BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1670| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1670 Author: Assembly Judiciary Committee Amended: 9/3/99 in Senate Vote: 21 SENATE JUDICIARY COMMITTEE : 5-2, 8/17/99 AYES: Burton, Escutia, O'Connell, Sher, Schiff NOES: Morrow, Wright NOT VOTING: Haynes, Peace SENATE APPROPRIATIONS COMMITTEE : 8-5, 8/30/99 AYES: Johnston, Alpert, Bowen, Burton, Escutia, Karnette, Perata, Vasconcellos NOES: Johnson, Kelley, Leslie, McPherson, Mountjoy ASSEMBLY FLOOR : 41-31, 6/3/99 - See last page for vote SUBJECT : Civil Rights: Employment and Housing SOURCE : California Office of the Attorney General California Fair Employment and Housing Commission American Civil Liberties Union California Labor Federation, AFL-CIO California Civil Rights Coalition DIGEST : This is an omnibus bill which would make several changes to the California Fair Employment and Housing Act (FEHA) and Civil Code relating to employment and housing discrimination. Specifically, the key provisions of this bill: CONTINUED AB 1670 Page 2 1. Increase the amount of damages and administrative fines that may be awarded by the Fair Employment and Housing Commission in employment discrimination cases from $50,000 to $150,000, and permit a court to award expert witness fees to a prevailing party in FEHA cases. 2. Extend harassment protections under FEHA to contract workers. 3. Require employers to provide reasonable accommodations to pregnant employees. 4. Clarify that genetic testing of employees is prohibited. 5. Expand the class of employers subject to FEHA's prohibition against discrimination on the basis of mental disability from those with 15 or more employees to those with five or more employees. 6. Clarify that protections against housing and employment discrimination cover discrimination based upon a victim's perceived membership in a protected class. 7. Define "supervisor" under the FEHA as it is currently defined in the California Agricultural Labor Relations Act. Senate Floor Amendments add double-joining language. ANALYSIS : Existing law prohibits business establishments from discriminating against, boycotting or blacklisting, or refusing to buy from, sell to, or trade with, any person because of the race, creed, religion, color, national origin, sex, or disability of that person or the person's partners, members, stockholders, directors, officers, managers, superintendents, agents, employees, business associates, suppliers, or customers. (Civil Code Section 51.5, the Unruh Civil Rights Act.) This bill adds: AB 1670 Page 3 1. Protection for persons perceived to have any of those characteristics, and; 2. "Refusal to contract " as a prohibited act. Existing law prohibits employment and housing discrimination on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex or age. (Government Code Section 12940 et. Seq., the Fair Employment and Housing Act.) This bill adds discrimination based upon: 1. The perception of a person violating this section that the victim belongs to a protected category, and; 2. Association with persons in a protected category. Existing law provides that the combined amount of damages and administrative fines that may be awarded by the State Fair Employment and Housing Commission in employment discrimination cases is capped at $50,000. (Section 12970 (a)(3).) However, there is no cap at all on the amount of damages that may be awarded by the commission in housing discrimination cases. (Section 12987(a).) This bill increases the amount of damages and administrative fines that may be awarded by the State Fair Employment and Housing Commission in employment discrimination cases from $50,000 to $150,000. Existing law provides that the State Department of Fair Employment and Housing shall respond to complaints of discriminatory practices by employers and owners of housing accommodations. This bill: 1. Declares that the opportunity to seek, obtain, and hold housing without discrimination on any basis protected under Civil Code Section 51 is a civil right. AB 1670 Page 4 2. Declares it is an unlawful housing practice to harass a tenant or prospective tenant, buyer or prospective buyer on any of the bases protected under FEHA. Existing law authorizes the court in actions brought under FEHA to grant any relief normally available to courts in civil actions. In addition, the court may order any other relief in FEHA cases that, "in the judgment of the court, will effectuate" the purpose of the Act. (Section 12965 (c)(3).) This bill: 1. Permits a court to award expert witness fees to a prevailing party in FEHA cases. 2. Adds the FEHA may be enforced by private parties against agencies which receive public funds through civil actions for equitable relief. 