NOVEMBER 2001

I.
LEGISLATIVE UPDATE

Governor Gray Davis signed numerous bills into law that will create new challenges for both businesses and employees. The laws listed below will take effect on January 1, 2002:

• Domestic Partnerships (AB 25): AB 25 will allow a person to collect unemployment insurance if he or she leaves a job to relocate with a domestic partner. AB 25 also will allow domestic partners to use sick leave, as provided by the "kin care law," to attend to an ill domestic partner or child of a domestic partner.

• English Only Policies (AB 800): AB 800 will limit an employer's ability to adopt or enforce a policy requiring employees to speak only English in the workplace.

• Lactation Accommodation (AB 1025): AB 1025 will require employers to reasonably accommodate employees who wish to express breast milk at work, including increased break time and privacy.

• At-Will Exception (SB 20): SB 20 will prohibit at-will termination of janitors and building maintenance personnel under certain specified circumstances.

• Overtime Exemption (SB 1208): SB 1208 will create an overtime exemption for doctors paid on an hourly basis.

• Drug Testing (SB 871): SB 871 will place new requirements and penalties on motor carrier employers who are subject to Federal Department of Transportation Drug and Alcohol testing requirements, including triple damages if the driver injures someone.

• Garnishments (AB 1426): AB 1426 will add a new penalty for failure to comply with child support garnishments, and will allow court-ordered electronic transfer of garnishment from the employer's bank account.

• Temporary Nursing Staff (AB 1643): AB 1643 will place new requirements on employment agencies that provide temporary certified nurse assistants or licensed nurse staff long-term health care facilities, including background checks.

Please contact any member of Klinedinst's employment law team if you would like a copy of any of these new laws or wish to further discuss them. Employers should be certain to consult with legal counsel to ensure handbooks and policies will be current beginning January 1, 2002.

II.
JUDICIAL UPDATE

Employer Liable for Punitive Damages in Racial
Harassment Claim When Supervisor Did Nothing to Prevent Conduct

Troy Swinton ("the Plaintiff"), the only black employee in the workforce at the Potomac Corporation ("the Employer") was subjected to daily racial comments for a period of seven months. In Swinton v. Potomac Corp., the Ninth Circuit Court of Appeals recently upheld the $1 million punitive damage award in favor of the Plaintiff.

The court upheld the award, in part, because the racial comments were made in front of supervisors who did nothing to prevent the behavior. The Employer asserted the good faith defense, recently articulated by the United States Supreme Court, arguing that it could not be held responsible for punitive damages for a supervisor's failure to intervene. The Employer further argued that because it had a harassment policy in place it should be shielded from punitive damages. The Ninth Circuit rejected these arguments and held that the Employer could be held liable for punitive damages "through the inaction of even low-level supervisors, when the supervisors are responsible for receiving and acting on harassment." The Employer was unable to establish that anyone in the company did anything to combat the problem until officially informed by a state agency that the Plaintiff was asserting a racial harassment claim.

Employers should consider several steps in order to protect against a similar result. First, mandatory discrimination training for all employees on all of the protected classes, not just sexual harassment training, should be conducted. Second, employers should also ensure that harassment policies which explicitly state that racial jokes or jokes based upon any protected class will not be tolerated in the workplace are incorporated into employee manuals. Finally, employers should develop and enforce a disciplinary mechanism for supervisors who know about harassment but fail to do anything about it.

If you would like to discuss these or any other employment law matters, please do not hesitate to contact any member of Klinedinst's Employment Law Department.

Klinedinst's Fourth Annual Employment Law Symposium will be held on Thursday, December 6, 2001 from 8:00 a.m. - 4:30 p.m. Please contact the firm for further information or to register.