Many clocks

Update 10/10/2019: Governor Newsom signed AB 9 into law today. AB 9 increases the time to file claims under the Fair Employment and Housing Act, Pregnancy Disability Leave Law, and California Family Rights Act from one year to three years. However, it does not revive previously lapsed claims.

Last year, we outlined several bills that California legislators put forth in response to the momentum of the #MeToo and #TimesUp movements. While Governor Brown signed many of these bills into law, he vetoed several important ones. Among the legislation he vetoed was AB 1870, a bill that would have given more time to employees to file employment discrimination claims. Given AB 1870’s broad support, was resuscitated as AB 9. Like its predecessor, AB 9 sought to extend from one to three years the time that employees have to file an administrative complaint with the Department of Fair Employment and Housing—the first step before being able to file a lawsuit.

Before delving into AB 9 and its impact, it is helpful to start with an overview of statutes of limitations and California’s administrative filing requirements for employment law claims.

1.       What is a statute of limitations?

A statute of limitations is a “law that bars claims after a specified period.”[1] Stated differently, it is a deadline by which a party must bring a lawsuit. Most legal claims that are not brought within the statute of limitations time period are forever barred. Indeed, a party’s failure to take certain actions within the time set by law is an affirmative defense for the defending party that allows the employee’s claims to be rejected.[2]

There are various policy justifications for statutes of limitations, including promoting the diligent prosecution of legal claims, minimizing the deterioration of evidence, and reducing the overall volume of litigation.[3] Statutes of limitations vary depending on the nature of the claim and the state within which the claim is brought. In addition, some claims must first be filed with a government agency before the employee is permitted to file a lawsuit.

2.       What are the statutes of limitations and exhaustion requirements in employment discrimination cases?

In California, claims for workplace discrimination, harassment, and retaliation are generally brought under the Fair Employment and Housing Act (“FEHA”). The FEHA protects employees from discrimination based on “race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status.”[4] It prohibits employees from being subjected to harassment based on these protected categories, and protects them from retaliation for engaging in protected activities. In addition, the FEHA creates obligations for employers to accommodate employees with disabilities and to accommodate religious beliefs/observances.

California law also provides accommodation and leave protections to pregnant employees through the Pregnancy Disability Leave Law (“PDLL”). The California Family Rights Act (“CFRA”) provides for job-protected leave to employees of larger companies who meet eligibility requirements and who require time off for their own serious medical condition, to care for the serious medical condition of a parent, child, or spouse, or to bond with a new baby/child. The New Parent Leave Act (“NPLA”) provides for job-protected leave to employees who meet eligibility requirements so that they may bond with a new baby/child. (An overview of discrimination protections and leave laws can be found here.)

An employee asserting claims under the FEHA, CFRA, PDLL, and/or NPLA must first file a complaint with the Department of Fair Employment and Housing (“DFEH”), the state agency charged with enforcing California’s civil rights laws.[5] Before the passage of AB 9, the complaint with the DFEH had to be filed within one year of the alleged unlawful practice.[6]

Note that some conduct pre-dating that time could come in under the judicially-created “continuing violation doctrine,”[7] but the doctrine only applies in very limited circumstances. Namely, it can apply where an employee can establish that the employer’s wrongful conduct that occurred inside of the limitations period was “similar or related to the conduct that occurred earlier,” “reasonably frequent,” and had not yet “become permanent.”[8]  In other words, the discriminatory and/or harassing conduct “occurring outside the limitations period continued into that period.”[9]  While this doctrine exists, it is incredibly risky for employees to rely on it. An employee is always better served to file its complaint with the DFEH within the exhaustion period.

When filing with the DFEH, an employee can do one of two things: (1) file an online complaint requesting an immediate “right-to-sue” letter so that they can sue the employer in civil court, or (2) fill out an online intake form requesting that the DFEH conduct its own investigation into the employer’s alleged wrongdoing.[10] (Most employees who are represented by counsel choose the first option; employees without representation often choose the second.) For employees that opt to have the DFEH investigate, the agency has up to one year from the date the DFEH complaint was filed to complete their investigation. Along the way, the DFEH may close out the file and issue a right-to-sue letter, or, if it makes a merit finding, may prosecute the action on behalf of the employee. Employees then have one year from the date of the issuance of the “right-to-sue” letter to file a lawsuit in civil court.

There are other statutes of limitations depending on the specific type of employment claim brought. For example, discrimination or whistleblower retaliation claims are often brought in conjunction with a tort claim for wrongful termination in violation of public policy in cases where the employee is terminated. The statute of limitation for wrongful termination claims is two years from the date of termination, as prescribed by section 335.1 of the Code of Civil Procedure.[11] Additionally, the statute of limitations for a breach of contract claim is four years, as section 337 of the Code of Civil Procedure applies. However, the statute of limitations for a breach of an oral or implied contract is two years, per section 339. The statute of limitations for violations under the Labor Code is three years; however, claims for penalties brought under the Labor Code Private Attorneys General Act of 2004 (“PAGA”) must be filed within one year, and must exhaust with the Labor and Workforce Development Agency.

3.       Why was the previous statute of limitations for employment discrimination claims problematic?

The pre-AB 9 one-year deadline to file with the DFEH for employment discrimination claims was unusually short when compared to other statutes of limitation in California. The statute of limitations is two years for personal injury claims, three years for property damage claims, three years for fraud claims, four years for breach of written contract claims, and ten years for latent defect claims.[12]

Indeed, employees often need more time to file their claims. Many silently suffer through harassment and discrimination because they need their jobs. A longer time to file with the DFEH allows them to wait until they are positioned in situations where retaliation for speaking out is less of a concern.

