2004 California Employment Law Legislative Update

By Robert L. Ford, Richard J. Grabowski, Sarah Heck Griffin, Mark D. Kemple, Patricia A. Kenaga, Allison Michael and Sue J. Stott

Although the recall election and California budget crisis dominated the news, the California Legislature and Governor Gray Davis found ample time to retain their focus on the state's labor and employment laws. The Legislature passed almost as many employment laws as it had in the past and, in doing so, significantly expanded the rights and benefits of employees. Several key areas of change include California's workers' compensation law, increased fines for violations of the labor code, coverage to whistleblowers, and employer liability for sexual harassment.

The following provides a brief summary of the newly passed legislation and its likely impact on California employers.

AB 205 & 17 (Domestic Partnerships)

California law permits the registration of domestic partnerships that meet statutory requirements. Assembly Bill No. 205 enacted The California Domestic Partner Rights and Responsibilities Act of 2003 (the "Act"), which amended existing laws regarding the establishment and termination of a registered domestic partnership and expanded the rights and responsibilities of persons in such a partnership. Assembly Bill 17 amended the Public Contract Code to prohibit state agencies from making contracts in the amount of $100,000 or more with a contractor that, in providing benefits, discriminates between employees with spouses and employees with domestic partners, except under certain circumstances.

The California Domestic Partner Rights and Responsibilities Act of 2003

Expansion of Rights and Duties of Registered Domestic Partners Effective January 1, 2005. The Act provides that registered domestic partners "shall have the same rights, protections, and benefits, and shall be subject to the same responsibilities, obligations, and duties under law . . . as are granted to and imposed upon spouses." Former registered domestic partners and surviving registered domestic partners will have the same rights and duties under law as are granted to and imposed on former spouses and widows and widowers, including rights and obligations with respect to a child of either of them.

Procedural Changes Effective January 1, 2005. The Act made several changes to the registration process for establishing domestic partnerships and the requirements for terminating them. These changes will become operative January 1, 2005. As of that date, both members of a domestic partnership who wish to register their qualifying domestic partnership with the state must file a Declaration of Domestic Partnership. The Declaration will require each partner to consent to the jurisdiction of the superior courts of California for any proceeding related to the partners' rights and obligations, including proceedings to dissolve or annul the domestic partnership or for legal separation of the partners.

Effective January 1, 2005, a registered domestic partnership may be terminated by filing a Notice of Termination of Domestic Partnership with the Secretary of State only if the registered domestic partnership has been in existence for less than five years and the parties meet nine other requirements under the Act, including that there are no children of the relationship, a debt limitation, and that neither party has any real property, except a lease with no option to buy that will terminate within one year of the filing of the Notice of Termination. If the statutory requirements are not met, the registered domestic partnership may only be terminated by a dissolution proceeding in the Superior Courts. As explained below, in such a proceeding, the registered domestic partners must follow the same procedures and will have the same rights, protections, and benefits, and will be subject to the same responsibilities, obligations, and duties as apply to spouses in the dissolution of a marriage.

The new law defines "law" broadly to include "statutes, administrative regulations, court rules, government policies, common law, or any other provisions or sources of law." The Act states that it does not amend the California Constitution or any California law that was adopted by initiative and does not amend federal law. The new law also provides generally that public agencies in California may not discriminate against registered domestic partnerships or registered domestic partners, except with respect to the eligibility requirements for long-term care insurance policies issued by the Public Employees Retirement System, which may be limited to spouses.

The Act provides that it is to be liberally construed so as to ensure that domestic partners have "the full range of legal rights, protections, and benefits, as well as all the responsibilities, obligations, and duties to each other, to their children, to third parties and to the state, as the laws of California extend to and impose upon spouses."

This bill amends Sections 297, 298, and 298.5; adds Sections 297.5 and 299.3; repeals Section 299.5; and repeals and adds Section 299 of the California Family Code. It also amends Section 14771 of the California Government Code and amends Section 3 of Chapter 447 of the Statues of 2002, relating to domestic partnerships.

Public Contracts of $100,000 or More. Assembly Bill No. 17, a separately enacted but related bill, prohibits State agencies from making a contract in the amount of $100,000 or more with a contractor that, in the provision of benefits, discriminates between employees with spouses and employees with registered domestic partners. The bill has a few exceptions and does not go into effect generally until January 1, 2007. This bill adds Section 10295.3 to the California Public Contract Code.

AB 196 (Protections For Transgendered Individuals)

This bill amends the definition of sex in the Fair Employment and Housing Act ("FEHA") to include not only an employee's actual gender, but also the employee's apparent gender based on physical appearance, behavior, or identity. Under the bill, an employer may not refuse to hire, terminate, or otherwise discriminate pursuant to FEHA against individuals based on their apparent gender. The protection extends to transgendered individuals undergoing treatments or surgery to alter their appearance, as well as to persons who exhibit traits not stereotypically associated with the person's birth gender, including personality, clothing, hairstyle, speech, mannerisms, or demeanor, i.e., characteristics such as vocal pitch, facial hair, or the size and shape of the person's body. Included in the protection may be men who are seen as "too feminine" and women perceived as "too masculine."

AB 196 also includes language to protect an employer's ability to regulate an employee's appearance to a certain extent. A new section of FEHA (Government Code section 12949) provides that "nothing in this part relating to gender-based discrimination affects the ability of an employer to require an employee to adhere to reasonable workplace appearance, grooming and dress standards not precluded by other provisions of state or federal law, provided that an employer shall allow an employee to appear or dress consistently with the employee's gender identity."

This bill amends Section 12926 of, and adds Section 12949 to, the California Government Code.

AB 76 (Sexual Harassment Protection Expanded)

This bill amends the Government Code to include as an unlawful employment practice any sexual harassment by nonemployees if the employer knows or should have known of the harassment and fails to take corrective action. This bill is intended to reject the interpretation of Salazar v. Diversified Paratransit, Inc., 103 Cal.App.4th 131 (2002), which is currently under review by the California Supreme Court. In Salazar, the trial court held that Government Code did not apply to harassment by third parties, such as customers and clients. The Court of Appeal affirmed.

With the passage of this bill, employers will now be held responsible for failing...