Just last week, Gov. Gavin Newsom signed several bills into law, the most relevant to California employers and employees being Senate Bill 497, aka the Equal Pay and Anti-Retaliation Act. The Act includes amendments to California Labor Code Sections 98.6, 1102.5, and 1197.5 that make it easier for employees to file claims of retaliation.
Today, the law operating over retaliation claims follows a three-stage burden shifting framework. 1) the employee must establish a prima facie – at first glance – case of retaliation; 2) the employer must articulate a non-retaliatory justification for the action; and 3) the employee must prove the employer’s retaliatory intent despite the justification. When it goes live next year, the newly signed SB 497 will greatly lower the bar for employees to establish a prima facie case.
Effective January 1, 2024, when an employee or applicant is disciplined or discharged within 90 days of engaging in protected activity, it is presumed the employer has acted in retaliation. Employers can rebut this presumption by showing a legitimate, nonretaliatory reason for the disciplinary action. If the employer can do this successfully, the employee must then demonstrate that the disciplinary action was retaliatory in nature, despite the non-retaliatory justification.
The Act also makes changes to the civil penalties associated with successful retaliation claims. Today, prevailing claims could see employers hit with a $10,000 penalty per violation, payable to the state. Under the amended law, prevailing employees can receive the full penalty amounts rather than the state. All of the other remedies available for retaliation claims still apply.
Moving forward, employers may want to revisit workplace policies and emphasize careful documentation of employee performance issues to minimize difficulties later down the road. Protected activities that can lead to retaliation claims include but are not limited to, whistleblowing, discussing grievances about wages, benefits, or working conditions, or attempting to self-organize or aid a labor union. The Equal Pay and Anti-Retaliation Act could push employers into retraining supervisors and HR representatives to prevent retaliatory behavior against employees engaging in these activities.
If you have questions about retaliation claims or other labor and employment matters, please contact our Labor and Employment department at 408.286.5800 or firstname.lastname@example.org.
This article is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship. Anyone with questions about this topic should consult an attorney.