New California Employment Law Increases Risk of Retaliation Claims, by Katherine Catlos, Esq.

California employers may find themselves faced with more retaliation claims in the New Year with the enactment of the Equal Pay and Anti-Retaliation and Protection Act. Effective Jan. 1, SB 497 creates a rebuttable presumption of retaliation in favor of the employee’s claim if an employer takes any “adverse action” against an employee within 90 days of the employee engaging in certain protected activity such as submitting complaints.  Examples of adverse action include termination, suspension and demotion.

Creating a rebuttable presumption of retaliation will lessen the burden for employees to establish a prima facie claim of retaliation, which is required to establish a retaliation claim. Under current law, there are three stages to a retaliation claim: the plaintiff/employee must establish a prima facie (at first sight) case of retaliation; if they succeed in doing so, the employer must identify a legitimate, nonretaliatory reason for their act or acts; and then the burden shifts back to the employee, who must prove that the employer’s nonretaliatory reason was pretextual, according to an analysis of the law by the Assembly Committee on Judiciary. Currently, to establish a prima facie case, an employee must demonstrate: they engaged in a protected activity; the employer disciplined them or otherwise engaged in an adverse action against them; and, there was a causal nexus (connection) between the protected activity and the adverse employment action.

The new law helps alleviate the employee’s initial burden of establishing a prima facie case of retaliation if an adverse employment action occurs within 90 days of the employee engaging in a protected activity.

Key Provisions of the Law

According to the Assembly Committee on Judiciary, the law:

• Establishes a rebuttable presumption in favor of an employee’s retaliation claim if an employer engages in any disciplinary behavior, as specified, within 90 days of an employee’s engagement in protected activity.
• Directs recovery of civil penalties awarded to an employee who was retaliated against for specified whistleblower activities.
• Establishes a rebuttable presumption in favor of an employee’s retaliation claim if an employer engages in any disciplinary behavior, as specified, within 90 days of an employee’s efforts to enforce their rights under the Equal Pay Act.

Civil Remedies

This bill also states that in addition to other remedies, an employer is liable for a civil penalty not exceeding $10,000 per employee for each violation of this provision, to be awarded to the employee who was retaliated against. The bill would require the Labor Commissioner, in assessing this penalty, to consider the nature and seriousness of the violation based on the evidence obtained during the course of the investigation, as prescribed.

Employers Proactive Steps

With the pending new law, employers should consider the following steps:

• Pay attention to timing of terminations or otherwise adverse employment actions; did the employee complain of any wrongful conduct within the past 90 days;
• Ensure there is solid evidence supporting a termination or adverse employment action, especially if the employer will terminate or otherwise discipline an employee within 90 days of the purported complaint; an “at will” defense is insufficient;
• Review/update policies regarding documenting employee performance issues and disciplinary actions;
• Re-evaluate policies on managing workplace complaints;
• Train HR on the importance of proper documentation;
• Re-examine policies on managing workplace complaints and handling disciplinary actions; and,
• Review and update employee handbooks if necessary.

Kaufman Dolowich Can Help

If your company needs assistance complying with the pending new law and/or reviewing workplace policies, practices or procedures, Kaufman Dolowich’s team of skilled labor and employment attorneys can help.