Recap at Summer Break Shows Mixed Results

A review of action on major legislation for business before the Legislature began its summer recess last week shows both good and disappointing outcomes for the employer community.

On the plus side was the passage of California Chamber of Commerce-supported job creator education and film tax credit bills as part of the state budget package (see June 29 Alert), as well as a CalChamber-sponsored job creator that enables businesses to avoid hiring repeat sexual harassment offenders.

In addition, strong opposition from the CalChamber and its coalitions of business/industry groups and local chambers of commerce helped stop several job killer bills or provided pressure to secure amendments removing the more onerous provisions of job killers and other CalChamber-opposed proposals.

Still, a number of employment-related job killers continue to move in the Legislature and a costly privacy bill increasing business liability was signed into law and requires clean-up amendments (see story here).

Many positive and negative proposals will face critical hearings in the fiscal committees of both the Senate and Assembly when legislators return from their summer break in August.

Protection from Serial Harassers

Governor Edmund G. Brown Jr. signed on July 9 a CalChamber-sponsored job creator bill that protects sexual harassment victims and employers from being sued for defamation.

AB 2770 (Irwin; D-Thousand Oaks) codifies case law to ensure victims of sexual harassment and employers are not sued for defamation by the alleged harasser when a complaint of sexual harassment is made and the employer conducts its internal investigation. This bill also provides additional protections to employers by expressly allowing employers to inform potential employers about the sexual harassment investigation and findings. The bill has been tagged as a job creator because reducing the cost of frivolous litigation allows an employer to utilize these financial resources to grow its workforce.

AB 2770 passed the Legislature with unanimous bipartisan support.

CalChamber sponsored AB 2770 because alleged harassers are not only suing victims, but also filing suit against employers for defamation. Such lawsuits put employers in an impossible position as they have an affirmative duty to take reasonable steps to prevent and promptly correct harassment.

Even worse, if the alleged harasser’s employment is then terminated, or the alleged harasser resigns, employers are put in an even more difficult position. The company has knowledge of the harassing activity and yet its hands are tied. If the company tells a potential employer that the employee was accused of harassing conduct, the company is on the hook for a defamation claim. If the company stays silent, the harasser is then free to victimize more individuals at his/her next job without anyone at the new company ever knowing about the unacceptable behavior.

AB 2770 will protect employers and allow them to warn potential employers about an individual’s harassing conduct during a reference check without the threat of a defamation lawsuit.

Status Update

For more information on the many bills the CalChamber is tracking on behalf of members and the business community, see the Status Update Report.