BILL ANALYSIS
AB 76
Page 1
Date of Hearing: March 4, 2003
ASSEMBLY COMMITTEE ON JUDICIARY
Ellen M. Corbett, Chair
AB 76 (Corbett) - As Amended: February 27, 2003
SUBJECT : PROTECTING EMPLOYEES IN THE WORKPLACE FROM UNLAWFUL
HARASSMENT BY CUSTOMERS, CLIENTS, AND OTHER NON-EMPLOYEES
KEY ISSUE : REGARDLESS OF WHETHER A PERPETRATOR OF HARASSMENT IS
A FELLOW EMPLOYEE, A CUSTOMER OR OTHER THIRD PARTY, SHOULD NOT
AN EMPLOYER BE POTENTIALLY RESPONSIBLE FOR REASONABLY PROTECTING
EMPLOYEES FROM UNLAWFUL HARASSMENT, IF THE EMPLOYER KNEW OR
SHOULD HAVE KNOWN OF THE HARASSMENT AND FAILED TO TAKE IMMEDIATE
AND APPROPRIATE CORRECTIVE ACTION TO STOP IT?
SYNOPSIS
This bill addresses a critical question surrounding workplace
protections against sexual and other forms of harassment:
whether the state's principal anti-harassment law imposes a duty
on an employer to take reasonable steps to prevent employees
from being harassed in the workplace by clients or customers.
In so doing, the bill seeks to invalidate the recent court
decision in Salazar v. Diversified Paratransit, Inc ., a case
that shocked many employment law experts by holding that the
Legislature intended that employers could never be potentially
responsible for protecting their workers from sexual or other
forms of harassment if such harassment was committed by
customers or other outside parties in the workplace. Although
the Salazar case was recently accepted by the California Supreme
Court for consideration, and therefore is not presently viable
law, enactment of this legislation would put to rest any
question of legislative intent raised in the case and thereby
likely eliminate the need for the Supreme Court to hear the
case.
Supporters of the bill, made up of the Attorney General as well
as statewide labor and civil rights groups, argue that the bill
merely maintains the reasonable protections against harassment
by non-employees California workers have long enjoyed under
state as well as federal law. Opponents, on the other hand,
comprising the Chamber of Commerce, other employer groups and
individual businesses, argue that employers in California should
face a lesser liability standard for third party harassment
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under state law than they face under federal law. Opponents
state that unlike employees whom they control, they believe they
have no control over third parties with whom they do business,
and consequently should at most be potentially liable for such
workplace harassment only if they actually knew the employee was
being harassed by a third party and did not take immediate and
appropriate steps to prevent it.
In order to ensure that the Legislature's intention to
invalidate the Salazar case in this bill is clear, and to ensure
that Ms. Salazar is afforded the opportunity to pursue her
liability contentions under the Fair Employment and Housing Act,
an author's amendment to the bill is suggested reflecting the
continuing legislative intent regarding the issue of third party
harassment.
SUMMARY : Effectively invalidates the 2002 court of appeal
decision of Salazar v. Diversified Paratransit, Inc., 126
Cal.Rptr.2d 475 (2002), which held that unlike under federal
law, under the state's Fair Employment and Housing Act employers
in California are not potentially liable for serious harassment
perpetrated against their workers by customers, vendors, and
other third parties. Specifically, this bill :
1)Clarifies language in the Fair Employment and Housing Act
(FEHA) to ensure that under state law employers may
potentially be liable for harassment committed against their
workers by clients, customers and other third parties if they
knew or should have known of the harassment and failed to take
immediate and appropriate corrective action to stop the
harassment.
2)Effectively invalidates the court of appeal decision last year
of Salazar v. Diversified Paratransit, Inc., 126 Cal.Rptr.2d
475 (2002).
3)Ensures that California's discrimination law is not weaker
than federal law in the area of the workplace regarding
workplace protections for employees facing harassment by
customers and other third parties.
EXISTING LAW :
1)Makes it an unlawful employment practice, under the FEHA, for
an employer or other covered entity to harass an employee or
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other covered individual because of race, religious creed,
color, national origin, ancestry, physical disability, mental
disability, medical condition, marital status, sex, age or
sexual orientation. (Government Code Section 12940(j)(1).
All further statutory references are to this code.)
2)Provides that harassment of an employee or other covered
individual by an employee other than an agent or supervisor is
unlawful if the employer knew or should have known of the
conduct and failed to take immediate and appropriate
corrective action, and requires employers in California to
seek to prevent all harassment in the workplace by taking "all
reasonable steps to prevent harassment from occurring."
(Section 12940 (j)(1) and (k).)
3)Requires employers to take "a very dim view of all forms of
harassment, whether by supervisors or others." (Carrisales v.
