Brown signs a pair of major #MeToo bills but vetoes another one

SACRAMENTO -- Writing that it "plainly violates federal law," Gov. Jerry Brown used one of the final vetoes of his career on AB 3080, a bill that would have banned mandatory arbitration as a condition of employment.

Brown did sign several bills important to labor groups and the #MeToo movement.

"I think we have a lot to celebrate today," said Wendy Musell, board chair of the California Employment Lawyers Association and a partner with Stewart & Musell LLP in Emeryville.

Two of the biggest are SB 820, banning secret settlements in sexual harassment cases, and SB 1300, which makes numerous changes related to sexual harassment cases and the "severe or pervasive" standard.

SB 820, authored by state Sen. Connie Leyva, will force employers to make significant changes in how they operate, said David D. Kadue, who defends employers as a partner at Seyfarth Shaw. Not all of those changes will be what Democrats envisioned.

"Note that a pre-litigation settlement of a sexual harassment internal complaint is not covered," Kadue wrote in an email. "This overall context should provide greater incentives to complainants [and their attorneys] to seek settlements before any formal proceeding is filed."

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Several attorneys representing employees pointed to SB 1300 as one of the most comprehensive labor bills Brown signed.

As introduced in February, it modifies the legal standard for showing harassment and prohibits employers from requiring workers to sign a non-disparagement or release of liability agreement as a condition of employment or promotion.

It later picked up provisions barring a prevailing defendant in an employment case from recovering attorney fees unless the case is shown to be frivolous and clarifying that employers could be held liable for the conduct of non-employees, such as contractors.

Toni Jaramilla is an employment attorney who advised SB 1300's author, Sen. Hannah-Beth Jackson, D-Santa Barbara. She called the bill "profound" even though it didn't get as much attention as several other employment measures.

"A lot of employees are afraid to come forward and invoke their rights under the justice system under the fear that if they don't prevail, they are going to be hit with huge attorney fees by the defendants," said the founder of Toni Jaramilla APC in Los Angeles.

Jaramilla said SB 1300 was inspired in part by an arbitration case she filed against American Apparel Inc. and former CEO Dov Charney. The bill also states the "Legislature hereby declares its rejection" of Brooks v. City of San Mateo, 229 F.3d 917 (9th Cir. 2000) by declaring "a single incident of harassment creates a triable issue."

It instead affirms several other court cases, notably "the standard set forth by Justice Ruth Bader Ginsburg in her concurrence in Harris v. Forklift Systems (1993) 510 U.S. 17." But Brown again showed his distaste for wading into litigation by rejecting AB 3080. In his veto message, he wrote, "States must follow the Federal Arbitration Act and the Supreme Court's interpretation of the act." He cited a 2015 Supreme Court ruling reiterating that the act trumps state law.

Cliff Palefsky is a partner with McGuinn Hillsman & Palefsky in San Francisco who has worked for years to help pass legislation limiting forced arbitration in California. He said Brown's veto was no surprise, but said the governor's logic was incorrect.

"There has never been a preemption case in the absence of an executed agreement," he said, which employers would not have under AB 3080. He added he hoped Brown would be interested in testing the political waters.

"The issue of preemption is potentially only one election away from being fixed," Palefksy said. "It has been a part of the Democratic platform."

The California Chamber of Commerce had warned repeatedly that AB 3080 would be federally preempted. The group declined to comment on how they might respond if a nearly identical bill came back next year.

But business groups will face a new governor next year. Democrat Gavin Newsom holds a 12 point lead over Republican John Cox in the latest Public Policy Institute of California poll.

Newsom is widely seen as more liberal than Brown. His campaign did not reply to an email seeking comment on whether he would sign a bill to end forced arbitration.

But Newsom's wife, filmmaker Jennifer Siebel Newsom, said in August that her husband likely would sign a bill similar to AB 3080. Appearing next to Jane Fonda at a press conference in support of several employment-related bills, she said the idea "sounds like this is good for women and families."

Musell said she "looks forward" to finding out where Newsom stands, but said it has been a great year for her side anyway.

"I think we showed California is still the leader when it comes to equality in the workplace," she said.