history, which means asking applicants directly whether they have been convicted of a crime, ordering a criminal history background check, or making any other inquiry about an applicant’s criminal history.
  • Conduct an individualized assessment of an applicant’s conviction to determine whether it has a “direct and adverse relationship with the specific duties of the job that justify denying the applicant the position.” Unlike the Los Angeles ban-the-box ordinance (discussed below), the California law does not require employers to provide the applicant with their assessment.
  • Notify the applicant of any potential adverse action based on the conviction history. The notice must identify the conviction, include a copy of any conviction history report (regardless of the source), and state the deadline for the applicant to provide additional information, such as evidence of inaccuracy, rehabilitation, or other mitigating circumstances.
  • After waiting the requisite time period, notify the applicant of any final adverse action, of any existing procedure the applicant has to challenge the decision or request reconsideration, and of the applicant’s right to file a complaint with the Department of Fair Employment and Housing.

In contrast to the FCRA pre-adverse and adverse action notices—required only if the adverse decision is based on information obtained from a background check report from a CRA—the California notices are required even if the employer doesn’t order criminal background check reports from a CRA, but learns of the criminal history from a different source (such as an applicant self-disclosure).

Substantively, a wide range of criminal records are off-limits to California employers (unless the employer qualifies for very narrow exceptions identified in the Labor Code). Records that cannot be used are:

  • arrests that did not lead to a conviction;
  • non-felony marijuana convictions that are older than two years;
  • juvenile records; and
  • diversions and deferrals.

Although complying with California law can be challenging, employers that hire in the cities of Los Angeles and San Francisco must also look to the ban-the-box ordinances in these jurisdictions, which exceed the requirements found in the FCRA and the California ban-the-box law.

The Los Angeles Fair Chance Initiative for Hiring Ordinance

The Los Angeles ordinance, effective January 22, 2017, applies to any “employer” located or doing business in the City of Los Angeles and employs 10 or more employees. An employee is any person who performs at least two hours of work on average each week in the City of Los Angeles and who is covered by California’s minimum wage law. The ordinance also applies to job placement and referral agencies and is broad enough to cover other types of work, including temporary and seasonal workers and independent contractors.

The L.A. ordinance goes beyond California-imposed requirements by imposing the following onerous steps on employers when considering criminal history (regardless of the source):

  • Perform a written assessment that “effectively links the specific aspects of the Applicant’s Criminal History with risks inherent in the duties of the Employment position sought by the Applicant.” The assessment form that contains the relevant factors can be found on the city’s website.
  • Provide the applicant a “Fair Chance Process”—giving the applicant an opportunity to provide information or documentation the employer should consider before making a final decision, including evidence that the criminal record is inaccurate, or evidence of rehabilitation or other mitigating factors. As part of this process, the employer must include with the pre-adverse action notice a copy of the written assessment and any other information supporting the employer’s proposed adverse action.
  • Wait at least five business days to take adverse action or fill the position. If the applicant provides additional information or documentation, the employer must consider the new information and perform a written reassessment, which is at the bottom of the form mentioned above. If the employer still decides to take adverse action against the applicant, the employer must notify the candidate and attach a copy of the reassessment with the adverse action notice.

Los Angeles also states that all solicitations and advertisements for Los Angeles opportunities must state that the employer will consider qualified candidates with criminal histories in a manner consistent with the law.

Moreover, employers must post, in a conspicuous workplace that applicants visit, a notice that informs candidates of the Los Angeles ordinance. Copies of the notice must be sent to each labor union or representative of workers that has a collective bargaining agreement or other agreement applicable to employees in Los Angeles. This notice can be found on the City’s website.

San Francisco’s Fair Chance Ordinance

San Francisco, as of August 13, 2014, became California’s first city to enact a ban-the-box law. Because the new California ban-the-box law provided greater protections to job applicants, the City and County of San Francisco Board of Supervisors (on April 3, 2018) amended the Fair Chance Ordinance (Article 49) to align (in some respects) with the California law. However, employers with five or more employees working in San Francisco that intend to inquire about and consider criminal history (regardless of the source) also must:

  • Provide the applicant or employee with a copy of the Office of Labor Standards Enforcement’s (“OLSE”) Fair Chance Act Notice before inquiring about criminal history or ordering a criminal history background check.
  • Post the OLSE Notice “in a conspicuous place at every workplace, job site, or other location in San Francisco under the Employer’s control frequently visited by their employees or applicants,” and “send a copy of this notice to each labor union or representative of workers with which they have a collective bargaining agreement or other agreement or understanding, that is applicable to employees in San Francisco.” The posted Notice must be in English, Spanish, Chinese, and any language spoken by at least 5% of the employees at the workplace, job site, or other location at which it is posted. The Notice currently is on the OLSE’s website.

Covered San Francisco employers are barred from considering the following types of criminal records (even though these records are not off-limits in other California cities), subject to narrow exceptions: (i) infractions; (ii) convictions that are older than seven years (measured from the date of sentencing); and (iii) any conviction that arises out of conduct that has been decriminalized since the date of the conviction, measured from the date of sentencing (which would include convictions for certain marijuana and cannabis offenses).