Department of Corrections (1999) 21 Cal.4th 1132, 1139
(emphasis added.))
4)Contains, in the uncodified preamble to the FEHA since 1984,
the Legislature's intent that "employers be required to
establish affirmative programs . . . so that work sites will
be maintained free from prohibited harassment and
discrimination by . . . [employers'] . . . agents,
administrators, and supervisors as well as by their
non-supervisors and clientele."(Stats.1984, ch. 1754, 1
(emphasis added).)
FISCAL EFFECT : The current version of this bill is keyed
fiscal.
COMMENTS : This bill is sponsored by the California Labor
Federation and the California chapter of the National
Organization for Women. The bill addresses a critical question
surrounding workplace protections against sexual and other forms
of harassment: whether or not the state's principal
anti-harassment law, when fairly read, imposes a duty on an
employer to take reasonable steps to prevent its employees from
being harassed in the workplace by clients or customers of the
employer. In so doing, the bill seeks to invalidate the recent
court decision in Salazar V. Diversified Paratransit, Inc., a
case that shocked many employment law experts when it held that
the Legislature did not intend the state's Fair Employment and
Housing Act (FEHA) to hold employers potentially responsible for
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protecting their workers from sexual or other forms of
harassment if such harassment was committed by customers or
other outside parties in the workplace.
In support of the bill, the author states:
Every once in a while, a court decision comes down in
our sister branch that truly shocks the conscience.
This bill addresses one such case, where female bus
driver Raquel Salazar was forced to endure serious and
repeated harassment by a bus rider without her employer
taking reasonable steps to protect her. Amazingly,
when Ms. Salazar sought relief against her employer for
the injuries she suffered, the trial court, and
subsequently the court of appeal, held that no relief
was available under the FEHA and dismissed her case.
This is not only an outrage for Ms. Salazar, it is
unacceptable for all California workers, and we in the
Legislature must set it right.
The Salazar Majority Decision : In the majority opinion, a
sharply divided Court of Appeal concluded that although the FEHA
created an affirmative duty requiring employers to prevent
workplace harassment, that duty was intended to extend solely to
such harassment committed by the employer's employees,
supervisors and agents. The majority therefore concluded that-
regardless of how egregious the harassment, or the employer's
actual knowledge of it- the employer's duty to prevent
harassment did not extend to harassment by the employer's
customers or clients.
The Blistering Dissent in Salazar : In the 2-1 decision in
Salazar, Presiding Justice Joan Dempsey Klein vociferously
dissented, stating that the majority's opinion makes no sense as
a matter of statutory construction, and does serious damage to
the fundamental policies which the FEHA was intended to further.
Indeed, Justice Klein noted that the employer forced Ms.
Salazar, over her protests and as a condition of her continued
employment, to interact with the client in circumstances where
Ms. Salazar was ultimately forced to be sexually exposed to a
client of the business for whom she worked. Thus, wrote Justice
Klein, the very powerlessness that underlies so much of our
anti-harassment law was directly implicated by the circumstances
of her case. It obviously made no difference to Ms. Salazar
whether the threat to her safety came from a fellow employee, or
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from a client or anyone else with whom she was required to
interact. (Salazar, supra.)
The Uncodified Intent Provision in FEHA Would Appear to Settle
Any Argument Here. As noted above, the uncodified preamble to
the FEHA has for almost 20 years stated legislative intent that
"employers be required to establish affirmative programs . . .
so that work sites will be maintained free from prohibited
harassment and discrimination by . . . [employers'] . . .
agents, administrators, and supervisors as well as by their
non-supervisors and clientele." (Stats.1984, ch. 1754, 1,
emphasis added.) Supporters of this bill, in addition to
Presiding Justice Klein in her dissent in Salazar, suggest this
language should put a quick end to the question whether the
Legislature intended to cover third party harassment under FEHA.
It is well-settled that uncodified provisions of a statute may
be relied upon as reliable indicators of legislative intent.
(See, e.g., Barker v. Brown & Williamson Tobacco Corp. (2001) 88
Cal.App.4th 42, 49.)
The View of the Department of Fair Employment and Housing : It
should be noted that in response to an inquiry from the
Committee as to the view of the state agency vested with the
duty for interpreting and implementing the FEHA, the Department
verified to the Committee that it does indeed now and has long
considered such cases against third parties covered under the
umbrella of the FEHA. As Justice Klein noted in her dissent in
Salazar, it is settled that agency interpretation is an
interpretive tool, and it is appropriate to look to the
Department's interpretation for guidance.
Passage Of The Legislation Will Keep State Law Consistent With
Federal Law Regarding Third Party Harassment : There appears to
be little dispute that enactment of this bill will ensure that
state law in this area is consistent with the federal approach
to third party harassment. The converse is of course also true:
if the Salazar case is permitted to stand, California law in
this area will be less worker-protective than federal law.
