Raft of Sexual Harassment Laws Puts Pressure on Employers

California Gov. Jerry Brown has signed into law a number of bills that will drastically change the landscape for employers trying to resolve sexual harassment and discrimination claims.

Brown signed three bills that will make it easier for workers to bring claims of harassment and discrimination in the workplace, and curtail the ability of employers to resolve the claims with motions for summary judgment.

They will also prohibit non-disclosure agreements, and will expand the number of employers that will be required to provide anti-sexual-harassment training to their staff.

Any organization with employees needs to be aware of the new laws to avoid any future legal quagmires, as failing to comply with some of these laws could drastically increase an employer’s liability.

Here’s a rundown of what you need to know:

SB 1343

Existing law requires that organizations with 50 or more employees provide two hours of sexual-harassment prevention training to supervisors every two years. This was mandated two years ago under another piece of legislation, AB 1825.

The new law expands this training requirement to all employers in California with five or more employees.

But SB 1343 goes beyond requiring only supervisors to be trained by also requiring that it must be provided to all employees every two years.

SB 820

This law takes effect Jan. 1, 2019 and will bar California employers from entering into settlement agreements that prevent the disclosure of information regarding:

  • Acts of sexual assault;
  • Acts of sexual harassment;
  • Acts of workplace sexual harassment;
  • Acts of workplace sex discrimination;
  • The failure to prevent acts of workplace sexual harassment or sex discrimination; and
  • Retaliation against a person for reporting sexual harassment or sex discrimination.

The big issue employers will need to watch out for, according to experts, is that the new law could actually keep the employer and employee from reaching resolutions for disputes.

SB 1300

This new law bars other nondisclosure agreements related to claims of sexual harassment, and also overturns prior court rulings that have limited harassment lawsuits.

SB 1300 bars employers from requiring an employee to sign a release of a Fair Employment and Housing Act claim or signing a non-disparagement or nondisclosure agreement related to unlawful acts in the workplace, including sexual harassment in exchange for a raise or bonus, or as a condition of employment or continued employment.

One good thing, the prohibition does not apply a “negotiated settlement agreement to resolve an underlying claim under [FEHA].”

The new law will also make it more difficult to collect attorneys’ fees and costs. Now they will only be granted if the court finds that the action was “frivolous, unreasonable, or totally without foundation when brought or the plaintiff continued to litigate after it clearly became so.”

SB 1300 also expands current law under which an employer can be held responsible for sexual harassment committed by non-employees like clients, vendors and other third parties, if the employer knew or should have known of the conduct and failed to take immediate and appropriate corrective action.

Now employers can be held responsible for all forms of unlawful harassment committed by non-employees, not just sexual harassment.

The law also includes an unusual section on “legislative intent,” which is language that was designed as guidance for the courts but is not legally binding. It includes:

  • Single incident grounds for a claim – The new law declares that a “single incident of harassing conduct is sufficient to create a triable issue regarding the existence of a hostile work environment.”
  • Stray remarks doctrine – Even a single discriminatory remark, even if not made directly in the context of an employment decision or uttered by a non-decision-maker, may be relevant and circumstantial evidence of discrimination.
  • Summary judgments – Harassment claims are “rarely appropriate for summary judgment.” According to the law, summary judgment is a motion usually filed by the defendant to have the case thrown out before trial.

Conducting Legal Background Checks

With the number of harassment, discrimination and other employee lawsuits growing, besides examining their internal policies, employers need to be careful about who they hire.

Apart from calling previous employers and schools and checking for any lawsuits with the courts, many businesses will also consider using a vendor to do a background check and to look at an applicant’s social media posts.

The key to staying on the right side of the law is following the Fair Credit Reporting Act (FCRA). Despite its name, the law covers more than just credit checks. It governs how an employer or a third party entity gathers background information and what it can access. It established requirements for:

  • Notice
  • Consent
  • Steps required before taking an adverse action based on information from the background check (like rescinding an offer).
  • Using out-of-state agencies to pull court records.