3. Authorizes a court in an employment action under FEHA to require employers to conduct employee and supervisor training on the requirements of FEHA and the rights and remedies available for violation. Existing law makes it an unlawful employment practice under FEHA for an employer to refuse to transfer a pregnant female employee, upon her request, to a less strenuous or hazardous position for the duration of her pregnancy. This bill makes it an unlawful business practice for any employer, including both employers subject to and not subject to Title VII of the federal Civil Rights Act of 1964, to refuse to provide reasonable accommodations for an employee for conditions related to pregnancy, childbirth or related medical conditions, if she so requests, with the advice of her health care provider. Existing law declares that it is an unlawful employment practice for employers, including employer agents, among others, to harass an employee or applicant on the basis of various protected characteristics. However, independent contractors are not protected from harassment. AB 1670 Page 5 This bill adds a person providing services pursuant to a contract and defines that person as: 1. One who has the right to control the performance of the contract for services and discretion as to the manner of performance. 2. One who is customarily engaged in an independently established business. 3. One who has control over the time and place the work is performed, and performs work that requires a particular skill not ordinarily used in the employer's work. Existing law, FEHA, prohibits employment discrimination against individuals with physical disabilities, mental disabilities, or medical conditions. The FEHA applies to private employers of 15 or more employees for discrimination on the basis of mental disability, and private employers of five or more employees for discrimination on the basis of physical disability. This bill applies FEHA to private employers of five or more employees for discrimination on the basis of mental disability. Existing law prohibits employment discrimination on the basis of genetic characteristics. This bill clarifies that genetic testing of employees is also prohibited. Existing law does not contain a definition of "supervisor" in the FEHA. Existing law defines "supervisor" under the California Agricultural Labor Relations Act (CALRA) as any individual having the authority, in the interest of the employer, to hire, transfer, suspend, layoff, recall, promote, discharge, assign, reward, or discipline other employees, or the responsibility to direct them, or to adjust their grievances, or effectively to recommend that action, if in connection with the foregoing, the exercise of that authority is not of a merely routine or clerical nature, AB 1670 Page 6 but requires the use of independent judgment. This bill would apply the CALRA definition of supervisor to FEHA. The bill provides that the amendments made by this act to Section 51.5 of the Civil Code and to Sections 12926, 12927 and 12955 of the Government Code do not constitute a change in, but are declaratory of, existing law. This bill is double-joined with SB 211 (Solis), SB 1098 (Burton), SB 1148 (Burton), and SB 1185 (Johnston). Discussion of provisions which have drawn opposition 1. Extending FEHA harassment protection to contract employees This bill allows a person providing services pursuant to a contract to sue for harassment under FEHA. This is a limited protection for contract workers, as AB 1670 does not extend the full employment discrimination prohibitions contained in FEHA to them. The bill's supporters acknowledge that sexual harassment laws were originally premised on the idea that a woman could not get away from a harasser's advances without losing her job, or suffering some other adverse employment action. Independent contractors were excluded from the employment protection statutes, as it was considered that they could get away, not being bound as an employee to the bad situation. However, the dynamics of employment have changed in recent years, they say. Today employers have substantially increased the use of contract workers as a cost savings measure. With the switch from employment to contract status, "the duties remained the same, only the benefits changed." Situations where a contract employee could be subjected to harassment without recourse include a self-employed specialist such as a graphic designer, who works "in-house" on a company's newsletter; or a long-term "independent contractor," who performs as a traditional employee, but is never made a true employee--thereby AB 1670 Page 7 saving the employer from paying taxes and benefits. Opponents object to this provision fearing it "obliterates the distinction between employees and independent contractors." The California Manufacturers Association believes, "This could result in employers being held liable for the payment of workers compensation insurance, payroll taxes, etc., plus any penalties and interest that may accrue." The Civil Justice Association of California adds, "creating this exception to the independent contractor status would simply open employers to targeting for frivolous lawsuits by persons who have little stake in trying to solve a potentially bad worksite situation with something less than a lawsuit. Where a serious harassment does occur, independent contractors have recourse to laws relating to assault and battery." 