These points are explored in the Senate Judiciary bill analysis of AB 9:

“A worker who wants to denounce their employer immediately upon discovering a violation might be compelled by their financial circumstances to wait to do so until they have lined up alternative employment. Even if the aggrieved employee quits immediately after enduring the violation, that employee might nonetheless wait to file a formal complaint against the employer in the hope of maintaining decent relations – and thus decent job references – at least until the aggrieved employee lands a new job.”

It also benefits employees who are unfamiliar with their rights. Indeed, many employees who waited instead of immediately pursuing their claims are stunned to discover that the window of time for them to do so has already passed.

4.       What changes does AB 9 make?

As discussed above, an employee seeking redress for discrimination must follow a two-step process: first, the employee must file a complaint with the DFEH. Then, should the employee wish to proceed in court, the employee must file a lawsuit within one year of receiving a “right-to-sue” letter from the DFEH.

AB 9 alters this process in two important ways. First, AB 9 extends the deadline by which an aggrieved employee must file their initial complaint with the DFEH from one year to three years. Second, the bill clarifies that the DFEH’s one-year window to investigate complaints and decide whether to initiate a civil action begins from the date the verified complaint was filed (rather than from the date the initial intake was received).

Last year, Governor Brown vetoed AB 1870 (AB 9’s predecessor) on the grounds that the then-existing one-year deadline “not only encourages prompt resolution while memories and evidence are fresh, but also ensures that unwelcome behavior is promptly reported and halted.”[13] Gov. Brown had also explained that the one-year deadline has been in place since 1963, the implication being that it has functioned acceptably for decades.[14] As stated by AB 9’s author, however, “[t]he alternative policy conclusion is that, instead of ensuring that unwelcome behavior is promptly reported and halted, the one-year filing deadline has stood as an obstacle to revelations of workplace abuse, thus shielding perpetrators from accountability and facilitating the culture of tolerance for sexual harassment.”[15]

Given Gov. Gavin Newsom’s support for working Californians, and AB 9’s broad support from organizations such as the American Civil Liberties Union, the Women’s Foundation of California, and the American Association of University Women – California, we expected that the AB 9 would be signed into law.

5.       Caution to employees

Despite AB 9 passing, it is imperative that employees do not wait pursue their employment law claims. Aside from the catastrophic consequences of blowing the administrative deadline to file with the DFEH or the statute of limitation to pursue the claim in court (thereby losing the claim forever), evidence in employment cases can quickly go stale. Indeed, memories fade, key witnesses disappear, and pertinent documents are suddenly and mysteriously “lost” by the employer.

An employee’s best hope (including current employees) is to be fully informed about their legal rights. As we discussed in a recent blog post, it is often not enough to rely on the services of the employer’s human resources department, as they are often more concerned with protecting the employer than with taking the immediate corrective action that the law requires of them.

6.       Concluding thoughts

Acting on the momentum of the #MeToo and #TimesUp movements, California legislators continue to push for increased protections for employees who have been victims of harassment and discrimination. AB 9’s extension of the FEHA’s arbitrary and harmful one-year filing deadline will be a significant step towards leveling the playing field for California employees.

* * *

Written by Ramit Mizrahi, Esq. and John L. Schwab, Esq.

[1] STATUTE OF LIMITATIONS, Black’s Law Dictionary (11th ed. 2019).

[2] See e.g., CACI No. 454 (Affirmative Defense—Statute of Limitations); CACI No. 2508 (Failure to File Timely Administrative Complaint (Gov. Code, § 12960(d))—Plaintiff Alleges Continuing Violation).

[3] See generally Tyler T. Ochoa and Andrew Wistrich, The Puzzling Purposes of Statutes of Limitation, 28 Pac.L.J. 453 (1997).

[4] Gov’t Code § 12940(a).

[5] Note that California’s administrative requirements do not apply to federal employment law claims brought under, for example, Title VII of the Civil Rights Act, the Americans with Disabilities Act (“ADA”), or the Family and Medical Leave Act (“FMLA”). These are federal employment laws with their own statutes of limitation and administrative requirements. A California employee seeking to file Title VII or ADA claims must first file a complaint with the Equal Employment Opportunity Commission (“EEOC”) within 300 days of the alleged discrimination and file their lawsuit within 90 days of issuance of the right-to-sue letter. The FMLA has no administrative requirement and the statute of limitations is two years from the date of the violation or three years if the violation was “willful.” See 29 U.S.C. § 2617(c)(1)-(2). However, it is far less common for California employees to assert claims under federal law given that protections under State law are often greater.

[6] Id. at § 12960(d).

[7] See CACI No. 2508 (Failure to File Timely Administrative Complaint (Gov. Code § 12960(d))—Plaintiff Alleges Continuing Violation).

[8] Id.

[9] Dominguez v. Washington Mutual Bank, 168 Cal.App.4th 714, 720-21 (2008) (internal citations omitted).

[10] See DFEH Employment Complaint Flowchart.

[11] See generally Prue v. Brady Company/San Diego, Inc., 242 Cal.App.4th 1367, 1382 (2015) (holding that wrongful termination in violation of public policy claims are not barred by the FEHA’s one-year statute of limitations because the two-year statute for tort actions found in C.C.P. § 335.1 applies).

[12] See table of statutes of limitations prepared by the Judicial Branch of California.

[13] See AB 9 Senate Judiciary Bill Analysis, 7/8/19, p. 5.

[14] Id.

[15] Id.

Timing is Everything: AB 9, Statutes of Limitations and the Exhaustion of Administrative Remedies was last modified: December 20th, 2019 by Ramit Mizrahi
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