 

Follow the law

The Federal Trade Commission, which regulates the FCRA, outlines the rules employers must follow on its website.

Here are the basics:

  1. Always notify the employee or applicant that you plan to conduct a background check. Use a notification form with the singular purpose of notifying applicants that you plan to conduct a background check and need their consent.
  2. Get written permission from the applicant or employee. This can be part of the document you use to notify the person that you will get a consumer report. If you want the authorization to allow you to get consumer reports throughout the person’s employment, make sure you say so clearly and conspicuously.
  3. If you are using a third party to conduct the background check, certify that they comply with the FCRA.
  4. Before you reject a job application, reassign or terminate an employee, deny a promotion, or take any other adverse employment action based on information in a consumer report, you must give them:
  • A notice that includes a copy of the consumer report you relied on to make your decision; and
  • A copy of “A Summary of Your Rights under the Fair Credit Reporting Act,” which the company that gave you the report should have provided to you.

Give the applicant or employee the notice in advance so they have the opportunity to review the report and tell you if it is correct.

 

Checking social media

Several US states have social media laws in place that restrict employers from asking job applicants or existing employees from sharing their login credentials or private information. But hiring managers and recruiters are free to check the information and photos of anyone which is available in the public domain.

If you do plan to check an applicant’s social media:

  • Know what you are looking for and why the information would be relevant to your hiring decision. Remember, there are laws against considering a person’s gender, race, national origin, sexual orientation, age, disability or religion when making hiring decisions. Social media may reveal all that information.
  • Is the information relevant to the hiring decision? You may find social media posts that are distasteful, and you might think based on that you would never hire the person. But you may not know the whole story behind a post.
  • Is the information reliable? While you can glean some important information about somebody on their public profiles, it can also likely be a very unreliable process. Social media sources may contain false, doctored and biased information, and posts can easily be forged. People can also alter pictures using Photoshop and other editing software.
  • Give a candidate the chance to explain or dispute any information you find.

 

 

 

Addressing Workplace Bullying Can Head off Lawsuits

While poor employment practices, harassment and discrimination are coming to the forefront in the U.S., one workplace liability that organizations should not overlook is bullying.

Social media trends have shined the spotlight on a variety of ways people are treated poorly, but the bullying focus has mostly been on schools and not workplaces, which can be breeding grounds for bullying as well. And workplace bullying can lead to lawsuits against your organization, in addition to possible workers’ comp claims.

There has been a bit of an epiphany recently that many employment practices lawsuits concerning stress in the workplace, psychiatric injury, harassment and other issues have their root in bullying by someone in the workplace – often a superior.

Bullying has been present in workplaces for as long as they have existed, and for the most part it has just been swept under the rug. This is especially true for sales people and management with production goals hanging over their heads. Many people are browbeaten by superiors, but the question is: When does leaning on an employee to perform cross the line and become bullying?

 

Bullying statistics

  • 19% of workers have been victims of workplace bullying.
  • 61% of the perpetrators are described as a boss or supervisor.
  • 65% of the workers who reported being bullied also said they had lost their jobs.
  • 37% of workers said their workplace bullying experiences were covered up by others in the workplace.

 

Source: Workplace Bullying Institute survey (2017)

 

Seven essential elements of workplace bullying

  • Repeated behavior
  • Inappropriate behavior
  • Direct or indirect behavior
  • Verbal, physical or otherwise
  • Conducted by one or more persons
  • Takes place at the workplace in the course of employment
  • Capable of being reasonably regarded as undermining a person’s dignity.

 

Source: Johan Lubbe, partner at law firm Jackson Lewis LLP

Bullies in the workplace appear to be gender neutral. Women account for 58% of workplace bullies, according to the Workplace Bullying and Trauma Institute.

That said, women are the primary targets, according to the WBTI. Women bullies choose female targets 87% of the time, and male targets only 13%. Men bullies choose female targets 71% of the time, and male targets 29%.

