A bill that would have granted expansive liability to sue California employers has been rejected in a veto by Gov. Gavin Newsom, but not without a concentrated business coalition effort that questioned how a bill with such sweeping language could even make it to the governor’s desk.
AB 524 from Assemblymember Buffy Wicks, D-Oakland, would have created a new protected class under California’s Fair Employment and Housing Act (FEHA), that could sue based on status as family caregivers. The bill involved special accommodation provisions that were unclear, said Ashley Hoffman, a labor and employment policy advocate with the California Chamber of Commerce.
And if the legislature was to consider future proposals that are similar, it’s important to acknowledge how such bills can impact small businesses, Hoffman said.
Ashley Hoffman
| California Chamber
“It can be important to really understand whether the bill can actually be implemented and what does enforcement look like," Hoffman said.
"Would it put businesses in a position where, even if they made a good faith error, or had a good faith dispute as to how something should be interpreted, could it open them up to litigation costing them hundreds of thousands of dollars,” Hoffman said.
And AB 524’s reliance on the special accommodation term – one not usually seen in labor laws – raised concerns about all-encompassing liability for an employer resulting from a plethora of possible family situations.
The costs of litigation under such statutes can be upwards of $160,000 per lawsuit.
“So it was a considerable potential litigation exposure, especially for smaller businesses that are not as well steeped in labor law or don't have a team of attorneys,” Hoffman said.
Newsom’s veto message read: “I am returning Assembly Bill 524 without my signature. This bill would add ‘family caregiver status’ as a characteristic protected under the Fair Employment and Housing Act 's employment provisions. During my tenure as Governor I have consistently advanced policies to help parents and families, including expanding paid family leave and increasing the state's investment in childcare. While I appreciate the intent of this bill, I am concerned about the large burden it will place on employers, particularly small businesses, especially given the ambiguous nature of the language. Although the bill does not require employers to provide ‘special accommodations’ based on ‘family caregiver status,’ it is not clear what types of acts would constitute unlawful discrimination and what types of acts would be lawful denials of ‘special accommodations.’ Given this ambiguity, this bill would be difficult to implement and lead to costly litigation for employers in California. For these reasons, I cannot sign this bill.”
The Assembly Analysis shows AB 524 was supported by California Employment Lawyers Association and other attorney advocacy groups.
Every year in California, there are quite a few labor-related mandates or bills that are passed and 2023 was no exception, Hoffman said.
“And when you look at it as a whole, it can often be very difficult for a smaller business to operate in California," Hoffman said. "It’s such a lengthy and complex – not only labor code – but the Employment and Housing Act – so I think this was a good message to the business community that there is an understanding of the difficulty about the risk of litigation for even one small misstep and about how the law should be interpreted."
“It serves as an acknowledgement to the business community that there is difficulty often in complying with these kinds of laws, and that when there's a high risk of litigation, that's something that the government should be very mindful of before enacting these types of bills.”