Numerous changes in various sections of the Codes will have an impact on law firms managing their staff during 2000. This presentation will try to identify the most significant changes, and this presentation will focus on issues that directly impact on management / employee relations. Some material focuses on changes that occurred prior to 2000, but which will only see their most dramatic affects in 2000.

The California Fair Employment & Housing Act (FEHA) is the statute governing discrimination on the basis of race, national origin, ethnicity, color, sex, religion, marital status, age, physical and mental disability, and medical condition. Govt. Code §12940 et seq. For 1999, the Legislature added a new definition of “medical condition,” and for 2000 the Legislature decided to add the protected status of sexual orientation. Govt. Code §12940(a)

The FEHA subjects law firms with at least one employee to the FEHA's requirements regarding all forms of “harassment.” The form of harassment that has received the most press in recent years is sexual harassment. All firms with one or more employees should note that they are also prohibited from harassing employees based on more obscure sections of the FEHA, such as pregnancy status harassment, HIV harassment, and sexual orientation harassment. Govt. Code §12940(h).

Under the newly amended FEHA, harassment on the basis of sexual orientation now violates public policy. Govt. Code §12920.

Harassment based on sexual orientation, as well as failure to take all reasonable steps to prevent such harassment, by law firms employing even one employee is now prohibited. Govt. Code §12940(h)(I).

Discrimination based on sexual orientation, for law firms with at least five employees during at least 20 consecutive weeks of a year, is now prohibited. Govt. Code §12926(d), 12940(a).

Law firms automatically violate the Government Code when they fail to post the Department of Fair Employment & Housing's poster which states that sexual harassment, sexual orientation harassment, and other forms of discrimination are illegal, and how to file a discrimination complaint against the law firm with the Dept. of Fair Employment and Housing. Govt. Code §12950.

Discrimination based on sexual orientation, for those who offer housing for sale or for rent, or by advertisers for housing, or by those who aide and abet either of those functions, including law firms, are low liable for any form of housing discrimination based on sexual orientation. Govt. Code §12955(a)(g).

In Marks v. Loral Corp. (1997) 57 Cal.App.4th 30, the Court of Appeals decided that California employers with at least five employees are entitled to discriminate on the basis of age, when that discrimination was the result of a preference for workers with lower salaries, and that preference resulted in hiring younger workers. The California Supreme Court declined to review the case, and the concept of “salary as a proxy” for age discrimination became California law. In short, every employer who offered a defense that it selected younger workers because they were cheaper, was entitled to a jury instruction that such a selection process did not constitute age discrimination.

For 2000 the Legislature has expressly overruled Mark v. Loral, and indicated that employers of five or more employees may no longer use lower salaries as an excuse to hire younger workers. Govt. Code §12941.1

Prior to 2000, the maximum amount the Dept. of Fair Employment and Housing could assess as compensatory damages and penalties was $50,000. Beginning in 2000, the damages assessment limit has been increased to $150,000. Govt. Code §12970(a)(3).

Beginning in 2000, sexual, and other forms of harassment, of “persons providing services pursuant to a contract” is now prohibited. Govt. Code §12940(h)(3)(4). Such harassment is now prohibited in the same manner that sexual, and other forms of harassment, are prohibited against employees. For law firms which mistakenly treat paralegals, paid interns, and paid law clerks as “independent contractors,” this new Government Code section protects such persons.

In December, 1999 the California Supreme Court held that individual employees who are merely coworkers of, and not supervisors over, plaintiffs alleging sexual harassment, are not liable individually for their own sexual harassment. The good news for employers is that they no longer need to defend lawsuits by employees against co-employees. The bad news is that since employees may not be individually liable for their own harassment, the employer bears the full burden of all actual, compensatory, and punitive damages at this point. Carrisales v. Department of Corrections (1999) 21 Cal.4th 1132.

Despite this decision, law firm supervisory personnel are still liable for their sexual harassment against subordinates. Reno v. Baird (1998) 18 Cal.4th 640.

And the Legislature has expanded the definition of “supervisor” to include all persons who conceivably have the authority to make recommendations regarding hiring, firing, etc., not simply those who complete the hiring, firing, etc. Govt. Code §12926(q).

For 2000 the law regarding professional relationship sexual harassment has been strengthened and clarified. Whereas in the past, many believed that only coerced sexual activity with clients was proscribed, the new law makes clear that verbal, visual, and physical conduct are now prohibited, and the full range of remedies for other types of sexual harassment are now available. Civil Code §§ 51.9, 52; Assembly Bill No. 519. For attorneys who also function as real estate agents, the law applies equally to them in relationships with their real estate clients. For attorneys who function as landlords, the law also applies to protect their tenants. Civil Code §§ 51.9, 52.

In short, the full breadth of the definition of “sexual harassment” that exists under employment law, now applies to professional relationships that attorneys establish in California.

In California, whether an employer has a sick leave policy, paid or unpaid, is an employer option. No law requires smaller private law firms to have a paid sick leave policy.

Larger law firms, i.e. those with 50 or more employees within a 75 mile radius, are required to comply with the requirements of the California Family Rights Act and federal Family Medical and Leave Act. Govt. Code §12945.2 and 29 U.S.C. §2101, respectively.

Beginning in 2000, smaller law firms that have sick leave policies, must make at least one-half of the sick leave time available for employees to use when a child, spouse, or parent is ill. Labor Code §233. This new rule applies to small law firms who are not already covered by CFRA and FMLA.

For victims of domestic violence, 2000 provides a new statute that prohibits employers, including law firms, from discriminating against employees who take time off for the purpose of obtaining a TRO, restraining order, or any other legal relief. The new statute protects employees when they are seeking this legal relief for themselves or a child from any type of domestic violence. Employers may not prohibit employees from using their vacation, compensatory time, or personal leave time toward the hours missed for this type of legal activity. Labor Code §230.

The Cal-COBRA (California Continuation of Benefits Replacement Act) statute controls California law firms with two to 19 employees. Calif. Health and Safety Code §1366.20 et seq. In some respects, that statute is similar to the federal COBRA statute, but the two are not totally in agreement.

Beginning in 1998, law firms must assist their respective insurance carrier by giving notice to the carrier of any qualifying event that would result in loss of coverage of an employee or a beneficiary under the group plan. The law firm must provide notice within 31 days of the qualifying event. Qualifying events are same as federal COBRA, except that an employer's bankruptcy is not included as a qualifying event.

In an en banc reversal of its earlier decision, the Ninth Circuit has held that employers violate the federal Fair Labor Standards Act's retaliation provisions when they discriminate in any fashion against employees who complain, only internally, that their wages are not in conformance with the law. Lambert v. Ackerly, 180 F.3d 997 (9th Cir. 1999). Prior to this decision, the Ninth Circuit had held that the FLSA only proscribed discrimination against workers who filed complaints under the FLSA, participated in investigations under the FLSA, or engaged in other activity directly related to the complaint or investigation processing. Now, California employers must be aware that they may be violating federal law when they take any action against employees who suggest that they are unhappy about their wages because they do not believe the wages are “proper” under the law.