 

Workers’ comp ramifications

Workplace bullying can lead to stress and, if it becomes debilitating, a worker can file a workplace stress injury claim. This is mostly the case in California, but workers’ comp stress claims are becoming more common throughout the country.

More and more jurisdictions are accepting stress as a valid workers’ comp claim, particularly if it leaves someone unable to work because of their nerves.

 

Employment practices liability

Employers should address workplace bullying before it is too late, because it can create liability issues when left unaddressed.

Employers should pay attention to company culture, watch out for cliques that may make newer employees feel unwelcome, and resist making allowances for the companies’ best performers if they are accused of bullying, according to experts.

If you have an employment practices liability policy, coverage for bullying claims may already be covered. But EPLI is very fact-specific and the facts of each case determine a lot on the coverage provided.

Workplace bullying might fall under wrongful acts or workplace harassment. Another area where coverage could be triggered is accusations of “infliction of emotional distress.”

While bullying is not currently covered by any laws, there have been efforts in state legislatures to get laws on the books making workplace bullying an actionable offense.

 

Businesses Pay Record Amounts for Lawsuits over Employee Treatment

Employers are paying out more for legal settlements and judgments for cases brought by employees over how they are being treated.

According to the employment law firm of Seyfarth Shaw LLP, settlements for the 10 biggest class-action suits brought by employees grew an astounding 55% to $2.72 billion in 2017 from $1.75 billion the year prior.

The trend in employee class actions reflects a similar trend of individual actions, which should be a wake-up call for employers to review their human resources policies and practices.

These cases include claims for:

  • Wage-and-hour violations (such as insufficient pay, failure to pay overtime, etc.)
  • Employee bias (such as discrimination against protected classes)
  • Underfunded pension plans
  • Harassment
  • Independent contractor vs. employee disagreements

It’s unlikely that the aggregate record settlement amount in 2017 – the highest Seyfarth Shaw has recorded since it started keeping track in 2003 – may constitute a trend as many of the actions were government enforcement lawsuits against employers brought by the Obama administration. The business-friendly Trump administration delivers on promises of less government intervention and reduced federal enforcement efforts.

But the law firm predicted that 2018 could be still be significant in light of the #MeToo movement after numerous allegations of sexual harassment have sunk the careers of high-profile businessmen, actors and politicians. Lawyers expect more rank-and-file workers, emboldened by the news reports, to file lawsuits against their employers alleging sexual harassment by superiors.

Also, in a bit of pushback against the Trump administration’s policies, a number of state attorneys general have been taking a more aggressive stance on workplace issues and they could pick up part of the slack.

The fallout

The stakes are high for employers. Employee-initiated lawsuits can drag on for years and can be expensive even if the employer wins the case.

Legal fees can easily reach into the hundreds of thousands of dollars and sympathetic juries can punish a company with large awards. Combined, legal fees and awards or settlements can sink a small business by crimping its cash flow and causing irreparable damage.

As an employer, you should review your policies on harassment and discrimination, your pay practices and how you are classifying employees and independent contractors.

You should consider:

  • Whether you have a strong anti-harassment and discrimination policy in place, and if you have a solid reporting mechanism for workers who feel they have been harassed or discriminated against. The process should be confidential and you should take all complaints seriously and investigate them.  Whatever you do, don’t retaliate against an employee who has filed a complaint, as that could lead to a retaliation lawsuit being filed against your business.
  • Reviewing your pay policies to make sure that you are accurately accounting for overtime pay, holiday pay and that you are not paying one class of worker more than another for the same work if they have similar experience and position.
  • Reviewing how you are classifying independent contractors to make sure you are not running afoul of the law. The IRS is still taking a serious view of misclassification, and you also run the risk of being sued by someone who feels they should be classified and paid as an employee if you are classifying them as an independent contractor.
  • Taking out an employment practices liability insurance policy. These policies cover legal fees associated with the above actions, investigation costs, and judgments and settlements. An EPLI policy could be your company’s lifeline for protecting your assets should your firm be sued.