California at Work: New Labor Laws for 2018

*Originally published by CalCPA in the January/February 2018 issue of California CPA — the original article can be found here.

You may not have expected that the California Legislature in 2017 designated an official state dinosaur (Augustynolophus morrisi) and four state nuts (almond, pecan, walnut and pistachio), which are technically seeds, but that’s a separate article. Less surprising is that employer regulation and employee rights continue to expand in our state, the sixth-largest economy of the world. The rate of expansion, however, seems to have taken another pendulum swing: 304 bills introduced in 2017 mention “employer,” compared to 569 bills in 2016 and 224 in 2015. Most of those bills did not pass, and of the ones that did, most were not signed into law by Gov. Brown. Essential elements of several bills that became law affecting private employers, effective Jan. 1, 2018, unless noted otherwise, follow.

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How Can Employers Respond to Increased Risks of Well-Funded Harassment Litigation Stemming from the #MeToo Movement?

Cheryl Orr and Phil Lebel wrote an article for Risk & Compliance magazine titled “How Can Employers Respond to Increased Risks of Well-Funded Harassment Litigation Stemming from the #MeToo Movement?” They discuss the recent uptick in sexual harassment allegations in the wake of the #MeToo campaign, which began following allegations against producer Harvey Weinstein in October 2017.

Cheryl and Phil highlight litigation finance and funding firms that have invited individuals who believe they have been victims of sexual harassment in the workplace to share their stories, seek legal representation, and, in some cases, receive “angel” litigation funding. They state that “[i]f this is, in fact, the beginning of a groundswell of harassment claims, the impact to employers could be tremendous. An increase in sexual harassment claims…could mean rising litigation expenses. Moreover, in the current social and political climate, verdicts could be increasingly unpredictable as juries attempt to ‘correct’ larger social problems by punishing employers who are found liable.” The article also notes that lawmakers in several jurisdictions are facing voter pressure to address the perceived shortcomings in the current legal framework, as applied to sexual harassment cases.

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Amid Continuing Sexual Misconduct Scandals, Legislators Target NDAs and Confidentiality Agreements

As allegations of sexual misconduct continue to surface almost daily against high-profile individuals, some legislators have responded by proposing legislation curtailing the use of non-disclosure (NDA) and confidentiality agreements. Critics have opined that such agreements (particularly as used by Harvey Weinstein) have enabled victimizers to conceal and continue long-running patterns of sexual misconduct, in that they prevented discussion of the accusations among both the victims and others, such as co-workers, who knew of the victimization.

In October, California State Senator Connie Leyva announced that she would introduce “legislation to ban secret settlements (confidentiality provisions in settlement agreements) in sexual assault, sexual harassment and sex discrimination cases” when the California Senate reconvenes in early January 2018. On November 15, Pennsylvania State Senator Judy Schwank stated in a press conference that she would introduce a bill that prospectively bans contractual provisions “prohibit[ing] a person from revealing the identity of a person who committed sexual misconduct” and voids any such provisions entered into under duress or incapacity, or by a minor, prior to the law’s enactment.

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Key New California Laws for 2018: What Employers Should Know

Governor Jerry Brown signed several laws in 2017 that will impact California employers next year. A summary of some of the key new laws follows, in numerical order by Assembly Bill (AB) and/or Senate Bill (SB). All of the laws outlined below are effective beginning January 1, 2018.

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Could A Litigation Finance Initiative Capitalize On #MeToo?

Since early October 2017, when the allegations against film producer Harvey Weinstein first surfaced in The New York Times and The New Yorker, there has been a steady stream of allegations of sexual harassment against high-profile individuals in the media, entertainment and political industries. Now, a Bay Area startup backed by Peter Thiel is looking to take advantage of a potential new wave of sexual harassment lawsuits.

On November 8, 2017, San Francisco-based litigation finance firm Legalist, Inc. launched a new initiative dubbed #MeToo Tales (“M2T”). According to its website, M2T is “a collaboration between Legalist and community organizers working to help victims of sexual harassment get justice.” M2T invites individuals who believe that they have been victims of sexual harassment in the workplace to share their stories confidentially on the initiative’s website or via a toll-free hotline. Legalist offers to pair claimants with its partner law firms and, for “eligible” individuals, to provide “angel” litigation funding of up to $100,000. Legalist recoups its funding by taking a portion of the proceeds from any successful litigation or settlement.

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Part IX of “The Restricting Covenant” Series: Tolling and Technicians

This year’s Halloween festivities, my recent binge watching of “Stranger Things 2,” and Harry Potter’s invisibility cloak, inspired the topic of this ninth article in “The Restricting Covenant” Series, which discusses tolling provisions in non-compete agreements and restrictive covenant cases. Specifically, can a tolling provision provide judicial relief to an employer if its former employee hid under the cover of darkness and concealed violations during the restricted period? What relief do employers have in this situation?

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