California Workplace Solutions

Class actions against employers for failing to follow hyper-technical requirements for background checks have come to dominate the news. Employers in California and elsewhere will want to conduct (privileged) assessments to strengthen their compliance with the myriad laws that regulate use of an individual’s criminal and credit history. Suggested next steps include:

  • Assess coverage under the California, Los Angeles, and San Francisco ban-the-box laws, and California’s law restricting use of credit reports.
  • Review job advertisements and postings both for unlawful and mandatory language regarding criminal history.
  • Review job application and related forms for unlawful inquiries regarding criminal history.
  • Train employees who conduct job interviews and make or influence hiring and personnel decisions, regarding inquiries into, and uses of, credit and criminal history, including best practices for documentation and record retention.
  • Review the hiring process to ensure compliance, including the timing of criminal history background checks, the distribution of mandatory notices, and the application of necessary waiting periods.

Seyfarth Synopsis: Workplace violence is a major concern that can take the form of intimidation, threats, and even homicide. But fret not: California employers can arm themselves with restraining orders, to prevent a modern version of the “Fight Club” at work.

Rule Number 1: If There’s a Workplace Violence Threat, DO Talk About It—In Court

Being at work during a scene reminiscent of “There Will Be Blood” is not an ideal situation. Yet incidents of workplace violence are alarmingly common. According to the Occupational Safety and Health Administration, nearly two million Americans report that they have witnessed incidents of workplace violence, ranging from taunts and physical abuse to homicide. The recent Long Beach law firm shooting by an ex-employee serves as a chilling reminder of what forms such violence can take.

While there is no surefire way to stop unpredictable attacks against employees—whether by a colleague, client, or stranger—California employers can avail themselves of measures to reduce the risk of workplace threats. One such measure is a judicial procedure: a workplace violence restraining order under California Civil Procedure Code section 527.8.

Rule No. 2: Understand What a California Restraining Order Looks Like

A California court can issue a workplace violence restraining order to protect an employee from unlawful violence or even a credible threat of violence at the workplace. A credible threat of violence simply means that someone is acting in such a way or saying something that would make a reasonable person fear for the person’s own safety or that of the person’s family. Actual violence need not have occurred. Many actions short of actual violence—such as harassing phone calls, text messages, voice mails, or emails—could warrant issuing a restraining order.

Restraining orders can extend beyond just the workplace and protect the employees and their families at their homes and schools. A California court can order a person to not harass or threaten the employee, not have contact or go near the employee, and not have a gun. A temporary order usually lasts 15 to 21 days, while a “permanent” order lasts up to three years.

Rule Number 3: Employer Requests Only, Please

The court will issue a workplace violence restraining order only when it is requested by the employer on behalf of an employee who needs protection. The employer must provide reasonable proof that the employee has suffered unlawful violence (e.g. assault, battery, or stalking) or a credible threat of violence, or that unlawful violence or the threat of violence can be reasonably construed to be carried out at the workplace.

So how does an employer request and obtain protection for their employees?

Rule Number 4: Document the “Fight”

The employer must complete the requisite forms and file them with the court. Though the forms do not require it, it often is helpful to include signed declarations from the aggrieved employee and other witnesses.

If a temporary restraining order is requested, a judge will decide whether to issue the order within the next business day, and if doing so will provide a hearing date on a permanent restraining order. A temporary restraining order must be served as soon as possible on the offender. The order becomes effective as soon as it is served. Temporary restraining orders last only until the hearing date.

Rule No. 5: Keep Your Eyes on the Prize at the Hearing

At the hearing, both the employee needing the restraining order and an employer representative should attend. Employers may bring witnesses, too, to help support their case. The person sought to be restrained also has a right to attend, so the employee needing the restraining order should be ready to face that person. If necessary, the employer or the employee can contact the court or local police in advance to request that additional security or protective measures be put in place where there is a threat of harm.

During the hearing itself, the judge may ask both parties to take the stand for questioning. Upon hearing the facts, the judge will either decide to deny the requested order or decide to issue a permanent restraining order, which can last up to three years.

Restraining orders are a serious matter, as employers are essentially asking the court to curtail an individual’s freedom. But such an order is a powerful tool that an employer may find necessary to protect the safety of its employees.

Workplace Solutions: Even though it may relatively easy to demonstrate a credible threat of violence and thus obtain a protective order, know that California courts protect all individuals’ liberty, including their freedom of speech. Obtaining an order to restrain that liberty requires a detailed factual showing. If you have any questions about the process or if this is the right action for you, we highly recommend that you speak to your favorite Seyfarth attorney.

Please click on the below link for an interesting and timely article posted today on our sister blog, ADA Title III News & Insights:

Seyfarth Synopsis: Plaintiffs who pursued web accessibility actions under Title III of the ADA are now using website accessibility to test the limits of a different area of law – employment law – California’s Fair Employment and Housing Act. 

[To continue reading, click here…]

We’re pleased to announce that the 2018 version of our Cal-Peculiarities: How California Employment Law is Different, your indispensable California employment law guide, is arriving next week, to coincide with our annual update Webinar on the same subject.  This edition, like its predecessors, aims to help private employers understand what’s peculiar about California employment law.  In the 2018 Edition, we continue to highlight recent court decisions and legislative developments, and how they may impact you and your business.

