Laborsphere

Tyson Foods Ruling Opens the Door for Use of Statistical Averaging in Wage and Hour Class Actions

Last week, in Tyson Foods, Inc. v. Bouaphakeo et al., No. 14-1146, the United States Supreme Court ruled that class certification was appropriate in a wage and hour class and collective action, despite the lack of individualized evidence for the amount of uncompensated time worked by each class member. The Court instead allowed the employees to use a statistical expert who conducted representative time studies to determine the average number of minutes that the employees spent on pre-shift and post-shift activities. The Court rejected Tyson’s arguments against the use of representative sample averaging, including Tyson’s reliance on Wal-Mart Stores. Inc. v. Dukes, 564 U.S. 338 (2011), which denied certification in a nationwide Title VII class because liability and damages would require individualized proof.

Plaintiff employees in Tyson worked at Tyson Foods, Inc.’s (“Tyson”) pork-processing facility in Storm Lake, Iowa, in the “kill,” “cut,” and “retrim” departments. In the course of their duties, they were required to wear protective gear, the composition of which varied with the tasks that each worker performed on any given day. During the applicable class period, Tyson paid some employees for donning and doffing activities, but did not compensate others at all. Tyson did not record the amount of time that each employee spent donning and doffing.

Arguing that the time that they spent donning and doffing protective gear was an integral part of their hazardous work, Tyson employees filed a lawsuit in the United States District Court for the Northern District of Iowa (“District Court”). In their complaint, plaintiffs alleged that Tyson’s failure to compensate them for donning and doffing resulted in the denial of overtime compensation under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 207(a), and the Iowa Wage Payment Collection Law, Iowa Code § 91A.3. Plaintiffs sought certification of their Iowa wage claims as a class action under Rule 23 of the Federal Rules of Civil Procedure (“Rule 23”), and of their FLSA claim as a “collective action” under 29 U.S.C. § 216.

To certify a class action under FRCP Rule 23, the trial court must find that “questions of law or fact common to class members predominate over questions affecting individual members.” The most significant issue in Tyson was whether the time spent donning and doffing protective gear was compensable work under the FLSA; a question common to the entire class. However, in order to recover damages, a second important question was whether each employee could prove the amount of time spent donning and doffing their equipment and whether that time constituted overtime work in any work week.

In opposition to plaintiffs’ class certification motion, Tyson contended that, because of the variance in protective gear that each employee wore, the employees’ claims were not sufficiently similar to be resolved on a class-wide basis. The District Court rejected that position and concluded that there were common questions susceptible to class-wide resolution, including (1) whether the donning and doffing of protective gear could be considered work under the FLSA; (2) whether such work was integral and indispensable to the plaintiff employees’ work; and (3) if compensable, whether such work was de minimis. The District Court accordingly certified a Rule 23 class of 3,344 employees with respect to plaintiffs’ claims under Iowa law, and a class of 444 opt-ins under the FLSA.

At trial, to establish Tyson’s liability for overtime, each employee was required to show that he or she worked more than 40 hours each week, inclusive of time spent donning and doffing. Because no records of time spent donning and doffing existed, however, plaintiffs relied on a study performed by an industrial relations expert, who conducted 744 videotaped observations, recorded the amount of time that various donning and doffing activities took, and calculated an average for each department. The data from this statistical sampling yielded an average of 18 minutes a day for the cut and retrim departments and 21.25 minutes for the kill department.

Relying on this data, plaintiffs furnished another expert who estimated the amount of uncompensated time worked by each employee by adding the average donning and doffing time to the compensable/recorded time reflected in plaintiffs’ existing time records. Using this methodology, plaintiffs’ expert estimated that 212 employees did not meet the 40-hour threshold and could not recover damages for unpaid overtime; the remaining class members, however, had potentially been uncompensated to some degree.

Crucially, Tyson failed to challenge the validity of the statistical sampling and analyses prepared by plaintiffs’ experts in a hearing under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and made no effort to rebut the evidence with an expert of its own. Instead, echoing its arguments in opposition to class certification, Tyson argued to the jury that the variable amount of time that it took employees to don and doff different varieties of protective equipment made the lawsuit “too speculative for class-wide recovery.” Ultimately, although the calculations of plaintiffs’ experts supported an aggregate award of $6.7 million dollars, the jury returned a verdict of only $2.9 million in damages for unpaid wages. A subsequent ruling on liquidated damages upped the total award to $5.8 million.

