Latham & Watkins Litigation Department

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1 Number 419 November 11, 2004 Client Alert Latham & Watkins Litigation Department Despite existing legislation and legal obligations designed to prevent and remedy sexual harassment in the workplace, California has recently passed further legislation that mandates sexual harassment prevention training for supervisory employees. California Mandates Sexual Harassment Prevention Training Despite existing legislation and legal obligations designed to prevent and remedy sexual harassment in the workplace, California has recently passed further legislation, AB 1825, that mandates sexual harassment prevention training for supervisory employees. In general, AB 1825 requires employers with 50 or more employees to give their supervising employees at least two hours of sexual harassment training before January 1, 2006, and to repeat that training at least once every two years thereafter. Existing Law and Obligations Under both California and federal law, employers may be liable for the sexual harassment (or other types of discrimination) of employees by their supervisors. Such liability may be found irrespective of whether the harassment resulted in an employment action (such as demotion or termination) or simply contributed to a hostile work environment; both are possible grounds for a sexual harassment claim. To avoid liability in either circumstance, most prudent employers have by now adopted a written sexual harassment policy, and ensured that the policy has been effectively communicated to all employees. Moreover, employers must fashion a complaint procedure, which will effectively encourage and investigate discrimination or harassment claims. Significantly, employers are obligated to enforce an effective remedy when appropriate; failure to do so may result in liability. 1 Employers should also guarantee that their employees are aware of the California prohibition against retaliation. An employee cannot be subject to adverse employment actions 2 for opposing a discriminatory practice, or because the employee has filed a complaint, testified, assisted or participated in any manner in an investigation, proceeding, or hearing conducted by the relevant state agencies. 3 Finally, many vigilant employers, in conjunction with the above guidelines, already offer all employees, not just supervisors, some degree of training and education on preventing sexual harassment and other forms of discrimination. Such training could potentially avoid claims by demonstrating to employees that their employer maintains an appropriate work environment. Moreover, an employer that takes all possible measures to prevent discrimination and harassment, which would include training and education programs, may have a defense to harassment claims if litigation did arise. Latham & Watkins operates as a limited liability partnership worldwide with an affiliate in the United Kingdom and Italy, where the practice is conducted through an affiliated multinational partnership. Copyright 2004 Latham & Watkins. All Rights Reserved.

2 AB 1825 Despite these existing obligations, and the already strong incentives to prevent sexual harassment in the workplace, California enacted AB This new law amends the Fair Employment and Housing Act (FEHA), which also contains other legal requirements that employers must follow to be in compliance with sexual harassment prevention laws. At the end of September, Governor Schwarzenegger signed the legislation, which will be codified as Section of California s Government Code. Harassment prevention training, which was before a prevalent, and prudent, course of action, is now mandatory. Who Must Comply? AB 1825 only directs employers with 50 or more employees to provide antiharassment training. Notably, the legislation does not require, on its face, all these employees to be located in California. Therefore, employers with 50 or more employees, only some of whom are located in California, would still be wise to provide the two hours of training to their supervisors. Additionally, AB 1825 contains a broad definition of employer for the purposes of counting 50 employees. A qualifying employer can be an entity regularly receiving the services of 50 or more persons providing services pursuant to a contract, or any person acting as an agent of an employer, directly or indirectly, the state, or any political or civil subdivision of the state, and cities. Therefore, the law includes independent contractors, temporary employees, and others for the purpose of counting 50 employees. Who Must be Trained and Educated? As perhaps some consolation, only supervisory employees must be given the compulsory harassment prevention training. Although AB 1825 does not define supervisor, the FEHA does offer such a definition, and the new law presumably incorporates that expansive language. According to Section 12926(r) of the FEHA, a supervisor is any individual having the authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or the responsibility to direct them, or to adjust their grievances, or effectively to recommend that action, if, in connection with the foregoing, the exercise of that authority is not of a merely routine or clerical nature, but requires the use of independent judgment. 4 Because of this broad definition of supervisor, an employer must provide training to employees who possess supervisory responsibilities but not the title of supervisor. Additionally, an employer must remember to track employees who have been promoted or transferred to supervisory roles. When Must Employers Comply? As mentioned above, employers subject to AB 1825 must provide sexual harassment prevention training before January 1, This requirement applies to all supervisors who are employed as of July 1, However, if a supervisory employee has received satisfactory training after January 1, 2003, that employee need not be retrained. For all new or promoted supervisors employed after July 1, 2005, employers must provide the requisite sexual harassment training within six months of the supervisory employee s start in that position. After 2006, all supervisors must again undergo sexual harassment training once every two years. What Type of Training is Required? Not all training will satisfy the requirements of AB AB 1825 mandates classroom or other effective 2 Number 419 November 11, 2004