The book is available in a convenient, searchable eBook format.  Click here to order your copy today!

We also invite you to join us for a Cal-Pecs Webinar on Tuesday, April 17, 2018! Seyfarth attorneys Ann Marie Zaletel, Chelsea Mesa, and Coby Turner, will discuss the growing list of legal developments—judicial as well as legislative—that should concern executives, managers, general counsel, and human resources professionals with employees in California, including laws related to:

  • Enactment of California’s “Bathroom Bill”
  • New Transgender Identity and Expression Regulations
  • Expansion of Required California Anti-Harassment Training
  • New California Ban-the-Box Law
  • New California Salary History Ban
  • California Immigration Initiatives

There is no cost to attend this program, however, registration is required. Please click here to register! The webinar will be offered at the following times:

1:00 p.m. to 2:30 p.m. Eastern
12:00 p.m. to 1:30 p.m. Central
11:00 a.m. to 12:30 p.m. Mountain
10:00 a.m. to 11:30 a.m. Pacific

On behalf of your Cal-Pecs team, thank you for your continued interest in the blog.

Seyfarth Synopsis: Can employers deny employment to people who use cannabis under a medical prescription authorized by state law? In more and more states, the answer is now “No.”

Changes in cannabis laws are creating a new haze for employers. What follows is a quick summary citing some (not all) states that now require employers to think twice before denying employment to individuals because they tested positive for the use of marijuana that they are ingesting for state-authorized medical reasons.

Potpourri of Pot Protective States

Arizona. Unless failure to do so would cause an employer to lose certain benefits under federal law, an employer may not discriminate because of a person’s status as a cannabis cardholder. While employers may discipline employees for ingesting marijuana in the workplace or for working while under the influence of marijuana, a registered qualifying patient cannot be considered to be under the influence of marijuana solely because of the presence of marijuana in the patient’s system. Ariz. Rev. Stat. §§ 36-2813, 36-2814, 23-493, 23-493.06.

Delaware. An employer cannot discriminate because of a person’s status as a medical cannabis cardholder unless failure to do so would cause the employer to lose certain federal benefits. An employer can, however, prohibit the ingestion, possession, or impairment of marijuana in the workplace. Del. Code Ann. tit. 16, §§ 4905A, 4907A.

Maine. Employers cannot test applicants for cannabis unless they submit a request to the State of Maine and that request is approved. Nor can Maine employers use a positive test for cannabis, by itself, to prove that an employee is impaired by cannabis. An employer can, however, prohibit smoking medical marijuana on its premises, can prohibit employees from using or consuming cannabis in the workplace, and can prohibit employees from working while under the influence. Rev. Stat. tit. 22, § 2423-E; 10-144-122 Me. Code R. 2.13.2; Me. Rev. Stat. tit. 7, § 2454.

Minnesota. Employers may not discriminate against employees or applicants who hold a medical marijuana card or who test positive for marijuana, unless a failure to discriminate “would violate federal law or cause an employer to lose a monetary or licensing-related benefit under federal law or regulations.” If an employee uses, possesses, or is impaired by medical cannabis on the employer’s premises during work hours, then an employer may take action. Even then, however, employers must allow employees to explain (and present verification of enrollment in the patient registry) before taking any adverse action. Minn. Stat. §§ 152.32, 181.953.

New York. Employers cannot discriminate against certified medical marijuana users. A certified medical marijuana user is deemed to have a disability and employers must reasonably accommodate the underlying disability associated with the legal marijuana use. Employers can, however, enforce their policies prohibiting employees from performing work while under the influence. N.Y. Pub. Health Law § 3369; N.Y. Labor Code § 201-d.

But what about California? California currently permits employers to forbid applicants and employees to use cannabis, regardless of whether it is medically prescribed. We refer you to our fearless prediction, however, that California will soon inhale the winds of change and join those states that protect medical cannabis users against employment discrimination. Two California legislators have proposed a bill that would amend the FEHA to create a new protected category: medical marijuana card holders. The bill would prohibit employers from discriminating against individuals for testing positive for cannabis or for being a qualified patient with an identification card. Continue to monitor this space for further developments.

If you have any questions regarding compliance with cannabis laws, please feel free to contact your favorite Seyfarth cannabis attorney. You can also get further into the weeds on developments in cannabis law at Seyfarth’s marijuana-specific blog: The Blunt Truth.

Seyfarth Synopsis: Even if bad Glassdoor reviews have you feeling like you need to fight back, employers should stay out of the ring, and instead implement social media policies that clearly define prohibited behavior and disclosures, while spelling out the consequences for violations. Employers must not retaliate against employees for their lawful out-of-office behavior.

People are used to sharing everything about their lives—from what they ate for breakfast to the funny name on their Starbucks Frappuccino. But this behavior can be scary for employers when current and former employees take to social media to complain about their jobs—or even defame their boss. Of particular interest are online platforms such as Glassdoor, which purport to provide “inside” information about working conditions, salaries, and company culture.