Relying on Wal-Mart v. Dukes and other authority, on appeal, Tyson strenuously argued that the amount of time spent donning and doffing protective gear varied from person to person and required individualized inquiries, thus rendering class treatment improper. Rejecting this argument, the Court ruled that Wal-Mart did not stand for the broad proposition that a representative sample is an impermissible means of establishing class-wide liability. Wal-Mart involved, in part, a claim that supervisors misused their discretion in hiring and promoting female employees. The employees could not point to a common policy and instead proposed using a “sample set of selected class members” to determine both liability and damages for the entire class. The Court rejected the Wal-Mart plaintiffs’ proposed methodology as “trial by formula.”

By contrast, the Tyson Court noted there was a common policy with respect to liability, and the time study could be introduced in each individual claim to determine that employee’s overall hours for the week. The Court further noted that, unlike Wal-Mart, the Tyson employees all worked in the same facility, did similar work, and were paid under the same policy. The Court also was influenced by the principle that Tyson’s failure to keep records should not be used against the employees. In this respect, the Court relied heavily on its opinion in Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 686-688 (1946), to hold that so long as “each class member could have relied on the sample to establish liability if he or she had brought an individual class action, . . . that sample [could serve] as a permissible means of establishing the employees’ hours” on a class-wide basis. Tyson, slip op. at 11.

Takeaways

Tyson does not necessarily erode the holding of Wal-Mart because, as the Court was careful to note, the two cases are so factually and legally different. However, in Title VII employment discrimination class actions, the courts may be open to smaller class actions involving employees who work in the same facility, perform similar tasks, or are supervised by common management.

Tyson’s ramifications for wage and hour class actions are far greater. The Tyson method of proving damages could be applied to other “off the clock” wage and hour class actions, such as pre-shift and post-shift administrative or maintenance work, missed lunch and meal breaks, security checks, or travel between job sites.

Finally, the Court assumed, without deciding, that the standards for certifying an FLSA collective action and a Rule 23 class action are the same. This may be significant because the relative sizes of the classes are different, with the FLSA collective action usually being much smaller. Several federal circuit courts of appeal have held that the standards for certifying an FLSA collective action and a Rule 23 class action are not the same. The Court may be forecasting that it will have to decide this issue in the future.

For further information about this alert, please contact the authors above or any member of our Labor and Employment Practice Group.

Get the Most Out of Your Employee Payroll Audit

Employee payroll audits, which have long been recommended as a best practice for corporations that want to stay on the right side of the law, have become even more critical with the current proliferation of labor and employment laws at the state level. Among other things, the California Fair Pay Act, which went into effect on January 1, 2016, places new demands on California employers that in many cases can only be effectively satisfied by means that include a payroll audit.

Earlier this month, we held a webinar to discuss the CA Fair Pay Act requirements and what employees should do to comply. Below you will find some of the key takeaways.

What is the California Fair Pay Act?

The new law goes further and imposes more obligations on employers than longstanding federal and state equal-pay and employment-discrimination laws. More than simply requiring employers to pay men and women equal pay for the same work, the California statute prohibits employers from paying members of one sex less than the rates paid to employees of the opposite sex “for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” And the employees of opposite sexes whose jobs and pay are being compared need not work together in the same establishment. There are several important defenses to liability under the law, such as the employer’s use of a bona fide factor that is not sex-related.

How can a payroll audit help?

Determining what types of work are “substantially similar” in terms of skill, effort, responsibility and working conditions is no easy task. That’s where a payroll audit can help.

On a step-by-step basis, a properly conducted audit will identify potential problems under the California Fair Pay Act by identifying positions that have “substantially similar work,” analyzing the pay of these workers by gender, finding any disparities in pay, and determining whether any defenses apply. For example, does the company have a bona fide seniority system or merit system, or is there a business necessity for the disparities in pay?

In addition to these complex Fair Pay Act questions, employee payroll audits remain desirable or necessary for other purposes, such as ensuring that employees are treated fairly under the company’s employee benefit plan and that certain employees or groups of employees are not excluded from the plan.

What steps should be taken?