3 interactive training and education regarding sexual harassment. A live, in-person classroom setting is, therefore, sufficient. Because the training must be interactive, a passive video course would be unacceptable. However, interactive on-line presentations may provide some flexibility to implement a satisfactory but efficient training curriculum. AB 1825, for better or worse, does not specifically describe the required training and education. The law calls for training to include information and practical guidance regarding the federal and state statutory provisions concerning the prohibition against and the prevention and correction of sexual harassment and the remedies available to victims of sexual harassment in employment. Additionally, AB 1825 compels the use of practical examples in the training program. Who Can Provide the Sexual Harassment Prevention Training? AB 1825 states that the training must be performed by trainers or educators with knowledge and expertise in the prevention of harassment, discrimination, and retaliation. Again, a lack of specifics provides some difficulties. For example, it is unclear exactly how much knowledge and expertise is required. Likewise, can an in-house human resources manager perform the training, or must the employer look externally to employment lawyers and human resources consultants? Or, is the reverse true? The statute requires expertise in the prevention of harassment and discrimination. Is practical experience required, so that the training must be done by someone whose background includes more than just consulting or advising? The statute is unclear. What Happens if Training is Not Provided? Although the terms of AB 1825 only require that the Fair Employment and Housing Commission (FEHC) issue an order requiring the employer to comply with these requirements, employers should take its requirements as both mandatory and serious. While an employer s compliance with [AB 1825] does not insulate the employer from liability for sexual harassment of any current or former employee or applicant, the failure to comply with a statutorily imposed training regimen will, as a practical matter, be viewed as a significant failure by both judges and juries and will likely make the employer appear indifferent to a hostile workplace. Furthermore, Section 12940(k) of the FEHA directs employers to take all reasonable steps necessary to prevent discrimination and harassment from occurring. Failure to comply with AB 1825 is evidence that an employer did not in fact perform all reasonable steps towards prevention. Likewise, compliance may be meaningless without adequate records to prove who attended which training session. Finally, in federal Title VII harassment cases, the United States Supreme Court has recognized, in certain contexts, an affirmative defense for a supervisor s harassment if an employer can demonstrate that it exercised reasonable care to prevent and correct promptly any sexually harassing behavior and that the plaintiff employee failed to take advantage of preventive or corrective opportunities. 5 In a state FEHA claim against a supervisor, there is no analogous defense (as there is strict liability for a supervisor s harassment), but damages may be reduced if an employer can show, among other items, that it took reasonable steps to prevent the harassment. 6 Because of the potential consequences of a failure to comply with AB 1825, employers have compelling incentives to provide the required training. In addition, AB 1825 makes it clear that the new law is merely a minimum 3 Number 419 November 11, 2004