So what can an employer do when an employee posts a negative comment on Glassdoor about the company? The answer is … not much. The law often protects an employee’s off-duty speech. But the law does not protect defamatory speech, and it does not protect the disclosure of confidential, protected information. So proactive employers can take steps to make sure they are not unfairly smeared online and that their trade secrets are protected. We have a few suggestions in that regard.

What Are You Tryin’ To Prove: Don’t Get In The Ring

Websites such as Glassdoor, which has about 30 million monthly users, allow current and former employees to criticize or praise a company, typically through anonymous posts. Though many such sites screen critiques to prevent the posting of offensive comments and those that would disclose private information, they nonetheless present a conundrum for employers: Do you ignore criticism—even if it’s false—or do you respond to it? The former tactic can permit damage to an employer brand to go unchecked; the latter can make an employer look defensive.

In this new age of information, job applicants search employer review sites for information about companies. Responding to a negative review can help your brand if you do so in a way that shows the organization is genuinely committed to improving. But a response could also provide more fodder for further negativity, so it’s best to try to get ahead of the problem by making changes in-house, if necessary.

If your employees are posting on social media outside of working hours, California’s constitutional right to privacy can protect them from retaliation. Labor Code section 96(k) protects employees where they have engaged in lawful conduct asserting “recognized constitutional rights,” such as free speech postings on social media, occurring during nonworking hours away from the employer’s premises. A better avenue is to get ahead of the problem and educate employees about what they can and can’t post online about the company.

Put Your Robe On—And Implement a Social Media Policy

You can restrict free speech online for current employees with a social media policy (but only up to a point!). Employers should have a social media policy that prohibits posting confidential information about the company (and perhaps about posting anything about the company at all) without permission from the company’s public relations group. Every employee is required to follow the company’s legally compliant policies even if they are stricter than what the law would otherwise allow. If an employee violates your policies, that employee could be subject to employment discipline up to and including termination.

That said, there are limits to the restrictions employers can place on what employees can say about them online. The National Labor Relations Act protects the rights of workers to discuss wages and working conditions with other workers. These protections apply to posts on social media, so your social media policy cannot prevent employees from communicating with other employees online about the company’s pay or working conditions, such as might be the case with a Glassdoor review.

For example, in analyzing one company’s social media policy that forbade employees from making anonymous posts about the company online, the NLRB’s general counsel found that “requiring employees to publicly self-identify in order to participate in protected activity imposes an unwarranted burden on Section 7 rights [of the National Labor Relations Act]. Thus, we found this rule banning anonymous comments unlawfully overbroad.”

You Never Got Me Down—Employers’ One-Two Punch Combo for Dealing with Social Media

  • It is prudent for employers to prepare and implement a social media in the workplace policy in order to avoid risks of disclosure of confidential and proprietary information and claims of cyberbullying, harassment, and discrimination.
  • Social media policies should clearly articulate the legitimate business interests the employer seeks to protect, as well as provide clear definitions of prohibited behavior and private and confidential information, and spell out the consequences for violations of the policy.
  • Employers should use caution when disciplining employees based on social networking activities, as certain union and nonunion employee rights need to be considered.
  • An employer may discipline an employee for posting negative comments on a social networking site if the employee’s comments are offensive or inappropriate, and not related to employment issues, and should do so on a consistent basis.

Workplace Solutions: Employers should open up a dialogue with employees about social media and encourage them to bring grievances to Human Resources, instead of airing their grievances online. Employers should also avoid retaliating against employees for posting on social media outside of work hours, and implement social media policies that clearly articulate the penalties for posting confidential information, and any defamatory statements.

Edited by Coby Turner

Seyfarth Synopsis: Dominating this spring’s planting of proposed employment-related legislation are bills aimed at ending sexual harassment and promoting gender equity. Among the secondary crops are bills regarding accommodation, leave, criminal history, and wage and hour law. It threatens to be another bitter fall harvest for California’s employer community.

California legislators stormed into the second half of the 2017-18 legislative session, introducing over 2,000 bills by the February 16 bill introduction deadline. With Spring upon us, one must ponder what L&E-related bills planted thus far will grow into by the time of the legislative harvest this fall. By that time some will have died on the vine in the summer heat, and some, fully ripened, will go to the Governor. Will the Governor, among the closing acts of his term, approve or reject them?

Meanwhile, the newly planted bills will get a week to rest as legislators head for Spring Break today, March 22. The Legislature reconvenes on April 2 for committee hearings and amendments. June 1 is the deadline for legislation to pass out of its house of origin. Stay tuned for more in-depth analyses of the proposed bills as the session continues.

Sexual Harassment

No fewer than ten bills address the issue of sexual harassment. Some are merely spot bills, while others are more developed. Because you all have day jobs, we have read the bills so you won’t have to. A brief summary of each follows. Contact us if you want to know more. Or even just to vent.

AB 1867 would require employers with 50 or more employees to retain records of all internal employee sexual harassment complaints for ten years, and would allow the Department of Fair Employment and Housing (DFEH) to seek an order compelling non-compliant employers to do so.

