A Midsummer Night’s Dream? Not So Much, For California Employers: Two New Employee-Friendly Bills Are Signed by Governor Brown

Even in the summer months, the California legislature is busy changing the laws that affect the state’s employers. This summer, California’s governor signed into law two bills that should be of interest to all employers—one amending the definition of sexual harassment under the Fair Employment and Housing Act (“FEHA”) and the other amending a provision of the California Labor relating to the award of attorneys‘ fees and costs in actions for the non-payment of wages.

SB 292, signed into law on August 12, 2013, amends the FEHA, California Government Section 12940, to specify that “[s]exually harassing conduct need not be motivated by sexual desire.” This amendment, which will go into effect January 1, 2014, effectively overrules Kelley v. The Conco Companies, 196 Cal. App. 4th 191, 206 (2011), where a court of appeal reversed the trial court’s grant of summary judgment for the employee on the ground that the employee’s sexual harassment claim was not supported by evidence of “actual sexual desire or intent.” Specifically, the court found that there was no evidence that the same-sex harasser’s graphic, vulgar, and sexually explicit language was an expression of actual sexual desire because there was no evidence that the harasser was homosexual, nor had the employee contended that the statements were intended to be taken literally. Id. at 205. The amendment clearly seeks to avoid the imposition of such a sexual desire requirement on future plaintiffs.

SB 462, which was signed into law on August 26, 2013, amends Section 218.5 of the California Labor Code to prevent an employer from recovering attorneys’ fees and costs if it successfully defeats an employee’s claim for unpaid wages. Section 218.5 currently provides that a court must award reasonable attorneys’ fees and costs to the prevailing party in an action for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions, if any party requests such fees and costs upon the initiation of the action. On its face Section 218.5 thus makes attorneys’ fees and costs available to both employees and employers, and the California Supreme Court seemed to adopt this reading of the statute in Kirby v. Immoos Fire Protection, Inc., 53 Cal. 4th 1244, 1259 (2012). In Kirby, the court reversed the award of fees and costs to the employer on the ground that Section 218.5 did not apply because meal and rest break claims are not claims for the non-payment of wages, thus leaving open the possibility that prevailing employers are entitled to recover fees and costs under Section 218.5. See id. at 1255-59. The amendment all but eliminates this possibility, by adding that “if the prevailing party in the court action is not an employee, attorney’s fees and costs shall be awarded pursuant to this section only if the court finds that the employee brought the court action in bad faith.” This added requirement of a bad faith showing will undoubtedly make it much more difficult for employers to recover attorneys’ fees and costs in actions for the non-payment of wages.