2. Raise the cap on employment discrimination damages This bill increases the amount of damages and administrative fines that may be awarded by the State Fair Employment and Housing Commission in employment discrimination cases from $50,000 to $150,000. As noted above, there is no cap on the amount of damages that may be awarded by the commission in housing discrimination cases. According to the author, "It is hoped that this augmentation in available damages that may be awarded by the Commission under FEHA will make resolution of discrimination complaints via the administrative process rather than court more attractive to plaintiffs. By raising the cap on damage awards in employment discrimination cases, the Committee hopes to encourage more plaintiffs to choose the less cumbersome, and less expensive, option of administrative action over the more lengthy and costly court option." Opponents, such as the California Chamber of Commerce, claim that "the current level of $50,000 is a legislative compromise, which gave to the DFEH the authority to impose capped punitive damages. If any AB 1670 Page 8 further increase is appropriate, the same limit should apply in employment cases filed with the civil courts. The Civil Justice Association of California (CJAC) adds, "tripling the $50,000 cap to $150,000 on damages and administrative fines assessed by the State Department of Fair Employment and Housing makes the employer liability similar to that of civil court. This provision removes an employer's incentive to use administrative remedies and would needlessly add to the already clogged California Courts." T he current $50,000 was put in place through passage of AB 311 (Moore), Ch. 911, Statutes of 1992, which provided the commission constitutional authority to award compensatory damages under FEHA, capped at $50,000. Also included in AB 311 was a requirement that the commission report back to the Legislature on the adequacy of the amount available to compensate victims of discrimination and administrative fines permitted by AB 311 by January 1, 1995. The 1995 commission report provided important support for at least raising the $50,000 cap on damages and administrative fines by stating that "The [current] $50,000 ceiling may ... have the unintended effect of encouraging complainants to file civil actions in the courts rather than making use of the administrative forum. A primary reason for authorizing the commission to award emotional distress damages and administrative fines was to encourage FEHA litigants to remain in the administrative forum, which is generally more timely and less costly to parties than court litigation. Because the $50,000 ceiling is relatively low compared to the five-, six-, and even seven-figure awards sometimes ordered in FEHA court suits, complainants may be inclined to take their cases to court rather than stay in the administrative forum. Thus, it may be appropriate to consider raising the ceiling." 3. Supervisor defined FEHA prohibits harassment of an employee . . . by an employee other than an agent or supervisor if the entity, or its agents or supervisors, knows or should AB 1670 Page 9 have known of this conduct and fails to take immediate and appropriate corrective action. There is no definition of supervisor in FEHA. This bill imports into FEHA the definition of supervisor from the CALRA. According to the author, "This common sense definition should help clarify for employers and employees alike, as well as for the courts, those individuals who are acting with supervisorial authority for purposes of the Fair Employment and Housing Act." The Civil Justice Association of California opposes the bill, in part, because "This broad definition (of supervisor) will greatly expand liability in the workplace. Employers will be vicariously liable for alleged harassment or discrimination of supervisors, even if the employer is unaware of the incident." CJAC also opposes this provision of the bill in part because of their belief that, "This bill extends the liability of supervisors in discrimination and harassment cases?" In Fiol v. Doelstedt (App.2 Dist. 1996) 50 Cal.App.4th 1318, the court held that "The 'agent of an employer' language in section 12940, subdivision (h)(3)(A), does not impose personal liability on a non-harassing supervisor?" As this legislation only defines supervisor, and does not address the Fiol holding on personal liability, the opposition seems unfounded on this point. 