SB 1300 would amend the Fair Employment and Housing Act (FEHA) to (1) absolve a plaintiff who alleges that his/her employer failed to take all reasonable steps necessary to prevent discrimination and harassment from occurring from proving that sexual harassment or discrimination actually occurred, (2) prohibit release of claims under FEHA in exchange for a raise or a bonus or as a condition of employment or continued employment, and (3) require employers, regardless of size, to provide two hours of sexual harassment prevention training within 6 months of hire and every two years thereafter to all employees—not just supervisors.

SB 1343, which closely resembles SB 1300, would require employers with five or more employees to provide at least two hours of sexual harassment training to all employees by 2020 and then once every two years thereafter. SB 1343 would also require the DFEH to produce and publish a two-hour video training course that employers may utilize.

SB 224 would extend liability for claims of sexual harassment where a professional relationship exists between a complainant and an elected official, lobbyist, director, or producer. AB 2338 would require talent agencies to provide to employees and artists, and the Labor Commissioner to provide minors and their parents, training and materials on sexual harassment prevention, retaliation, nutrition, reporting resources, and eating disorders.

Assembly Member Gonzalez-Fletcher introduced a package of spot bills (to which substance will later be added) targeting “forced arbitration agreements” and increasing protections for sexual harassment victims. AB 3080 would prohibit (1) requiring employees to agree to mandatory arbitration of any future claims related to sexual harassment, sexual harassment, or sexual assault as a condition of employment and (2) non-disclosure provisions in any settlement agreement. AB 3081 would create a presumption that an employee has been retaliated against if any adverse job action occurs against that employee within 90 days of making a sexual harassment claim, and would extend current sexual harassment training requirements to employers with 25 or more employees. AB 3082 would create a statewide protocol for public agencies to follow when In Home Support Service (IHSS) workers encounter harassment and sexual harassment prevention training for IHSS workers and clients. AB 2079—soon to be named the “Janitor Survivor Empowerment Act”—would enact specific harassment training rules for the janitorial service industry. AB 2079 builds upon AB 1978—the Property Services Workers Protection Act, effective July 1, 2018—which established requirements to combat wage theft and sexual harassment for the janitorial industry.

AB 1761 would require hotels to (1) provide employees with a free “panic button” to call for help when working alone in a guest room, (2) maintain a list of all guests accused of violence or sexual harassment for five years from the date of the accusation and decline service for three years to any guest on that list when the accusation is supported by a sworn statement, and (3) post on the back of each guestroom door a statement that the law protects hotel employees from violent assault and sexual harassment.

SB 1038 would impose personal liability under FEHA on an employee who retaliates by terminating or otherwise discriminating against a person who has filed a complaint or opposed any prohibited practice, regardless of whether the employer knew or should have known of that employee’s conduct. (Personal liability already exists for harassment, but not for retaliation.)

AB 2366 would extend existing law, which already protects employees who take time off work related to their being a victim of domestic violence, sexual assault, and stalking. AB 2366 would also protect employees who take time off because an immediate family member has been such a victim. AB 2366 would also add sexual harassment to the list of reasons for which this protection applies.

AB 2770 addresses the apprehension that harassment complaints and employer responses might trigger defamation suits. AB 2770 creates a “privilege” for complaints of sexual harassment by an employee to an employer based upon credible evidence, for subsequent communications by the employer to “interested persons” and witnesses during an investigation, for statements made to prospective employers as to whether an employee would be rehired, and for determinations that the former employee had engaged in sexual harassment. The California Chamber of Commerce has sponsored this bill.

AB 1870 would extend the time an employee has to file a DFEH administrative claim (including, but not limited to, a sexual harassment claim). The current deadline is one year from the alleged incident. AB 1870 would make it three years! In a similar bill, AB 2946 would extend the time to file a complaint with the DLSE from six months to three years from the date of the violation. This bill would also amend California’s whistleblower provision to authorize a court to award reasonable attorney’s fees to a prevailing plaintiff.

AB 1938 would limit employer inquiries about familial status during the hiring or promotional process. AB 1938 would make it unlawful to make any non-job related inquiry about an individual’s real or perceived responsibility to care for family members.

SB 820, the “Stand Together Against Non-Disclosure” (STAND) Act, would prohibit provisions in settlement agreements entered into on or after January 1, 2019 that require the facts of the case to be kept confidential, except where the claimant requested the provision, in cases involving sexual assault, sexual harassment, and sex discrimination. SB 820 would allow settlement amounts to be kept private. The bill is sponsored by the Consumer Attorneys of California and the California Women’s Law Center.

AB 3109 would void any contract or settlement agreement entered into on or after January 1, 2019 that waives a party’s free speech and petition rights, meaning one that would limit a party’s ability to make any written or oral statement before or in connection with an issue before a legislative, executive, or judicial proceeding, or make any written or oral statement in a place open to the public or a public forum in connection with an issue of public interest. The bill would also prohibit contracts or settlement agreements that restrict a party’s rights to seek employment or reemployment in any lawful occupation or industry.

