On October 3, 2017, California Governor Jerry Brown signed Senate Bill 306 into law. This new law, which goes into effect on January 1, 2018, amends California Labor Code section 98.7 and adds Sections 98.74, 1102.61, and 1102.62 to the California Labor Code. These changes add significant protections to employees who file wage-related retaliation and whistleblower claims and make it more difficult for an employer to defend itself against allegations that it retaliated against an employee for making wage claims.
What exactly does the new law do?
Most importantly, the new law makes it easier for employees and the California Labor Commissioner to obtain injunctive relief (a court-ordered remedy that requires an employer to specifically do something – like reinstatement of a discharged employee) in wage-related retaliation cases and potentially requires employers to reinstate discharged employees before an employer can fully defend itself against the allegations.
Under existing law, the Labor Commissioner has the authority to seek any appropriate relief (including injunctive relief) in retaliation cases, but only after it has investigated a claim and determined that unlawful retaliation has occurred. This changes under the new law.’
Under the new law, the Labor Commissioner has the ability to petition the court for such relief “during the course of an investigation”. In other words, the Labor Commissioner will be able to go to court to obtain injunctive relief before an investigation has been completed and any finding of violation has been made. In addition, the new law also allows employees to petition the superior court for injunctive relief in whistleblower claims.
But that isn’t all. The new law also greatly reduces the burden of proof for obtaining injunctive relief in these types of cases. Under the new law, injunctive relief can be obtain against an employer based on a mere showing that “reasonable cause exists to believe a violation has occurred.” In addition, courts are also instructed to consider “the chilling effect on other employees asserting their rights under those laws in determining if temporary injunctive relief is just and proper.” This is dramatically different from the typical standard for injunctive relief, which requires a showing that (1) the employee will suffer irreparable harm, (2) the employee will likely succeed on the merits, and (3) the employee’s interests outweigh the employer’s.
Investigation of Retaliation Claims
The new law also authorizes the Labor Commissioner to begin an investigation into alleged wage-related retaliation “with or without receiving a complaint” from an employee. In other words, if the Labor Commissioner suspects that retaliation has occurred during adjudication of a wage claim, during a field inspection, or in instances of suspected immigration-related threats, it may proceed with an investigation without first receiving an employee complaint.
New Retaliation Enforcement Process
The new law also dramatically changes the Labor Commissioner’s citation process for the enforcement of claims of retaliation and discrimination.
Under existing law, the Labor Commissioner can only enforce its retaliation determinations via civil action (i.e. by going to court). However, under the new law, the Labor Commissioner can simply issue a citation directing the employer to cease the violation and take actions necessary to remedy the violation. It is then up to the employer to challenge the citation through the legal process (administrative proceeding and court appeal).
The appeal process has also changed. Under existing law, the employer can appeal the Labor Commissioner’s determination to civil court for a trial de novo (a new trial). However, under the new law, the employer is required to file a writ of mandate with the superior court and post a bond equal to the total amount of back pay allegedly owed.
Finally, the new law imposes increased penalties on employers if the Labor Commissioner wins on its enforcement action. First, the Labor Commissioner can recover reasonable attorney’s fees. In addition, if an employer willfully refuses to comply with an order of the court to hire, promote, or restore an employee, or refuses to comply with an order to post a specified notice, shall be subject to a civil penalty of $100 per day of noncompliance, up to $20,000. This penalty is paid to the affected employees.
Take home for employers
This new law should incentivize California employers to make careful and well-reasoned disciplinary and discharge decisions as well as to thoroughly-document those decisions for every employee. The penalty for failure can be extremely costly — as evidenced by this new law.