When conducting a payroll audit, it should be done with review and consultation of attorney with the end goal of identifying and quickly addressing disparities that cannot be explained adequately or need to be corrected. It is important to note that the audit is subject to attorney/client privilege and/or work product protection. The following are key steps in the audit process:

Consider all job titles/descriptions across all geographic regions
Consider how to identify or sort based on disparate geographical locations
Compare the positions that have “substantially similar work”
Determine if the statutory exemptions apply
Identify explanations for disparities
Address disparities that can’t be explained
Determine what action needs to be taken

Ongoing Compliance

From a compliance perspective, the number one benefit to conducting employee payroll audits is the ability to determine what action needs to be taken to address and correct disparities if they exist. Failure to address disparities that can’t be explained within the requirements of the California Fair Pay Act or the Federal Pay Act can result in penalties, sanctions and, in some cases, litigation with the DOL and/or IRS. Ongoing compliance should include regular review of the following:

Handbooks and policies to remove outdated references to “equal” work
Policies that prevent employees from discussing or asking about other employees’ compensation
How compensation decisions are made and adjust if necessary
Job descriptions – update and describe as comprehensive as possible
Record keeping – records must be kept for three years
Training of HR personnel, senior management on the new law and how it should be applied in setting compensation at hiring

Click here to watch the full presentation.

Click here to view a PDF of the presentation.

California Employers: New Poster to be Posted April 1, 2016

Did you recently update your workplace posters? Time to do it again.

In California, all employers have obligations to satisfy workplace posting, such as posting information related to wages, hours and working conditions. The workplace posters must be placed in an area frequented by employees where these posters may be easily read during the workday.

As a result of new amended regulations pertaining to the California Fair Employment and Housing Act (“FEHA”) going into effect on April 1, 2016, certain covered employers must post a new poster on April 1, 2016. Employers with 5 or more employees (full-time or part-time) are covered by the FEHA and must post a specific notice, which replaces Pregnancy Disability Leave (“PDL”) Notice A. This new poster, titled “Your Rights and Obligations as a Pregnant Employee,” provides clarifications of the PDL, including, but not limited to, the following:

Eligible employees are entitled up to four months of leave per pregnancy, and not per year;
The four months means the working days the employee would normally work in one-third of a year or 17 1/3 weeks; and
PDL does not need to be taken all at once, but can be taken on an as-needed basis as required by the employee’s health care provider.

For a copy of this poster, click here.

Under the California Code of Regulations, “[a]ny FEHA-covered employer whose work force at any facility or establishment is comprised of 10% or more persons whose spoken language is not English shall translate the notice into every language that is spoken by at least 10 percent of the workforce.” The Spanish version of the foregoing notice should be available soon at http://www.dfeh.ca.gov/Publications_Publications.htm.

Any time employers are required to update their posters and/or new (or amended) regulations are issued, employers should take the opportunity to ensure their workplace posters and their employee handbooks and policies are up to date and compliant.

For further information, please contact the author or any member of our Labor and Employment Practice Group.

Courts in New Jersey Continue to Endorse “Awkward Theory” of Individual Liability in NJLAD Cases

Referred to by some courts as an “awkward theory” of liability, employers and supervisors should be aware that courts in New Jersey continue to recognize the viability of individual liability claims under the “aiding and abetting” provision of the New Jersey Law Against Discrimination, N.J.S.A. §10:5-12(e).

Personal Liability for Supervisors: Title VII vs. NJLAD

Unlike Title VII of the federal Civil Rights Act, which does not provide for individual employee liability, New Jersey courts have held that in addition to “employers” being liable under NJLAD, supervisors can be personally liable for their illegal conduct under an “aiding and abetting” theory. The New Jersey Supreme Court recently clarified the expansive definition of “supervisor” for purposes of the NJLAD as an employee who is (1) authorized to undertake tangible employment decisions affecting the plaintiff, or (2) authorized by the employer to direct the plaintiff’s day-to-day work activities. Aguas v. New Jersey, 220 N.J. 494, 529 (2015).

To hold a supervisor liable as an “aider and abetter” under the NJLAD, a plaintiff must show that the individual (1) performed a wrongful act that caused an injury; (2) was generally aware of his or her role as part of an overall illegal activity at the time that he or she provided the assistance; and (3) knowingly and substantially assisted in the principal violation. Tarr v. Ciasulli, 181 N.J. 70, 83084 (2004). Aiding and abetting requires “active and purposeful conduct.” Cicchetti v. Morris County Sheriff’s Office, 194 N.J. 563, 595 (2008).

What Makes this Aiding and Abetting Theory so “Awkward”?