4. Accommodation of pregnant workers This bill requires an employer to reasonably accommodate pregnant employees. Current law prohibits discrimination against a worker based upon her temporary disability of being pregnant. The law also requires employers to make reasonable accommodation for disabled employees, and it allows pregnant women to request a transfer to a less strenuous position as a means of accommodation. The author states in support of this provision, " FEHA does not yet expressly permit less costly, and often more desirable and appropriate, accommodations for AB 1670 Page 10 pregnant employees that fall short of job transfer. The proposed amendment to FEHA regarding pregnancy is intended to permit employers to allow pregnant employees to remain in their current positions for longer time periods without the need for transfer, while assuring that less costly and disruptive steps (such as simply permitting more frequent restroom breaks or rest periods) are taken for pregnant employees who do not want or need to be transferred from their current positions. The California Chamber of Commerce opposes this provision, claiming, "There is no definition of what reasonable accommodation is and this will lead to increased litigation." However, reasonable accommodation is defined in existing law as, "making existing facilities used by employees readily accessible to, and usable by, individuals with disabilities, or job restructuring, part-time or modified work schedules, reassignment to a vacant position, acquisition or modification of equipment or devices." Government Code Section 12926 (m). Therefore, this objection seems overstated. 5. Allowing courts to impose discrimination awareness training as a remedy This bill provides that a court may require an employer found to be in violation of FEHA to conduct training of its employees, supervisors, and management regarding the requirements of the Act. FEHA currently authorizes a court to grant any relief normally available to courts in civil actions. In addition, the court may order any other relief in FEHA cases that, "in the judgment of the court, will effectuate" the purpose of the Act. According to the author, "This bill simply clarifies that such relief may include "a requirement that the employer conduct training for all employees, supervisors, and management on the requirements of [FEHA], the rights and remedies of those who allege a violation of [the Act], and the employer's internal grievance procedures." AB 1670 Page 11 Both the California Chamber of Commerce and California Manufacturers Association (CMA) oppose this provision, with CMA saying, "While the employment discrimination may have been an isolated case, a judge could require training to be conducted for thousands of employees who are not involved at a tremendous cost to the employer for no useful purpose." 6. Expert witness fees This bill permits the court to award expert witness fees to a prevailing party. The author points out that "the federal counterpart to FEHA is Title VII, which expressly permits the award of expert witness fees as part of the reimbursement of costs available to a prevailing party. (Section 2000e-5(k) of Title VII). In addition, this approach is also consistent with the approach FEHA already takes regarding attorney's fees and court costs; the act permits a court in any civil action brought under FEHA to award, with certain exceptions, the prevailing party reasonable attorney's fees and costs." The California Manufacturers Association opposes this provision of the bill because, "allowing the court to award expert witness fees to the prevailing party will encourage dueling experts and increase litigation." 7. Religious concerns seem misdirected A number of opposition letters object to this bill because of the writers' beliefs that it would extend actions under FEHA to gay persons. The Seventh-Day Adventist Church State Council and Traditional Values Coalition (TVC) also oppose the bill based upon this belief, with TVC saying, "this bill takes sexual behavior, homosexuality and bisexuality, and grants minority status to them. Even though the author stated on the Assembly Floor that the bill does not effect (sic) homosexuality, that was not true. Section 4 of this AB 1670 amends Section 12921 (b) of the Government Code by adding 'any other basis prohibited by Section 51 of the Civil Code is hereby recognized as and AB 1670 Page 12 declared to be a civil right.' Section 51.7 of the Civil Code includes sexual orientation." This conclusion seems to stem from a mistake of statutory construction. It is axiomatic that expressio unius est exclusio alterius, the specific expression of one thing excludes all others. Pratt, Legal Writing: A Systematic Approach (2d Ed. 1990) p. 341. Under this rule of statutory construction a reference to Section 51 does not extend to cover any other section of law. This is true unless the bill states an intention to extend beyond the referenced provision, as may be accomplished by inclusion of a phrase such as et sequentes (and the following), or a listing of the additional provisions intended to be covered. In this instance, the bill only references Section 51. Without any indication in the language of the bill, and with the author clearly stating that the bill does not cover homosexuals, the concern that this bill somehow extends gay rights seems misplaced. It should be noted that the committee is also in receipt of letters from churches and religious organizations which support this bill. For example, this from the Fresno Metro Ministry. "Fresno Metro Ministry believes that all persons should be free from harassment and discrimination in their home and workplace and we think AB 1670 goes a long way towards achieving that goal. In its thirty years, Fresno Metro Ministry has seldom taken stands on specific legislative proposals. However, in this instance