"New Perceptions--
Sexual Orientation Bias And Other Provisions Added To FEHA"
by John J. Manier

Earlier this month, Gov. Gray Davis signed AB 1001 and AB 1670. These two bills will significantly expand the scope of California's Fair Employment and Housing Act (FEHA) when they take effect on January 1, 2000. AB 1001 adds sexual orientation to the categories of discrimination prohibited under FEHA, while AB 1670 includes a potpourri of new substantive and remedial provisions under the catch-all title of "California Civil Rights Amendments of 1999."

Surprisingly, these two bills have attracted relatively little public attention. This is particularly ironic in the case of AB 1001, authored by Assembly Speaker Antonio Villaraigosa (D-Los Angeles), which culminated several years of efforts by gay rights groups to amend the FEHA to prohibit discrimination based on sexual orientation.

Notably, a predecessor version of AB 1001 was the subject of heated public debate in 1991. That bill passed the Legislature, but was vetoed by then-Gov. Pete Wilson, a move which was met with televised protest marches and even a brief drive to recall Wilson from office.

One year later, Wilson signed a compromise bill adding Labor Code ? 1102.1 to expressly prohibit sexual orientation bias in employment. This did not stop legislative attempts to add sexual orientation bias prohibitions to FEHA, but it had the effect of diverting public attention from the issue. Indeed, Gov. Davis did not publicly announce his position on AB 1001 until he signed the bill.

Despite the lack of fanfare surrounding its enactment, AB 1001 will markedly enhance California's prohibition against sexual orientation discrimination. The bill expressly repeals Labor Code ? 1102.1, but also states that all employment practices outlawed under that provision remain unlawful under FEHA. In effect, AB 1001 places sexual orientation bias on an equal footing with illegal discrimination based on race, sex, age, religion, disability and other factors enumerated in FEHA. For the first time, the law also expressly prohibits harassment based on sexual orientation.

Under AB 1001, persons who allege sexual orientation bias will be able to file a complaint with the California Department of Fair Employment and Housing, rather than with the Labor Commissioner under the former law. The time limit for filing such charges is one year from the alleged discriminatory act - considerably longer than the 30-day deadline under the Labor Code. Employees who successfully file suit for sexual orientation discrimination now may recover attorneys' fees and compensatory and punitive damages under FEHA. By contrast, Labor Code ? 1102.1 contained no attorney fee provision, and tort damages were possible only for claims of "public policy" wrongful discharge based on sexual orientation bias under Leibert v. Transworld Systems, 32 Cal. App. 4th 1693 (1995).

AB 1001 also expressly defines "sexual orientation" to encompass "heterosexuality, homosexuality and bisexuality." No such definition was included in Labor Code ? 1102.1. Instead, that section simply codified the California Supreme Court decision in Gay Law Students v. Pacific Telephone & Telegraph, 24 Cal. 3d 458 (1979), which classified sexual orientation as protected "political activity" under Labor Code ? 1102. This raised questions as to whether the Labor Code even prohibited job bias based on heterosexuality, which is not ordinarily associated with "political activity." However, AB 1001 does not contain the phrase "political activity," and its neutral definition of "sexual orientation" appears designed to refute the notion that the bill creates "special rights" for homosexuals.

Under AB 1670, the reach of FEHA's job bias provisions will be expanded to include the mere "perception" that a person has any of the characteristics protected under the law, or that the person is "associated with" one who has, or is perceived to have, such characteristics. Taken to its extreme, this provision arguably outlaws job bias against anyone perceived to be associated with a person who is perceived to have one or more enumerated characteristics. These expansive protections are sure to engender a new array of litigation claims against employers.

AB 1670 also prohibits employers from "directly or indirectly" subjecting employees, applicants or other persons to testing for genetic characteristics. This further expands the prohibition against job bias based on genetic characteristics which was added to FEHA effective January 1, 1999.

In addition, AB 1670 requires employers to grant requests for reasonable accommodation made by an employee, on the advice of her health care provider, for pregnancy, childbirth or related medical conditions. The bill notes that FEHA previously allowed employers to deny the accommodation requests of pregnant employees.

In the workplace harassment context, AB 1670 adds a definition of "supervisor" that is virtually identical to the broad definition of the term under the National Labor Relations Act, 29 U.S.C. ? 152(11). Under FEHA, an employer may be liable for harassment committed by a non-supervisory employee if a supervisor knew or should have known of the harassment and failed to take immediate and appropriate corrective action. Gov't Code ? 12940(h)(1). In addition, the Court of Appeal has held that supervisors may be held personally liable if they commit harassment in violation of FEHA, and that employers are strictly liable for the supervisor's behavior. Matthews v. Superior Court, 34 Cal. App. 4th 598 (1995); Kelly-Zurian v. Wohl Shoe Co., 22 Cal. App. 4th 397 (1994). AB 1670 defines "supervisor" to include any individual with authority "to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees." The definition also encompasses any individual with responsibility to "direct" employees, "or to adjust their grievances, or effectively to recommend that action." However, the exercise of the individual's authority must require "the use of independent judgment." According to AB 1670, this definition of "supervisor" is declaratory of existing law.

AB 1670 also extends FEHA's anti-harassment provisions to independent contractors by stating that the law protects any "person providing services pursuant to a contract." This term is defined by reference to existing legal factors for ascertaining independent contractor status. See, e.g., Labor Code ? 2750.5. Previously, FEHA did not apply in any manner to independent contractors. That will no longer be true in the harassment context. However, AB 1670 does not similarly expand the other anti-bias provisions of FEHA to apply to independent contractors.

On top of these substantive amendments, AB 1670 significantly enhances the remedial provisions of FEHA. The bill triples the maximum amount of damages that the Fair Employment and Housing Commission may award for nonpecuniary loss and administrative fines, from $50,000 to $150,000 per aggrieved person. Moreover, in litigation cases under FEHA, the "costs" recoverable by the "prevailing party" will now include expert witness fees. Courts may additionally order employers to conduct training of their employees, supervisors and management as to the requirements, rights and remedies under FEHA and "the employer's internal grievance procedures." Such training can be quite expensive, particularly if outside consultants must be hired.

Conspicuously absent from AB 1001 and AB 1670 - as well as the other 1,052 laws signed by Gov. Davis this year - is any additional protection for law-abiding employers against frivolous lawsuits. AB 1001 and AB 1670 provide the latest in a long line of incentives for employers to adopt, implement, update and adhere to strict policies against the ever-expanding categories of employment practices prohibited under FEHA. The potential risk of loss has never been greater for employers who do not have adequate anti-bias policies, or fail to enforce them.

John J. Manier, a senior-level associate with Ballard Rosenberg & Golper in Universal City, represents management in employment litigation in appellate and trial courts.