Courts applying New Jersey law have yet to follow a uniform rule in situations where the plaintiff alleges that a supervisor aided and abetted the “employer” in violating the NJLAD based on the supervisor’s own conduct (i.e., as the sole actor engaged in the wrongful conduct). In other words, what happens when the supervisor is the only person alleged to have engaged in the wrongful conduct? Two distinct lines of cases have developed in this area of the law – one finding supervisory employees can be personally liable for aiding and abetting their own/the employer’s wrongful conduct (e.g., Hurley v. Atlantic City Police Dep’t, 174 F.3d 95 (3d Cir. 1999), and another refusing to impose individual liability (e.g., Newsome v. Admin. Office of the Courts of N.J., 103 F. Supp. 2d 807 (D.N.J. 2000). See Aiding and Abetting Your Own Conduct, New Jersey Law Journal, Volume 209 (July 16, 2012), Employment Counselor, Number 241 (Sept. 2010).

A string of recent decisions by New Jersey state and federal courts suggest that this “awkward” theory is here to stay. For example, in Yobe v. Renaissance Electric, Inc., 2016 WL 614425 (D.N.J. Feb. 16, 2016), the court denied a motion to dismiss the plaintiff’s NJLAD disability retaliation claims against his former supervisor, who was the only person alleged to have engaged in the retaliatory conduct. The defendant argued that the plaintiff’s claim failed as a matter of law because a supervisor cannot “aid and abet” his own conduct. Citing to the Third Circuit’s “prediction” in Hurley that the New Jersey Supreme Court would hold a supervisor personally liable under NJLAD, and an unpublished, non-precedential decision by the New Jersey Appellate Division in Rowan v. Hartford Plaza Ltd., 2013 WL 1350095 (App. Div. April. 5, 2013), the court in Yobe concluded that “[w]hile it is concededly an ‘awkward theory’ to hold an individual liable for aiding and abetting his own conduct, it would thwart the NJLAD’s broad and remedial purpose, and make little sense, to construe it as permitting ‘individual liability for a supervisor who encourages or facilitates another employee’s harassing conduct, while precluding individual liability for the supervisor based on his or her own discriminatory or harassing conduct.’”

Impact on Employers and Individual Supervisors

In discrimination, hostile work environment and retaliation cases brought under the NJLAD, it is common for a plaintiff to name his or her former supervisor as an individual defendant, particularly if the supervisor is the person who made the decision to take an adverse employment action against the plaintiff. Naming the supervisor, particularly a high-level manager, might be viewed by the plaintiff as a tactical move to encourage an early settlement by driving a wedge between the employer’s interest in defending its business decision and the supervisor’s reputational or financial impact concerns. Absent a showing of fraudulent joinder, a plaintiff’s naming of his or her supervisor as a defendant might prevent the employer from removing the action to federal court based on complete diversity of citizenship. In addition, legal fees could increase if separate legal representation for the employer and the supervisor is required. These important issues should be considered and discussed with counsel at the outset of the case. Because the NJLAD does not provide for individual liability for aiding and abetting if the employer is not found liable, the best defense is a unified one between the employer and the individual supervisor.

The NLRB Rules That Chipotle’s Handbook Policies Violated the NLRA

As we have previously covered here, here and here, the NLRB has opined that various common handbook provisions are unlawful under the NLRA because they may have the effect of inhibiting employees from engaging in protected activities, such as discussing wages, criticizing management, publicly communicating about working conditions and discussing unionization.

Last week, an NLRB judge provided further guidance in this area in ruling in Chipotle Services LLC and Pennsylvania Worker’s Organizing Committee (Nos. 04-CA-1437314; 04-CA-149551) that Chipotle violated the NLRA by maintaining unlawful policies, improperly forcing an employee to delete social media posts critical of Chipotle, and terminating the employee for his attempts to have his co-workers sign a petition protesting Chipotle’s alleged denial of work breaks.

The last part of the ruling was not entirely surprising – the facts strongly indicated that Chipotle terminated the employee because of, and shortly after, his attempts to have his co-workers sign the petition. However, in finding unlawful various Chipotle policies related to confidentiality, social media, solicitation, ethical communications, and political activities, the decision highlights the difficulties employers face in crafting policies that balance the competing interests of an employee’s right to engage in concerted activity and, among other interests, an employer’s need to protect its confidential information and brand. Some of the policies which the NLRB held were unlawful included:

• A social media policy that prohibited “false” and “misleading” social media posts, on the basis that “an employer may not prohibit employee postings that are merely false or misleading . . . it must be shown that the employee had a malicious motive,” as well as the provision of the policy prohibiting the disclosure of “confidential” information, where the term “confidential” was vague and undefined;
• A policy prohibiting “improper use” of Chipotle’s name or trademarks, on the basis that “employees would reasonably interpret any non-work-related use of [Chipotle’s] name to be improper”;
• An “ethical communication” policy that “prohibit[ed] exaggeration, guesswork and derogatory characterizations of people and their motives,” on the basis that it could be read to prohibit criticism of managerial decisions.

