On October 3, 2017, Governor Jerry Brown signed Senate Bill 306 (Hertzberg – Van Nuys) as Chapter 460, which takes effect on January 1, 2018. This bill substantially changes the laws regarding employee retaliation actions and tips the scales in favor of employees.
Under SB 306, the Department of Labor Standards Enforcement (DLSE) is authorized to commence an investigation of an employer with or without a complaint having been filed if the DLSE suspects retaliation or discrimination during its wage claim or other investigation (including field inspections and suspected immigration-related threats) that the Labor Commissioner is conducting. The significant change in law by SB 306 is authorizing an investigation without a complaint being filed.
In addition, upon a finding of reasonable cause, the Labor Commissioner is authorized to petition a superior court for injunctive relief on a temporary or preliminary basis. This is a new standard, which is much lower than current law and unduly benefits employees. Under current law, a temporary order could not occur until after an investigation was completed and a determination was made of the employer’s liability. And, current law required a showing of irreparable harm and likelihood of success on the merits. SB 306 changes all of that.
Under SB 306, a court would be required to order appropriate injunctive relief based on a belief that a violation has occurred. The court must do so if it determines that such relief would be “just and proper.” This same section of law now also requires the court to “consider the chilling effect on other employees asserting their rights under those laws in determining if temporary injunctive relief is just and proper.” Again, these are new standards that will make it much easier for the Labor Commissioner or employee to obtain injunctive relief against the employer.
In a minor benefit to the employer community, the bill provides that injunctive relief under this new provision does not prohibit an employer from disciplining or terminating an employee for conduct that is unrelated to the claim of retaliation. But employers will need to document this action to ensure protection against liability.
Pursuant to SB 306, the Labor Commissioner is now authorized to issue citations directing specific relief to those determined to be responsible for violating the law. Under prior law, the Labor Commissioner pursued enforcement via a civil action. The Labor Commissioner is also entitled to reasonable attorney’s fees if it is a prevailing party in an enforcement action.
These new powers are intended to protect employees from retaliatory conduct by employers. However, with a lower standard to obtain injunctive relief, the employer community will have to watch the actions of the Labor Commissioner to determine whether the new powers are used in appropriate instances.
This bill represents a victory for organized labor in this state. The California business community offered many amendments to the bill to make it more palatable, but most of them were rejected. Their concern is that employees may be reinstated immediately, even if it takes 2-3 years to investigate and make a final determination of a business’ liability.