United States: California Law Significantly Expands Labor Commissioner's Authority To Investigate And Enforce Retaliation Claims

Last week, California Governor Jerry Brown signed into law a bill that significantly expands the Labor Commissioner's authority to investigate and enforce retaliation claims. Among other things, Senate Bill 306 ("SB 306") makes it possible for an employee to obtain injunctive relief before the Labor Commissioner completes an investigation and produces a decision. This means that employers may be ordered to restore employment to an aggrieved, former employee during the pendency of the claims process, which could take two or three years to investigate. Further, SB 306 makes it easier for the Labor Commissioner to obtain injunctive relief by lowering the burden of proof and also permits the Labor Commissioner to investigate suspected retaliation with or without a formally filed complaint. Moreover, SB 306 authorizes the Labor Commissioner to issue citations directly to individuals determined to be responsible for violations instead of through a superior court. However, SB 306 does not prohibit an employer from disciplining or firing an employee for conduct that is unrelated to the retaliation claim.

SB 306 was signed into law on October 3, 2017, and goes into effect on January 1, 2018.

Injunctive Relief May Be Obtained Prior to the Completion of the Investigation Process

The most significant shift brought about by SB 306 is that the Labor Commissioner can now obtain injunctive relief prior to the completion of the investigation process and has a lower burden of proof in which to obtain it. To provide clarity, "injunctive relief" is a court-ordered remedy that requires an employer to do something, such as put an employee back to work. As the law exists, injunctive relief may only be ordered after the investigation process is complete and an unlawful violation is found. In contrast, once SB 306 takes effect, the Labor Commissioner is permitted to seek injunctive relief from the court at any point during the course of an investigation. The Labor Commissioner no longer has to prove that an unlawful violation occurred in order for the court to force an employer to take a specific action. Presumably, this would force an employer to put an employee back to work following a termination or other disciplinary action until the Labor Commissioner's investigation process is complete.

Further, SB 306 drastically reduces the burden of proof in which to obtain injunctive relief. As it exists now, the general standard for injunctive relief requires an individual to prove: (1) likelihood of success on the merits of the claim, (2) irreparable harm if the injunctive relief is not granted, and (3) the interests outweigh the harm that the employer will suffer from granting the relief. Under SB 306, however, injunctive relief may be granted upon a showing of "reasonable cause." Essentially, if the Labor Commissioner can prove that it is reasonable to conclude that the employee has been unlawfully discharged or subjected to an adverse action in retaliation for a protected activity, then the court will grant the Labor Commissioner's petition for injunctive relief in favor of the employee. Correspondingly, the new law also instructs the court to consider "the chilling effect on other employees asserting their rights under those laws in determining if temporary injunctive relief is just and proper." 

In sum, SB 306 reduces the burden of proof while forcing the court to consider new factors that wholly favor employees. As such, once the bill takes effect, it will be much easier for employees to obtain injunctive relief in retaliation cases.

The Labor Commissioner is Now Allowed to Investigate Suspected Retaliation Without a Formally Filed Complaint

As the law exists, the Labor Commissioner is permitted to investigate alleged retaliatory conduct after an employee files a complaint with the Division of Labor Standards Enforcement ("DLSE"). In contrast, SB 306 permits the Labor Commissioner to investigate suspected acts of retaliation "with or without receiving a complaint." If the Labor Commissioner suspects acts of retaliation during the investigation of a wage claim or other specific investigation being conducted, the Labor Commissioner is permitted to commence an investigation regardless of whether a complaint was filed. This means that the Labor Commissioner can unilaterally investigate suspected retaliatory activity without a complaint or without even notifying the employer as to the reason it is being investigated.

New Citation Process for the Enforcement of Retaliation Decisions

SB 306 creates a new citation process for the enforcement of retaliation decisions. Currently, the Labor Commissioner has the burden of enforcing investigation determinations in a superior court – meaning, once the Labor Commissioner comes to a decision, the decision must be filed with a superior court in order for the judgment to take effect. Further, under existing law, if an employer wants to appeal the Labor Commissioner's decision, the employer must bring the appeal directly to a superior court. The superior court then sets the appeal for a trial de novo, and a superior court judge hears the matter from the beginning – giving no consideration to the facts and findings presented through the Labor Commissioner's investigation.

Under SB 306, the Labor Commissioner is authorized to issue a decision and order directly to the employer. At that point, the burden then shifts to the employer to challenge that determination through an administrative and court appeal. On appeal, the employer will be required to file a writ of mandate with the superior court instead of proceeding in front of a superior court judge with a trial de novo.

Increased Penalties and Other Provisions

SB 306 provides that a civil penalty of $100 per day, up to $20,000, will be imposed on any employer that willfully refuses to comply with an order of the court to hire, promote, or restore an employee, or refuses to comply with an order to post a specified notice. These penalties are ordered to be paid directly to the aggrieved employee. Further, the new law provides that the court shall determine the reasonable attorney's fees incurred by the Labor Commissioner if the Commissioner is the prevailing party in an enforcement action, and this amount will be enforced against the employer.

The implementation of SB 306 presents a significant shift in the processing of retaliation claims to the detriment of California businesses. Your Lewis Brisbois employment attorney is available to assist with any retaliation claims that may arise or to provide advice in order to avoid the harsh implications of this development in California law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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