The decision reiterates the NLRB’s previous guidance that broad or vague rules relating to (or not carefully defining) concepts such as “civility,” “respect,” “disparagement” and “confidential information” will be found unlawful because some employees may read them to prohibit protected activity, even where (as here) the policies also contain a disclaimer that they do “not restrict any activity that is protected or restricted the NLRA . . .”

Finally, it should be noted that the policies at issue in the case were, in fact, outdated versions, with Chipotle having replaced them with new versions at the time of the events at issue. The judge found this fact irrelevant, as the Chipotle supervisors (for reasons unclear) relied upon the prior versions of the policies in counseling the employee and ultimately terminating him. Employers, therefore, should take care to properly distribute new policies to staff and counsel them on their application, lest they lose the benefits of any remedial policy updates.

Spring Cleaning in California: The Fair Employment and Housing Council’s New Regulations

On April 1, 2016, the California Fair Employment and Housing Council’s (FEHC) new Fair Employment and Housing Act (FEHA) regulations take effect. The overarching purpose of the new FEHC regulations is to harmonize the regulations with recent court decisions. However, employers should take note of some of the more significant changes the new regulations impose, including: (a) expanding and clarifying the scope of employers covered under the FEHA; (b) requiring employers to develop specific, detailed anti-discrimination/anti-harassment policies and internal procedures; and (c) enlarging employers’ training and related recordkeeping obligations. Notably, the new regulations also clarify employers’ potential liability for claims regarding alleged failure to prevent unlawful harassment or discrimination, as well as the remedies available.

More Employers Are Covered

The FEHA only covers employers who regularly employ five or more persons. See Cal. Gov’t Code § 12926(d). Under the prior regulations, to “regularly employ” five or more individuals meant that the employer employed five or more individuals in each working day in any 20 consecutive calendar weeks in the current or preceding calendar year. The new regulations further clarify that, in determining whether an employer regularly employs five or more individuals, consideration must be given to out-of-state employees. Thus, under the new regulations, an employer who employs only three employees in California is still an “employer” for purposes of the FEHA if it employs two or more employees outside of California (see footnote 1). The new regulations further clarify that, in counting the number of employees, individuals on leaves of absence or suspensions are counted.

Expanded Anti-Harassment, Anti-Discrimination, And Anti-Retaliation Policy And Procedure Requirements

Under the FEHA, employers have an affirmative obligation to prevent unlawful harassment and/or discrimination. To that end, pursuant to California Government Code Section 12950(b), employers are (and have been) required to distribute the DFEH’s brochure (DFEH-185) on unlawful sexual harassment, or provide the information in a comparable writing. However, the FEHC’s new regulations mandate that, in addition to the preexisting obligation with respect to providing the DFEH’s brochure (or comparable information), employers must now promulgate their own anti-discrimination and anti-harassment policies that satisfy a variety of detailed requirements.

Specifically, under the new regulations, employers’ anti-discrimination/anti-harassment policies must:

• Be in writing;
• List all current protected categories covered under the FEHA;
• Indicate that the FEHA prohibits coworkers and third parties, as well as supervisors and managers, with whom the employee comes into contact from engaging in conduct prohibited by the FEHA;
• Create a complaint process to ensure that complaints receive:
- -An employer’s designation of confidentiality, to the extent possible;
- -A timely response;
- -Impartial and timely investigations by qualified personnel;
- -Documentation and tracking for reasonable progress;
- -Appropriate options for remedial actions and resolutions; and
- -Timely closures.
•Provide a complaint mechanism that does not require an employee to complain directly to his or her immediate supervisor, including, but not limited to the following:
- -Direct communication, either orally or in writing, with a designated company representative, such as a HR manager, EEO officer, or other supervisor;
- -A complaint hotline;
- -Access to an ombudsperson; and/or
- -Identification of the Department of Fair Employment and Housing (DFEH) and the U.S. Equal Employment Opportunity Commission as additional avenues for employees to lodge complaints.
•Instruct supervisors to report any complaints of misconduct to a designated company representative, so that the company can try to resolve the claim internally (see footnote 2);
•Indicate that when an employer receives complaints, it will conduct a fair, timely, and thorough investigation that provides all parties appropriate due process and reaches reasonable conclusions based on the evidence collected;
•State that confidentiality will be kept by the employer to the extent possible, but not indicate that the investigation will be completely confidential;
•Indicate that if, at the end of the investigation, misconduct is found, appropriate remedial actions will be taken; and
•Make clear that employees shall not be exposed to retaliation as a result of lodging a complaint or participating in any workplace investigation.