we feel compelled to do so. As a faith-based organization, the board and members of Fresno Metro Ministry have become increasingly concerned about the negative tenor and tactics of distortion and intimidation some in the religious-political community are using. We find these tactics to be objectionable and harmful to the community, and not reflective of many members of the faith community." Major non-controverted provisions of the bill 1. Protection against discrimination based on association AB 1670 Page 13 and perceived membership in a protected class The bill provides that FEHA's protections against housing and employment discrimination, and Civil Code Section 51.5's protections against discrimination in boycotting, buying, selling, and trading, also cover discrimination based upon the perception that a victim is a member of a particular protected class. It also amends Civil Code Section 51.5 to include the "refusal to contract with" as part of the statute's discrimination protections. In addition, the bill states that FEHA's protections against housing and employment discrimination cover associational rights as well, i.e., discrimination based upon perceptions about whom one may be associating with will now be protected under the act. The author offers that discrimination involving the improper firing of an African-American woman because she was dating a white man, or discrimination against a prospective renter because his friends are of a different racial background, appropriately could be brought within FEHA's protective umbrella. 2. Prohibition against harassment in housing This bill declares it is an unlawful housing practice for a housing owner to harass a tenant or prospective tenant on any of the bases protected under FEHA. According to the author, this bill is intended to eliminate the current statutory ambiguity noted by the court and adds the term "harassment" to that part of the act. The bill also clarifies that the opportunity to seek, obtain, and hold housing free from discrimination is a civil right of equal import as that right already expressed regarding discrimination-free employment. This provision is consistent with a recent state court of appeal decision, Brown v. Smith (1997) 55 Cal.App. 4th 767, where the court held that while the housing side of FEHA does not mention the word "harassment," it is a variety of sex discrimination and therefore subject to the protections of FEHA. ( Id. at 782.) In AB 1670 Page 14 Brown, a tenant was subject to severe instances of sexual harassment by her landlord, who repeatedly pressured her for sexual relations in exchange for favorable rent. The appellate court clarified that even though FEHA does not expressly mention harassment in its housing discrimination proscriptions, the act covers it as a form of prohibited discrimination. 3. Private "equitable" remedy against entities which receive state funds This bill provides that the prohibition against discrimination by agencies or entities receiving state funds is enforceable through a civil action for equitable relief. Under current law (subdivision (a) of Government Code Section 11135), "No person in the State of California shall, on the basis of ethnic group identification, religion, age, sex, color, or disability, be unlawfully denied the benefits of, or be unlawfully subjected to discrimination under, any program or activity that is funded directly by the state or receives any financial assistance from the state." Thus, according to the author, "under this provision, entities undertaking programs or activities that are funded directly by the State, and entities that receive financial assistance from the State, may not unlawfully deny benefits or discriminate on the basis of any of the specified protected categories. As required by current Government Code Section 11139.5, the secretary of the State Department of Health and Human Services, together with the State Fair Employment and Housing Commission, have established regulations determining what persons are protected by these provisions and what practices are discriminatory. (See 22 Cal. Code Reg. Section 98000 et. seq.). Although the commission's exclusive authority to fashion remedies for discrimination is not limited by these provisions, there has been some confusion in the courts about the ability to bring a private cause of action to enforce the prohibition against discrimination by AB 1670 Page 15 agencies or entities receiving state funds. At least one California court of appeal has held that there is no such right under Government Code Section 11135. Arriaga v. Loma Linda University (1992) 10 Cal.App. 4th 1556. However, a panel of the Ninth Circuit Court of Appeal has held that such a private right is available. Greater Los Angeles Council on Deafness v. Zolin (9th Cir. 1987) 812 F.2d 1103, 1113-1114. The author states, "this bill does not settle that conflict about available enforcement remedies, but it does clarify that the prohibition against discrimination by agencies or entities receiving state funds is at least enforceable through a civil action for equitable relief. This will permit private