The Washington Legislature and the U.S. Congress passed new laws recently in the wake of the #Me Too movement.
Gov. Jay Inslee signed three bills into law on March 21. Each of those will take effect on June 7. The federal law, concerning tax deductions, is already in effect.
The first state law, Senate Bill 5996, prohibits employers from requiring employees to sign nondisclosure agreements as a condition of employment if the NDA has the purpose or effect of preventing the employee from disclosing or discussing sexual harassment or sexual assault that occurs in the workplace. The law precludes any agreement that prevents employees from disclosing or discussing sexual harassment or assault occurring at company events, including after-hours get-togethers between co-workers or a worker and his or her supervisor. In other words, any NDA that prospectively prohibits an employee from discussing or reporting sexual harassment occurring at work, work parties, or after-work social gatherings are void as against public policy. Similarly, the new law makes it unlawful for an employer to retaliate against an employee who reports sexual harassment or assault occurring under those scenarios.
The new law incorporates the definition of “sexual assault” from Washington’s criminal statutes, meaning any “sexual contact” or behavior that occurs without the explicit consent of the recipient. For purposes of the statute, “sexual contact” means any touching of the sexual or other intimate parts of a person done for the purpose of gratifying sexual desire of either party or a third party.
“Sexual harassment” under the new law means unwelcome sexual advances, requests for sexual favors, sexually motivated physical contact, or other verbal or physical conduct or communication of a sexual nature if: submission to that conduct or communication is made a term or condition of employment; submission to or rejection of that conduct or communication affects the recipient’s employment; or if such conduct or communication substantially interferes with one’s work performance, or creates an intimidating, hostile, or offensive work environment.
Under Washington state’s version of the federal Civil Rights Act, sexual harassment doesn’t have to be sexually motivated or charged. It need only be motivated by one’s gender, such as in cases where a male-dominated workplace may not welcome female co-workers because the men believe women don’t belong.
Additionally, the new state law’s NDA provisions don’t apply to settlement agreements between an employer and employee that resolve claims alleging sexual harassment, permitting employers to include confidentiality provisions in such agreements.
However, employers should be aware that the federal government recently took aim at such secret settlements through financial disincentives. Dubbed the “Harvey Weinstein Tax,” Congress in December 2017 amended the tax code to prohibit “ordinary and necessary” business expense deductions for “any settlement or payment related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement.” Attorneys’ fees related to such an NDA agreement are also no longer deductible as a business expense. The change applies to settlement amounts paid or incurred after Dec. 22, 2017.
The second state bill signed into law in March is Senate Bill 6471. That law requires the Washington Human Rights Commission to establish a work group to develop model policies and best practices for employers to prevent workplace sexual harassment. Those policies are to be posted on the commission’s website for public use by Jan. 1, 2019. Within 30 days of that date, the Washington state Department of Labor and Industries must also post the model policies and best practices prominently on its website.
The third new gender-based law is House Bill 1506. Since 1943, the Washington Equal Pay Act has prohibited employers from paying female employees a lesser wage than “similarly employed” males. HB 1506 updates and expands the Equal Pay Act, effective June 7.
HB 1506 replaces the Equal Pay Act’s sex-specific nouns and pronouns with the term “gender,” ensuring gender-based pay discrimination is unlawful regardless of the sex or gender of the negatively impacted employee. HB 1506 also expands prohibited discrimination from “wages” to other forms of “compensation,” which broadly includes any “discretionary and nondiscretionary benefits” an employer provides employees “as a result of employment.”
Whether employees of different genders are considered “similarly employed” under the Equal Pay Act requires a fact-specific analysis, evaluating whether the jobs’ performance requires similar skill, effort, and responsibility, and whether the jobs are performed under similar working conditions. Job titles alone aren’t determinative.
For any compensation differential between such similarly employed workers, HB 1506 appears to presume discrimination unless the employer proves the differential is in good faith and based “on a bona fide job-related factor or factors” that are consistent with business necessity, aren’t based on or derived from a gender-based differential, and account for the entire differential. Such factors include, but aren’t limited to: education, training, or experience; a system addressing or measuring seniority, merit, or earnings by quantity or quality of production; or bona fide regional differences in compensation levels, including local minimum wage laws.
HB 1506 also digs deeper into asserted roots of pay inequity by prohibiting employers from limiting or depriving employees of “career advancement opportunities” based on gender. The law doesn’t define this potentially expansive term, but earlier legislative reports suggest failing “to announce opportunities” or failing to “provide training that is under the employer’s control” as possible examples.
Taking cue from existing federal labor laws, HB 1506 also precludes employers from forbidding employees to share their wage information or requiring employees to sign any document preventing an employee from disclosing such information. Accordingly, employers must scrutinize confidentiality policies or nondisclosure agreements for offending provisions. However, employers may prohibit employees with special access to others’ compensation information, such as payroll personnel, from disclosing such information to those without such access.
Employers can’t discharge or retaliate against an employee for inquiring about wages or lack of advancement opportunities; disclosing, comparing, or otherwise discussing wages; or for aiding others to exercise Equal Pay Act rights.
Finally, HB 1506 expands remedies for Equal Pay Act violations. Employees may file a complaint with Labor & Industries for investigation and enforcement—but aren’t required to do so—and may instead bring a private suit against the employer directly.
Many of the expanded Equal Pay Act protections and remedies already were enforceable through existing state and federal laws prohibiting pay secrecy or gender-based discrimination, such as the Washington Civil Rights Act. But recent Equal Pay Act amendments serve as additional reminders that national and local focus on remedying gender-based workplace disparity is here to stay. Employers should take heed and review their workplace policies and practices for potential concerns, including considering whether to do so within the protection of attorney-client privilege.
Sexual and other forms of harassment aren’t just unlawful in the employment setting; businesses open to the public can also be found directly liable for the actions of their employees towards customers. On Oct. 9, 2017, Division 1 of the Washington Court of Appeals in the case entitled, Floeting v. Group Health Cooperative, issued a decision holding that businesses can be liable for the harassment of their customers by their employees along with the offending employee. The holding applies to all places of public accommodation, which include business establishments open to the public for the sale or provision of goods or services, such as grocery stores, movie theaters, shopping malls, barber shops, libraries, hospitals, restaurants, hotels, and sports or recreation facilities.
The decision fundamentally alters such businesses’ responsibility in terms of protecting persons who patronize their establishments. Prior to this decision, a business typically could be liable only for acts of its employees if the acts were done in furtherance of their company’s business or was done within the scope of their employment.
Under the Floeting decision, however, these business proprietors automatically will be liable directly for acts of harassment and discrimination by their employees, whether or not it’s known or suspected. These businesses should enact strong and clear policies proscribing all forms of harassment or discrimination against customers immediately and take swift action to enforce them.
William M. Symmes is chairman of the Labor & Employment Group at the Witherspoon Kelley law firm in Spokane. Amy Mensik is a member of the group. The group’s webpage is http://www.witherspoonkelley.com/labor-employment.
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