Under the new FEHC regulations, employers must disseminate their policies by one or more of the following methods:

Providing printed copies of the policies to all employees with an acknowledgment for employees to sign and return;
Sending the policies via email with an acknowledgment return form;
Posting current versions of the policies on a company intranet with a tracking system to ensure that all employees have read and acknowledged receipt of the policies;
Discussing the policies upon hire and/or during new employee orientation/training; and/or
“Any other way that ensures employees receive and understand the policies.”

In addition to providing the policies in English, any employer whose workforce contains 10 percent or more of persons who speak a language other than English must translate their policies into any language(s) spoken by 10 percent or more of their workforce.

Updated Training And Related Recordkeeping Requirements

Pursuant to section 12950.1 of the California Government Code, employers with 50 or more employees have been and are required to provide supervisory employees with a minimum of two hours of sexual harassment training. Pursuant to the new FEHC regulations, in addition to satisfying the existing statutory requirements, the mandatory training must also:

•Instruct supervisory employees of their obligation to report potential sexual harassment, discrimination, and/or retaliation of which they become aware;
•Provide an overview of the remedies available for sexual harassment victims in civil actions, as well as potential employer/individual exposure and liability; and
•Cover “abusive conduct,” as used in Government Code section 12950.1 (see footnote 3), in a “meaningful manner,” including by: (a) providing a definition of abusive conduct; (b) explaining the negative effects of abusive conduct on the victim and others in the workplace; (c) specifically discussing the elements of abusive conduct; (d) providing examples of abusive conduct; and (e) emphasizing that, unless the conduct is especially severe or egregious, a single act shall not constitute abusive conduct.

In addition to the above updated training requirements, the new FEHC regulations require employers to maintain training-related records for at least two years. Records to be maintained include, but are not limited to: (a) the names of the participants; (b) the dates of the trainings; (c) sign-in sheets; (d) copies of all certificates of attendance or completion; (e) information regarding the type of training; (f) copies of all written or recorded materials comprising the trainings; and (g) the name of the training provider.

Clarifying Liability For Failure To Prevent Unlawful Discrimination Or Harassment

Recent case law confirmed that California employers cannot be held liable in a civil action for a stand-alone claim for failure to take reasonable steps necessary to prevent sexual harassment or discrimination if there is no underlying unlawful harassment or discrimination. The new FEHC regulations codify that authority and take it further in several respects:

•First, the regulations clarify that, in undertaking the individualized assessment of whether an employer failed to take all reasonable steps to prevent unlawful discrimination or harassment, consideration should be given to a variety of factors, including, but not limited to: (a) the size of the employer’s workforce; (b) the employer’s budget; (c) the nature of the employer’s business; and (d) the facts of each particular case.
•Second, the regulations provide that the DFEH may independently seek non-monetary preventative remedies for an employer’s failure to take all reasonable measures to properly prevent harassment or discrimination even if there is no underlying liability for discrimination, harassment, or retaliation.

Take Aways

California employers (and any out-of-state employers with at least five employees total and one employee in California) should promptly review and revise their anti-discrimination and anti-harassment policies. In conjunction with that effort, employers should ensure that their procedures with respect to disseminating policies and handling employee complaints satisfy the new requirements. Employers with 50 or more employees should ensure that their sexual harassment trainings encompass the additional topics and should begin retaining all records relating to such trainings for at least two years. For assistance with ensuring compliance, employers should seek advice from qualified California employment counsel.

______________________________

While such out-of-state employees are counted in determining whether an employer falls under the FEHA’s ambit, the new FEHC regulations clarify that out-of-state employees “are not themselves covered by the protections of the … FEHA if the wrongful conduct did not occur in California and …was not ratified by decision makers or participants located in California.”
For employers with 50 or more employees, mandatory sexual harassment training must also instruct supervisors to report any complaints of misconduct to a designated company representative.
See California AB 2053, effective January 1, 2015.