On October 10th California Governor, Gavin Newsome signed bills AB9 and AB51 – both to increase protections for workers. Both bills were inspired by and are direct responses to the #MeToo movement.
Bill AB51 prohibits employers from conditioning employment on acceptance of a mandatory arbitration agreement and retaliating against employees who choose not to sign a mandatory arbitration agreement. In line with the Supreme Court’s position that arbitration agreements are enforceable, the bill will not invalidate written arbitration agreements, post-dispute settlement agreements, or severance agreements. In other words, any arbitration agreement entered in knowingly and voluntarily between and employer and employee will still be fully enforced.
The #MeToo movement highlighted the damaging effects of forced arbitration and catalyzed California to act on the issue. Instead of pursuing claims of sexual harassment publicly, many women who came forward were forced into private arbitration because of employment agreements containing a forced arbitration clause. California joins New York and Washington in efforts to restrict the use of forced arbitration by employers in direct response to #MeToo and the advancement of women’s rights.
Employers who employ workers in California (or New York or Washington) will need to be mindful moving forward of how their employment contracts are drafted and when an arbitration clause is lawful and properly accepted by an employee. This is an opportunity for employers to re-assess their hiring practices and the suite of documents that make up their employment agreements.
AB9: Stop Harassment and Reporting Extension Act (“SHARE Act”)
Like AB51, the SHARE Act is acknowledged as a direct response to the #MeToo movement and the clear need for better worker protections where harassment claims are at issue. The Share Act increases the amount of time employees have to bring a claim for harassment, discrimination, or civil rights-related retaliation under the California Fair Employment and Housing Act from one year to three years. The SHARE Act will not revive lapsed claims but will extend the statute of limitation for unexpired claims and future claims.
The extended statute of limitations may be especially impactful for workers who don’t know that harassment claims are time-limited and/or cannot afford the risk of losing their jobs by pursuing a claim. Extending the statute of limitations by two years provides runway for these workers to find other work and establish economic security before pursuing a claim against their employer. Ideally, the extended statute of limitation will mean that employees won’t have to choose between justice and economic security.
In light of these developments, employers would be well served by updating employee handbooks, reviewing and revising employment agreements, and considering hosting an employee training advising employees of the changes and how their rights are affected.