Pay Equity

SB 1284 is another effort to mandate annual reporting of pay data. It follows last year’s vetoed AB 2019 attempt at a pay data report, though it more closely resembles last year’s failed revised federal EEO-1 report. SB 1284 would require employers with 100 or more employees to report pay data to the Department of Industrial Relations on or before September 30, 2019 and on or before September 30 each year thereafter. The report is to include the number of employees by race, ethnicity, and sex; all levels of officials and managers; professionals; technicians; sales workers; administrative support workers; craft workers; operatives; laborers and helpers; and service workers; and each employee’s total earnings for a 12-month period. Non-compliant employers would be subject to a $500 civil penalty. In contrast, last year’s AB 1209 would have required California employers with 500 or more employees to gather information on pay differences between male and female exempt employees and male and female board members and report the information annually to the Secretary of State for publishing (i.e., public shaming).

Wage/Hour

Pay Statements: SB 1252 would grant employees the right “to receive” a copy (not just inspect) their pay statements. AB 2223 would provide employers the option to provide itemized pay statements on a monthly basis in addition to the currently required semi-monthly basis or at the time wages are paid. Conversely, AB 2613 would impose penalties of $100 for each initial violation plus $100 for each subsequent calendar day, up to seven days, and more than double for subsequent violations, payable to the affected employees, on employers who violate Labor Code provisions requiring payment of wages twice per month on designated paydays, and once per month for exempt employees.

Flexible Work Schedules: AB 2482 would allow non-exempt employees working for private employers and not subject to collective bargaining agreements to request a flexible work schedule to work ten hours per day within a 40-hour workweek without overtime for the 9th and 10th hours, as long as the employee does not work more than 40 hours in the workweek.

Contractor Liability: AB 1565 is an urgency statute that would take effect immediately upon receiving the Governor’s signature. AB 1565 would repeal the express provision that relieved direct contractors for liability for anything other than unpaid wages and fringe or other benefit payments or contributions including interest owed. The law currently extends liability in construction contracts for any debt owed for labor to a wage claimant incurred by any subcontractor acting under, by, or for the direct contractor or the owner.

PAGA: AB 2016 would require that the employee’s required written PAGA notice to the employer include a more in-depth statement of facts, legal contentions, and authorities supporting each allegation, and include an estimate of the number of current and former employees against whom the alleged violations were committed and on whose behalf relief is sought. AB 2016 would also prescribe specified notice procedures if the employee or employee representative seeks relief on behalf of ten or more employees. The bill would exclude health and safety violations from PAGA’s right-to-cure provisions, increase the time the employer has to cure violations from 33 to 65 calendar days, and provide an employee may be awarded civil penalties based only on a violation actually suffered by the employee. (In sum, a valiant effort to provide employers with some modicum of due process in PAGA case, but it doesn’t stand a chance.)

Accommodations

Lactation: AB 1976 would clarify existing law so that employers must make reasonable efforts to provide a room or location for lactation, other than a bathroom. This bill cleared its first hurdle—the Assembly Labor and Employment Committee—by receiving unanimous approval on March 14. SB 937 would require even more: a lactation room must be safe, clean, and free of toxic or hazardous materials, must contain a surface to place a breast pump and personal items, must contain a place to sit, and must have access to electricity. SB 937 would also require employers to develop and implement a new lactation accommodation policy. The policy must describe an employee’s right to a lactation accommodation, how to request an accommodation, the employer’s obligation to provide accommodation, and the employee’s right to file a request with the Labor Commissioner. Employers would be required to respond to an employee’s accommodation request within five days and provide a written response if the request is denied, and maintain accommodation request records for three years. SB 937 would make employers with fewer than five employees eligible for an undue hardship exemption from the room or location requirement. The bill would also charge the DLSE with the responsibility of creating a model lactation policy and request form and making it available to employers on the DLSE website.

Marijuana: About a dozen states now protect medical cannabis users from employment discrimination. California, meanwhile, has permitted employers to enforce policies against the use of cannabis, which remains illegal under federal law. AB 2069 would change that. AB 2069 would prohibit employers from refusing to hire, taking adverse action against, or terminating an employee based on testing positive for cannabis if the employee is a qualified patient with an identification card or their status as one. The bill would permit employers to take corrective action against an employee who is impaired while on the job or on the premises, and would not apply to employers who would lose a monetary or licensing benefit under federal law if they hired or retained such an employee.

Sick & Other Leaves

AB 2841 would increase an employer’s alternate sick leave accrual method from 24 hours by the 120th calendar day of employment to 40 hours (or 5 days) of accrued sick leave or paid time off by the 200th calendar day of employment. But an employee’s total sick leave accrual would not need to exceed 80 hours (or 10 days). An employer would be able to limit the amount sick leave carried over to the following year to 40 hours or 5 days. This increase would apply to IHSS providers beginning January 1, 2026.

AB 2587 would remove an employer’s ability to require an employee to take up to two weeks of earned but unused vacation before the employee receives family temporary disability insurance benefits under the paid family leave program to care for a seriously ill family member or to bond with a minor child within one year of birth or placement during any 12-month period the employee is eligible for these benefits.