4 threshold, and strongly suggests additional training and education. Employers should, in fact, provide some degree of training for all employees, not just supervisors. For non-supervisor employees, efficiency may demand, and the law allows, less extensive training. A video course, or less frequent courses, would be possibilities. Since supervisory employees must now undergo training for sexual harassment, employers should take that opportunity to also provide some training and education on the other various forms of discrimination. Although AB 1825 only addresses sexual harassment, an employer must still be wary of liability that arises from comparable conduct. What Should Employers Do to Comply With the FEHA? AB 1825 simply amends the FEHA and does not supersede existing obligations designed to combat sexual harassment in the workplace. The passage of AB 1825 does nothing to alter these existing responsibilities. A compliance review should consider all legal obligations. For example, Section 12950(a) of the FEHA requires employers to post an anti-discrimination poster in a prominent and accessible location in the workplace. 7 The Department of Fair Employment and Housing (DFEH) distributes this poster to employers upon request, and all employers should ensure that they have the appropriate poster properly displayed. Additionally, Section 12950(b) of FEHA requires employers to obtain from the DFEH an information sheet, which should then be disseminated to all employees. As an alternative, an employer may create its own information sheet, which must contain particular information. 8 Employers should verify that they are in compliance with the current FEHA requirements, and begin the implementation of the compulsory training program. By spring, employers should adopt a record-keeping system to track supervisory employees and identify who must undergo training. Employers should also begin thinking about who they will have as an instructor, and what form of training they will utilize. Conclusion California law has again become more onerous, and the compliance obligation has again become more burdensome, for California s employers. Companies should review their internal sexual harassment prevention training and procedures to make sure they meet the new requirement of AB 1825 and existing obligations. The Employment Law Group at Latham & Watkins is available to assist you. 4 Number 419 November 11, 2004

5 Endnotes 1 Fuller v. City of Oakland, 47 F.3d 1522, (9th Cir. 1995). 2 An employer cannot demote, suspend, reduce, fail to hire or consider for hire, fail to give equal consideration in making employment decisions, fail to treat impartially in the context of any recommendations for subsequent employment which the employer or other covered entity may make, adversely affect working conditions or otherwise deny any employment benefit to an individual in retaliation. 2 Cal. Code Regs. tit. 2, (2004). 3 Id. 4 Cal. Gov t. Code 12926(r) (Deering 2004). 5 Burlington Indus. v. Ellerth, 524 U.S. 742, 765 (1998); Faragher v. City of Boca Raton, 524 U.S. 775, 807 (1998). 6 See State Dept. of Health Servs. v. Super. Ct., 31 Cal. 4th 1026, 1044 (2003). 7 Cal. Gov t Code 12950(a) (Deering 2004). 8 Such information includes: the illegality of sexual harassment; the definition of sexual harassment under applicable state and federal law; a description of sexual harassment, utilizing examples; the internal complaint process of the employer available to the employee; the legal remedies and complaint process available through the DFEH and the FEHC; directions on how to contact the DFEH and the FEHC; and a description of the protection against retaliation for opposing any discrimination or harassment or for filing a complaint with, or otherwise participating in an investigation, proceeding, or hearing conducted by the DFEH or the FEHC. Cal. Gov t Code 12950(b). 5 Number 419 November 11, 2004

6 Office locations: Boston Brussels Chicago Frankfurt Hamburg Hong Kong London Los Angeles Milan Moscow New Jersey New York Northern Virginia Orange County Paris San Diego San Francisco Silicon Valley Singapore Tokyo Washington, D.C. Client Alert is published by Latham & Watkins as a news reporting service to clients and other friends. The information contained in this publication should not be construed as legal advice. Should further analysis or explanation of the subject matter be required, please contact the attorneys listed below or the attorney whom you normally consult. A complete list of our Client Alerts can be found on our Web site at If you have any questions about this Client Alert, please contact Mark S. Pulliam in our San Diego office or any of the following attorneys. Boston David A. Gordon Brussels Marc Hansen +32 (0) Chicago John P. Lynch Kevin A. Russell Kenneth G. Schuler Frankfurt/Hamburg Stefan Lunk Hong Kong Mitchell D. Stocks London Marc Hansen Los Angeles Lisa A. Von Eschen Joel E. Krischer Marcus A. McDaniel Milan Michael S. Immordino Moscow Anya Goldin New Jersey James E. Tyrrell New York Terrence J. Connolly John J. Kirby, Jr. Catherine E. Palmer Orange County Joseph B. Farrell Paris John P. Lynch Laurent Szuskin +33 (0) San Diego Mark S. Pulliam San Francisco Linda M. Inscoe Silicon Valley Charles S. Crompton Singapore Mark A. Nelson Tokyo David L. Shapiro Washington, D.C. Eric L. Bernthal Number 419 November 11, 2004