The federal cases are virtually unanimous in their conclusion
that an employer may be held liable for a non-employee's sexual
harassment of an employee, if the employer fails to remedy or
prevent a hostile or offensive work environment which
management-level employees knew, or in the exercise of
reasonable care should have known, existed. (See, e.g., Crist
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v. Focus Homes, Inc. (8th Cir. 1997) 122 F.3d 1107, 1112
(residential home could be held liable for failing to take
reasonable steps to protect its employees from sexual assaults
by a client with a developmental disability who had a known
history of sexually harassing his caregivers)).
The author notes: "My bill will renew a strong message to
employers that unlawful harassment of employees will not be
tolerated, regardless of the technical title of the harasser, so
long as the employer knew or should have known of the harassment
and failed to take reasonable actions to protect his or her
employees."
California Treatises Also Recognize that Employers Can be Held
Liable for Failing to Protect their Employees from Harassment
from Their Clients : Leading California practice guides on
employment law states that an employer may be held liable for
harassment of its employees by non-employees, when the employer
fails to take reasonable steps to prevent the harassment. (See,
e.g., Chin, Cathcart, Exelrod & Wiseman, Cal.Prac. Guide:
Employment Litigation (The Rutter Group 2001), Sections
10:119-10:120, 10:410-10:411; 2 Advising California Employers
(Cont.Ed.Bar 2d 3d. 2001) section 16.78, p. 1012; 2 Wilcox,
California Employment Law, section 41.81[6][d].)
Ineffectiveness of Traditional Tort Remedies . In its decision
that Ms. Salazar had no remedy under the FEHA against her
employer, the majority in the Salazar case suggested other
remedies would still be available to her. However many
discrimination law experts have suggested that the very reason
state and federal statutory anti-harassment laws evolved was
precisely because traditional tort remedies are ill-suited to
compensate victims of workplace harassment. In short, recovery
under tort theories for sexual harassment is very difficult.
Each of the potential claims presents difficulties for the
claimant, even where the behavior is clearly unlawful under
FEHA. The inadequacies of these theories to protect those who
suffer harassment in the workplace highlight the need for, and
genesis of, statutes such as the FEHA to create liability as a
means of deterring and redressing unlawful workplace conduct.
Possible Author's Amendment : In order to ensure that the
Legislature's intention to invalidate the Salazar case in this
bill is clear, and to ensure that Ms. Salazar is afforded the
opportunity to pursue her liability contentions under the Fair
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Employment and Housing Act, the author may wish to add the
following provision to the bill as an author's amendment:
SEC. 2. It is the intent of the Legislature in enacting this
act to construe and clarify the meaning and effect of existing
law and to reject the interpretation given to the law in
Salazar v. Diversified Paratransit, Inc., 126 Cal.Rptr.2d 475
(2002).
ARGUMENTS IN OPPOSITION : As noted above, opponents of this
legislation comprise the Chamber of Commerce and other employer
groups and individual businesses. They argue that it is high
time in California for employers to face more employer-friendly
liability standards, regardless of the view taken by federal
law. They state that unlike with employees whom they control
they believe they have no control over third parties they do
business with who harass their workers, and consequently should
at most be potentially liable for such workplace harassment only
if they actually knew that one of their employees was being
harassed by a third party, and thereafter did not take immediate
and appropriate steps to prevent it. Indicative of this view is
that of the Chamber of Commerce, which writes:
While employers believe that AB 76 was introduced with the
best of intent, the proposal ends up placing an
unreasonable liability on the business community...
Employers believe while employers have general duty under
FEHA to prevent harassment, the duty is limited by the
specific reference to employees and contract workers within
the language of the act. Employers believe that this view
is correct due to the fact that workers are the only
individuals over which the employer may legally exercise
control... Employers would be able to remove their
opposition if AB 76 was revised [to impose potential
liability on employers only]... "if the entity, or its
agents or supervisors knows of this conduct and fails to
take immediate and appropriate corrective action."
REGISTERED SUPPORT / OPPOSITION :
Support
California Labor Federation (co-sponsor)
California National Organization for Women (co-sponsor)
American Federation of State, County and Municipal Employees
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Attorney General
California Employment Lawyers Association
California Commission on the Status of Women
California Professional Firefighters
California School Employees Association
California State Employees Association
California Teachers Association
Commission on the Status of Women
Congress of California Seniors
Consumer Attorneys of California
Lambda Letters Project
Privacy Rights Clearinghouse
Opposition
California Association of Health Facilities
California Bankers Association
California Chamber of Commerce
California Manufacturers & Technology Association
The National Federation of Independent Business
Automotive Aftermarket Services Inc. (AASI)
Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334