Criminal History

Following the state-wide Ban-the-Box law that went into effect on January 1, 2018, AB 2680 would require the California Department of Justice (DOJ) to create a standard consent form that employers must use when requesting that a job applicant consent to a DOJ criminal conviction history background check. Meanwhile, the “Increasing Access to Employment Act,” SB 1298, would limit the criminal history information the DOJ will provide employers to recent misdemeanors and felonies (within five years), and other offenses for which registration as a sex offender is required. The bill would also prohibit the disclosure of any convictions that have been dismissed, exonerations, or arrests that have been sealed.

SB 1412 would allow employers to inquire into a job applicant’s particular conviction, regardless of whether that conviction has been judicially dismissed or sealed, under these specified conditions: (1) the employer is required by state or federal law to obtain information about the particular conviction, (2) the job applicant would carry or use a firearm as part of the employment, (3) the job applicant with that particular conviction would be ineligible to hold the position sought, or (4) the employer is prohibited from hiring an applicant who has that particular conviction.

AB 2647 would prohibit evidence of a current or former employee’s criminal history from being admitted, under specified circumstances, in a civil action based on the current or former employee’s conduct against an employer, an employer’s agents, or an employer’s employees.

In a category all its own, yet still notable:

SB 954 would require an attorney representing a party in mediation to inform the client of the confidentiality restrictions related to mediation and obtain informed written consent that the client understands these restrictions before the client participates in the mediation or mediation consultation.

Workplace Solutions.

Don’t fret yet! Spring has only just sprung, and these bills all have a lot of growing to do (with some pruning for improvement?). Stay tuned … . We’re keeping our eyes and ears glued on the Capitol.

Seyfarth Synopsis: With a single utterance at the recent Academy Awards ceremony, “inclusion rider” entered the popular lexicon. That has led many to wonder, “What is an inclusion rider?” The next question, of course, is this: “Is an inclusion rider enforceable?”

What is an inclusion rider? In most respects, this is an entertainment industry term for the more commonly known NFL Rooney Rule. The Rooney Rule requires league teams to interview minority candidates for head coaching and senior football operation jobs—the intent being to create equal opportunity. When we think of “riders” relating to the entertainment industry, what most often comes to mind are musicians’ riders: requirements that particular food and beverages be present backstage (e.g., X cases of a particular beer, Y bottles of a particular champagne, and Z sandwiches from a particular shop). An inclusion rider is a provision in an actor’s contract that requires the producer to hire members of historically underrepresented groups (e.g., people of color, women, the LGBTQ community). The idea is that high-powered actors can demand that both the cast and those working “below the line” (the crew) demographically reflect our society.

Some thus envision inclusion riders as providing specific hiring quotas. Frances McDormand (who introduced “inclusion rider” to the world after winning the Oscar for Best Actress in “Three Billboards Outside Ebbing, Missouri”) elaborated on her proposal during an Oscar after-party: “You can ask for or demand at least 50% diversity in the casting and the crew.”

But would this kind of inclusion rider be enforceable? In 2009, in Ricci v. DeStefano, the U.S. Supreme Court concluded that “before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action.” In other words, hiring quotas are permissible only if an employer needs the quota to avoid being accused of having facially neutral hiring practices that have an unintended disproportionate impact on a particular (protected) demographic segment of the population.

Demanding that an employer hire at specified diversity levels would almost certainly fly in the face of Ricci, and an employer would accommodate such a rider at its legal peril.

While a specific hiring quota might be unenforceable, the same is likely not true of an inclusion rider that more closely mirrors the Rooney Rule. If an inclusion rider merely requires that a producer interview for cast and crew in a way that reflects the available talent—or even, more broadly, societal demographics—the rider would be unlikely to face the same legal challenges as a hiring quota. Query whether something in between, such as stated aspirational goals (but not mandates) for diverse hiring, would pass muster.

So what does this mean for employers? McDormand’s acceptance speech—referring to a concept involving employment negotiations in the entertainment industry—can inspire conversations about hiring in every industry. When a prospective employer is evaluating a demand for an “inclusion rider,” the employer must keep Ricci’s instruction in mind: is the demand that the employer impose a hiring quota, or is the demand that the employer intentionally expand interviewing and employment opportunities for diverse candidates? While the latter approach can be defensible, the proverbial curtain will almost surely drop on the former practice as soon as it begins.

Seyfarth Synopsis: A proposed bill would amend California employment discrimination law to protect medical marijuana users.

California—already famous (or infamous) as a sanctuary in the immigration area—could soon become a sanctuary for medical marijuana users. A proposed bill would protect medical marijuana users from employment discrimination.

Currently, California employers can deny employment to users of marijuana, even if the use is to treat a medical condition. As previously reported, in Ross v. Ragingwire, the California Supreme Court need not accommodate medicinal marijuana use, irrespective of the Compassionate Use Act of 1996. Ross reasoned that since the California Fair Employment and Housing Act (FEHA) does not require employers to accommodate illegal drug use, the employer could lawfully deny employment to individuals using medical marijuana, which remains illegal under federal law.

The Adult Use of Marijuana Act (passed in 2016) codifies this employer prerogative: employers may “maintain a drug and alcohol free workplace.” Health & Safety Code § 11362.45(f).

