Key Takeaways:

• AB 9 extends the statute of limitations from one year to three years for all employment claims brought under FEHA—not just sexual harassment claims

• AB 9 triples the statute of limitations, meaning employers will need to review their retention policies to ensure accurate recordkeeping for the appropriate timeframe

• AB 9 provides that it does not apply to previously lapsed claims, but the bill leaves unanswered how claims that arose in 2019 should be treated—employers must be prepared to argue on the inapplicability of AB 9

Last year, the #MeToo movement spurred the California Legislature into introducing a slate of new bills–one of the latest is California Assembly Bill 9 (AB 9), which Gov. Gavin Newsom signed into law on October 10, 2019. AB 9 is a new employment law that, effective January 1, 2020, will triple the existing statute of limitations period for employees to file a claim with the California Department of Fair Employment and Housing (DFEH) after an alleged violation.

The California Fair Employment and Housing Act (FEHA) makes unlawful any discrimination, harassment, and retaliation based on protected characteristics in the workplace. Currently, if there is a violation, FEHA allows an aggrieved employee up to one year to file a charge with the DFEH. The department will then either resolve the case or issue a notice of right to sue, after which time, the employee would have an additional year to file an action in court.

With the rise of the #MeToo movement, however, there was a push to reconsider and extend the one-year statute of limitations. In an Assembly Floor Analysis prior to the passing of AB 9, supporting members explained their rationale:

The #MeToo movement has brought attention to many of the dynamics related to sexual harassment. In particular, many victims have shared that they need ample time to fully grasp what happened to them before they felt comfortable coming forward. In addition, the fear of retaliation often prevented victims from being able to report incidents of sexual harassment. These barriers are not limited to sexual harassment. Victims of all forms of discrimination and harassment may be initially unclear about what happened, unaware of their rights, or reluctant to report misconduct to their boss.

To address these barriers, AB 9 will extend the timeline for aggrieved employees to file a FEHA complaint with DFEH from one year from the date of the violation to three years, which does not include the additional year post-DFEH statutory period to file a lawsuit. This poses a number of implications for employers:

1. While the primary push for this bill was to improve sexual harassment prevention policies, employers must note that this law applies to all employment claims brought under FEHA–not just sexual harassment claims.
2. Tripling of the statute of limitations means tripling the time period during which records may be lost, memories forgotten, workforce replaced, etc. Given that employers may now find themselves defending against a case in which the subject incident occurred four years prior to the civil action, employers will need to review their retention policies to ensure accurate recordkeeping for the appropriate timeframe.
3. This bill clearly states that it does not apply to lapsed claims (i.e., claims in which the one-year statute of limitation ends prior to the effective date of January 1, 2020). However, it does not address how cases that arise in 2019 (cases that arose prior to the effective date, but would not be lapsed by the effective date) will be treated. Employers facing such claims must be prepared to argue on the inapplicability of AB 9 on such cases.

For further questions on AB 9, or to get advice on how your business can successfully navigate this transition period, please contact:

• Caroline J. Berdzik
• Peter J. Woo
• Erica B. Row