individuals to seek judicial relief to force agencies or entities receiving state funds to halt their discriminatory practices." Prior Related Legislation SB 654 (Johnston), 6/18/98, 21-10, Chapter 99, Statutes of 1998, prohibited discrimination under FEHA based upon genetic characteristics. AB 310 (Kuehl), 1998, would have: 1. Defined employer to exclude religious corporations, associations, educational institutions, or societies with respect to the employment of individuals of a particular religion to perform work connected with the carrying on the activities of the religious group (the current federal standard); 2. Defined "supervisor," and made a supervisor individually liable if they fail to act upon claims of harassment of an employee by another employee; 3. Extended the prohibition of sexual harassment to include a person who provides services under contract; 4. Allowed the State Department of Fair Employment and Housing (DFEH) to undertake independent investigations AB 1670 Page 16 of employment and housing discrimination; 5. Required that an employer reasonably accommodate a pregnant female; 6. Defined "harassment" and clarified that it is viewed from the reasonable person of the victim's same-gender standard; 7. Prohibited employers from engaging in genetic testing, except where a bona fide occupational qualification exists, and prohibited genetic trait discrimination; 8. Lifted the monetary cap on the award of actual damages for pain and suffering in employment discrimination cases; 9. Allowed a court to award expert witness fees to a prevailing party, and; 10. Provided that the FEHA does not prohibit a city and county, or other political subdivision of this State from providing or maintaining greater protections for the classes of persons protected by the provisions relating to housing discrimination. Then-Governor Wilson vetoed AB 310, based upon the independent contractor liability provision of the bill. He stated, "this bill would, among other provisions, seek to extend liability so as to hold employers liable for the harassment of independent contractors. California's discrimination laws are predicated on the traditional employer and employee relationship, which under both the Labor and Government Codes require certain duties and responsibilities. This bill would give protection against discrimination to non-employees who are independent contractors engaged in independently established businesses with, among other things, the right to control how and when their work is performed." Prior Legislation : SB 48 (Solis), 1998, subsequently amended to remove relevant provisions and vetoed. AB 1670 Page 17 SB 1254 (Calderon) subsequently amended into an educational reform measure, Chapter 400, Statutes of 1998. SB 654 (Johnston), Chapter 99, Statutes of 1998, AB 310 (Kuehl), vetoed FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No Fiscal Impact (in thousands) Major Provisions 1999-2000 2000-01 2001-02 Fund FEHA Unknown increased costs, probablyGeneral not substantial, potentially offset by unknown increased fine revenues Courts Unknown General SUPPORT : (Verified 9/1/99) California Office of the Attorney General (co-source) California Fair Employment and Housing Commission (co-source) American Civil Liberties Union (co-source) California Labor Federation AFL-CIO (co-source) California Civil Rights Coalition (co-source) American Federation of State, County and Municipal Employees California School Employees Association California National Organization for Women Equal Rights Advocates Legal Aid Society of San Francisco Lawyers Committee for Civil Rights of the San Francisco Bay Area California Conference of the Amalgamated Transit Union Engineers and Scientists of California Region 8 States Council of the United Food and Commercial Workers Hotel Employees, Restaurant Employees International Union California Conference of Machinists California Commission On The Status Of Women American Association of University Women AB 1670 Page 18 Consumer Attorneys of California OPPOSITION : (Unable to verify at time of writing) California Employment Law Council Civil Justice Association of California Seventh-day Adventist Church State Council Traditional Values Coalition California Manufacturers Association California Chamber of Commerce Numerous individuals ASSEMBLY FLOOR : AYES: Alquist, Aroner, Bock, Cardenas, Cardoza, Cedillo, Corbett, Correa, Davis, Ducheny, Dutra, Firebaugh, Florez, Gallegos, Hertzberg, Honda, Jackson, Keeley, Knox, Kuehl, Lempert, Longville, Lowenthal, Mazzoni, Migden, Nakano, Papan, Reyes, Romero, Scott, Shelley, Steinberg, Strom-Martin, Thomson, Torlakson, Vincent, Wayne, Wesson, Wildman, Wright, Villaraigosa NOES: Aanestad, Ackerman, Ashburn, Baldwin, Bates, Battin, Baugh, Briggs, Campbell, Cox, Dickerson, Frusetta, Granlund, Havice, House, Kaloogian, Leach, Leonard, Machado, Maddox, Maldonado, Margett, McClintock, Olberg, Oller, Robert Pacheco, Pescetti, Runner, Strickland, Thompson, Zettel NOT VOTING: Brewer, Calderon, Cunneen, Floyd, Rod Pacheco, Soto, Washington, Wiggins RJG:kb 9/5/99 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****