BILL ANALYSIS �
SB 1407
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SENATE THIRD READING
SB 1407 (Jackson)
As Amended May 27, 2014
Majority vote
SENATE VOTE :30-5
JUDICIARY 9-0
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|Ayes:|Wieckowski, Wagner, | | |
| |Alejo, Chau, Dickinson, | | |
| |Garcia, Maienschein, | | |
| |Muratsuchi, Stone | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Codifies basic principles requiring that the release
of employment discrimination claims be knowing and voluntary.
Specifically, this bill provides that a release of a claim under
the Fair Employment and Housing Act (FEHA) shall be valid only
if it is knowing and voluntary.
EXISTING LAW :
1)Pursuant to FEHA, prohibits, as a matter of public policy,
discrimination in housing and employment on the basis of race,
religious creed, color, national origin, ancestry, physical
disability, mental disability, medical condition, genetic
information, marital status, sex, gender, gender identity,
gender expression, age, sexual orientation, or military and
veteran status.
2)Prohibits an employer from requiring the execution of a
release of a claim or right on account of wages due, or to
become due, or made as an advance on wages to be earned,
unless payment of those wages has been made. A release made
in violation of this provision shall be null and void and a
violation of this provision by the employer is a misdemeanor.
3)Generally regulates the formation of contracts and provides
that anyone may waive the advantage of a law intended solely
for his or her benefit, but provides that a law established
for a public reason cannot be waived by private agreement.
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4)Authorizes the court to refuse to enforce a contract, or
provision thereof, if the court finds the contract to have
been unconscionable when made.
FISCAL EFFECT : None
COMMENTS : The author explains that the purpose of this bill is
to protect workers from sexual exploitation and other wrongful
conduct in the workplace by prohibiting employers from requiring
workers to sign inconspicuous releases of claims, often in
exchange for keeping their jobs or receiving wages. The author
states:
A disturbing practice has emerged in certain
workplaces where employers are engaging in ongoing
sexual harassing conduct, but are then purporting to
exempt themselves from the law by requiring workers to
sign away their rights as a condition of employment or
receiving wages.
These employers routinely require workers to sign
"agreements" for bonuses, raises, or employment that
include inconspicuous terms that release the employer
for any and all claims, including sexual harassment
claims; prohibit workers from discussing the
conditions of the workplace; and that force workers
into private arbitration so that any claims brought
against the employers remain secret and outside a
court of law.
With the ability to engage in this kind of routine
employment practice, employers can sexually exploit
their workers, who are often very young women, without
fear of liability or public scrutiny.
The FEHA prohibits discrimination in employment on the basis of
race, sex, and other characteristics, and permits an individual
who alleges discrimination to vindicate his or her rights by an
administrative complaint to the Department of Fair Employment
and Housing and a lawsuit against the employer or other covered
entity.
Supporters of this measure complain that some employers have
engaged in unfair and deceptive practices by obtaining the
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signature of an employee on a document purporting to exonerate
the employer from liability for discrimination by camouflaging a
release of liability in documents that appear to have other
purposes, often soon after the employer has engaged in sexual
harassment or other unlawful conduct and before the victim has
even asserted a complaint. These releases are sometimes
accompanied by some nominal consideration such as a stipend or
bonus, or simply the payment of wages already due. If upheld,
this practice would permit the employer to engage in illegal
discrimination or harassment - even an ongoing pattern or
practice of discrimination or harassment - by simply buying the
right to do so for little or no compensation and without
meaningful notice or choice by the victim. Although the
validity of these releases would seem to be questionable under
common law principles, they have reportedly been upheld by
private arbitrators who are free to disregard most laws but are
obligated to recognize statutory FEHA rights.
The author argues that in the absence of statutory limitation on
releases of FEHA claims, employers can sexually exploit their
workers, include very young women, without fear of liability or
public scrutiny, and coerce these workers to sign documents
containing releases of claims. These workers are not made aware
that these documents contain waivers and releases of claims, and
existing law makes it difficult to demonstrate that the
documents were executed without knowledge of their FEHA rights
and, in certain instances, were not voluntary. Examples of FEHA
claims release issues have surfaced where employers, after
allegedly sexually harassing employees, required the employees
to sign documents containing inconspicuous FEHA claims waivers
and releases in exchange for wages, bonuses, raises, and
continued employment. (See Lo v. American Apparel, Inc.
(Superior Court of County of Los Angeles, 2011, No. BC 457920;
Nelson v. American Apparel, Inc. (October 28, 2008, B205937)
[non-published opinion.].)
There is no opposition on file.
Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334
FN: 0004091
SB 1407
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