Tech Employers Be Ready: Understanding Changes to California's Harassment and Hostile Work Environment Laws

• Publication year: 2019
• Author: Carolynn Beck, Craig Bolton, and Andrew J. Pecoraro

Tech Employers Be Ready: Understanding Changes to California's Harassment and Hostile Work Environment Laws

Carolynn Beck, Craig Bolton, and Andrew J. Pecoraro¹

Carolynn Beck is Co-Managing Partner of Pierce Bainbridge Beck Price & Hecht's Washington D.C. office and the firm's general counsel. Her experience includes complex business litigation, general liability, and wrongful termination. Carolynn is a co-chair of the Military & Veterans network for the National Asian Pacific American Bar Association.

Craig Bolton is partner at Pierce Bainbridge Beck Price & Hecht LLP. Craig has extensive experience representing plaintiffs and defendants in business litigation, intellectual property disputes, and employment cases. Craig also counsels clients on strategies to resolve disputes prior to litigation.

Andrew J. Pecoraro is an associate at Pierce Bainbridge Beck Price & Hecht. Andrew previously served as a law clerk to the Honorable Barbara Milano Keenan at the U.S. Court of Appeals, Fourth Circuit and to the Honorable Leonie M. Brinkema at the U.S. District Court for the Eastern District of Virginia.

The advent of the #MeToo movement has sparked heightened awareness of sexual harassment in the workplace. People now feel motivated to speak out against seemingly entrenched workplace behaviors and attitudes that tolerate or dismiss incidents of sexual harassment. Lawmakers throughout the United States have responded with new legislation, including laws that reflect a reconsideration of the prevailing standards for hostile work environment claims.²

California recently enacted a number of changes to its Fair Employment & Housing Act (FEHA).³ These changes are intended to lower the burden of proof for a plaintiff to demonstrate the existence of a hostile work environment and to hold employers to their duty to prevent harassment and discrimination by strengthening the requirements for the provision of sexual harassment training in the workplace. This article reviews some of the notable changes enacted by the legislature and discusses their probable effect on employers. In particular, the article focuses on recommendations for technology companies,⁴ many of which, as a result of documented gender gaps, may feel the effects of the new laws more severely than those in other industries.

I. The Tech Industry Skews Predominately Male

For decades, women have had limited opportunities in the technology industry. In 2018, despite making up more than 57% of the country's professional workforce, women held only about 26% of professional computing occupations.⁵ In the video game industry, 74% of workers identified as male and only 21% identified as female,⁶ and this ratio has held steady for years.⁷

Statistics at the leadership level are even more dismal. As of the beginning of 2019, half of technology startups did not have any women on their leadership teams,⁸ and only 40% of companies with women in leadership roles included at least one woman on the board of directors. Even among top Silicon Valley companies, women make up only 18% of directors or executives.⁹ Similarly, women in technology are awarded far less in equity compensation than their male counterparts — according to a study conducted by the software platform Carta, female employees earn just 47 cents of equity for every dollar of equity male employees earn.¹⁰ And, as recently as 2017, "only about 6% of senior venture capitalists were women (down from 10% since 1999) and just 2.7% of venture-backed startups had female CEOs," according to studies by Babson College and Columbia University.¹¹

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These dramatic gender differences have led to real-world problems involving harassment. A study by the Pew Research Center reports that women in majority-male workplaces are significantly more likely than women in other workplaces to experience sexual harassment and gender discrimination.¹² Indeed, the tech industry has the second highest rate of sexual harassment by industry.¹³

Similarly, more than one-third of women employed in big tech companies have either experienced or witnessed sexist acts or overt sexual harassment within the last year.¹⁴ Nearly half of all female employees in technology jobs reported experiencing or witnessing harassment in the last five years.¹⁵ And these numbers may be lower than the numbers of actual incidents: nearly 70% of women acknowledged that they would not report incidents of harassment because "they wanted to forget or thought it would negatively affect their career."¹⁶

These troubling statistics should be of particular concern to tech employers. Under California law, an employer is strictly liable for sexual harassment committed by a supervisor, regardless of whether the employer knew about the conduct.¹⁷ Accordingly, it is imperative that tech employers understand recent changes in California law that may impact the cost and time for resolution of a discrimination claim in the event one is filed against their company.

II. Updates to California's Discrimination Laws

California first passed the predecessor to the FEHA in 1959. It originally prohibited discrimination in employment based on race, religion, color, national origin, and ancestry.¹⁸ Over the years, the FEHA has been expanded to protect employees from other forms of discrimination and harassment, including mistreatment based on age, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, sexual orientation, and military and veteran status.¹⁹ The FEHA expressly prohibits harassment, including sexual harassment, based on protected categories, and has done so for decades.²⁰

Traditionally, to establish a claim for a hostile work environment based on sexual discrimination, or for harassment, under the FEHA, a plaintiff must establish that:

1. He or she was the member of a protected group;
2. He or she was subjected to unwelcome behavior;
3. This behavior was "because of . . . sex;" and
4. The harassing conduct was "sufficiently severe or pervasive 'to alter the conditions of the [victim's] employment and create an abusive working environment.'"²¹

In 2018, however, Governor Jerry Brown signed a number of bills into law, each of which made certain statutory changes affecting the litigation of sexual harassment claims.²² The legislature also responded to some recent court decisions, clarifying its intent to provide greater protections for employees and to lower the burden for plaintiffs to prove hostile work environment claims.²³

Among the most notable amendments is that the legislature expressed its approval of the assertion in Justice Ruth Ginsberg's concurrence in Harris v. Forklift Systems²⁴ that a plaintiff need not prove that his or her productivity declined as a result of harassment to maintain a hostile work environment claim. Rather, the requisite standard is that a reasonable person subjected to the discriminatory conduct would find that the behavior "so altered working conditions as to make it more difficult to do the job."²⁵

Further, the legislature declared that a "single incident of harassing conduct is sufficient to create a triable issue regarding the existence of a hostile work environment,"²⁶ expressly rejecting the Ninth Circuit's holding in Brooks v. City of San Mateo.²⁷ In Brooks, the Ninth Circuit had recognized that a single incident could be sufficient to establish a hostile work environment, but held that "the incident must be extremely severe."²⁸In contrast, the California Legislature declared that the existence of a hostile work environment depends upon the totality of the circumstances. Under the new law, a stray discriminatory remark, "even if not made in the context of an employment decision or uttered by a nondecisionmaker," may be probative evidence of discrimination.²⁹

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A recent application of these principles comes from Doe v. Wells Fargo Bank, N.A.,³⁰ one of the few cases to apply the new law. In that case, the plaintiff had alleged a hostile work environment claim against his employer based primarily on a single lewd comment made by his supervisor.³¹ The plaintiff claimed that his employer and supervisor had discriminated against him by assigning him to lower-priority projects, not including him in meetings, and failing to provide him the same level of support as they did other employees.³² The employer argued that, with the exception of the single alleged comment, all of the plaintiff's complaints were mere personnel-management actions, and therefore the plaintiff had failed...