Now, however, two California legislators have introduced AB 2069, a bill that would amend the FEHA to create a new protected category: marijuana card holders (i.e., medical marijuana users). AB 2069 would “prohibit an employer from engaging in employment discrimination against a person on the basis of his or her status as, or positive drug test for cannabis by, a qualified patient or person with an identification card.” AB 2069 would permit employers to take corrective actions against employees who are impaired on employer premises because of marijuana use. AB 2069 also would permit employers to deny employment “if hiring the individual or failing to discharge the employee would cause the employer to lose a monetary or licensing-related benefit under federal law or regulations.”

AB 2069, if enacted, would alter the legal landscape. Employers would need to change their drug testing policies and modify how they treat applicants and employees testing positive for marijuana use. AB 2069 would not, however, protect recreational marijuana users. California employers thus could still enforce drug testing policies against those who use marijuana for non-medicinal purposes.

The new legislation would raise further issues. One would be whether use of medical marijuana could be a reasonable accommodation under disability discrimination laws. Another is whether California’s new law would be preempted by the Controlled Substances Act (“CSA”). The CSA still classifies marijuana as a Schedule I drug—having no recognized medical value and being subject to criminal prosecution regardless of whether state law authorizes its cultivation, distribution, and use. Courts have differed on the preemptive fate of medical marijuana laws. In a 2016 New Mexico case, for example (Garcia v. Tractor Supply Co.), a federal district court held that the CSA preempted a state marijuana law: “To affirmatively require Tractor Supply to accommodate Mr. Garcia’s illegal drug use would mandate Tractor Supply to permit the very conduct the CSA proscribes.” In a 2017 Connecticut case, however, a federal district court held (in Noffsinger v. SSC Niantic Operating Co.) that a statute similar in form to AB 2069 was not preempted by the CSA, because the CSA does not specifically regulate the employment relationship.

Seyfarth Synopsis: The California Legislature has introduced a new bipartisan bill, AB 1870, that would give all employees—not just those claiming sexual harassment—three years to file DFEH complaints of unlawful discrimination, instead of the one year provided by current law.

More time to report discrimination

With the #MeToo movement sweeping the nation, California legislators are introducing bills aimed at giving sexual harassment-claimants more legal protection.

One measure, AB 1870, would give workers two more years to file complaints with the DFEH.

Currently, California workers subjected to harassment or discrimination have one year to file a claim with the DFEH, the state agency that enforces the FEHA. Filing a DFEH claim is a prerequisite to filing a lawsuit under the FEHA. If employees fail to file a timely DFEH complaint, then (unless some exception applies), their lawsuit can be dismissed as time-barred.

On January 18, 2018, however, a bipartisan group—Assemblywomen Eloise Reyes, Laura Friedman, and Marie Waldron—introduced Bill 1870: the SHARE Act (Stopping Harassment and Reporting Extension). The SHARE Act would triple the time complainants have to file DFEH harassment or discrimination claims. The deadline would now be three years, instead of one, from the date on which the last discriminatory act occurred. Reyes stated that “AB 1870 will allow victims the time they need to seek justice and protect due process so that every Californian has equal access to recourse.” Waldron added, “[e]xtending the time victims can report ensures they are supported and empowered to speak out when they feel comfortable—violators should not be able to avoid accountability simply because a claim is not filed within 12 months.”

What does this mean for employers? Although AB 1870 aims to protect victims of sexual harassment, the bill would have a far more expansive effect: it would give workers three years to file all types of harassment and discrimination claims—not just sexual harassment claims. The bill would not, however, enlarge the remedies available to workers alleging discrimination. Nor would the bill allow for recovery of additional damages. The chief impact on employers would be an even heavier burden to record and retain the documents needed to mitigate the loss of memory that occurs over long periods of time.

#WeSaidEnough—Other Bills for Employers to Watch

Assemblywoman Reyes introduced not only AB 1870, but also AB 1867, which would require employers with 50 or more employees to maintain records of sexual harassment complaints for 10 years from the date of filing.

SB 1300, a bill introduced by Hannah-Beth Jackson, would bolster training requirements regarding workplace harassment. SB 1300 would also allow plaintiffs to claim that a defendant failed to take all reasonable steps necessary to prevent discrimination and harassment from occurring, even without proving actual sexual harassment or discrimination.

Additionally, SB 1300 would require any employer, regardless of how many employees it has, to provide sexual harassment training to all employees in California within six months of their hire and once every two years. The FEHA currently requires only that employers with 50 or more employees provide supervisory employees with this training. Moreover, SB 1300 would require an employer to provide “bystander intervention” training, reflecting the idea that both men and women can interrupt behaviors to prevent harassment. Finally, SB 1300 would require an employer to tell employees how to report harassment and how to contact the DFEH to make a complaint.

#CaliforniaWorkplaceSolutions

California employers must be committed now more than ever to stopping all forms of harassment in the workplace. Make sure you review your employee handbooks for detailed workplace policies regarding harassment and all forms of discrimination. California employers should also be sure to implement comprehensive procedures for reporting harassment and prepare policies outlining those complaint procedures.

Please contact your favorite Seyfarth attorney to ensure that you have robust policies in place regarding discrimination and harassment in the workplace and procedures to effectively respond to complaints of discrimination.

Edited By: Coby Turner