New California Laws in 2020

As we welcome the new year, we also usher in the changes to California’s consumer protection laws and employment laws that are now as traditional as making a new years’ resolution you are never going to keep.

California continues giving consumers ever greater protections, especially in the realms of online privacy and finance lending.

Greater Protections for Consumers’ Electronic Personal Information
The California Consumer Privacy Act (“CCPA”) grants consumers various rights with regard to their personal information held by businesses, including the right to know, access and request deletion of their data. A consumer’s personal information maintained by a business that contains the identity of applicants, current and former employees, contractors, employee emergency contacts, and employees’ dependents and spouses is subject to the CCPA. Consumers now have stronger tools to force companies to stop sharing or selling their personal data. And, they now can sue companies over data breaches if the company fails to adequately protect the consumer’s personal information. For more information about how the CCPA can affect you and/or your company, see our previous article here.

Licensing and Regulating Finance Lenders and Brokers
AB 539 amends the California Financing Law (“CFL”), which already provides for the licensure and regulation of finance lenders and brokers by the Commissioner of Business Oversight. The CFL prohibits anyone from engaging in the business of a finance lender or broker without obtaining a license. The revised law imposes a rate cap on all consumer-purpose installment loans–including personal loans, car loans, auto title loans, and open-end lines of credit–where the amount of credit is greater than $2,500 but less than $10,000 (“covered loans”). The rate cannot exceed an annual simple interest rate of 36% plus the Federal Funds Rate for covered loans. In general, the terms of covered loans cannot exceed 12 months. However, covered loans between $2,500 and $3,000 cannot exceed 48 months and 15 days. Further, a covered loan between $3,000 and $10,000 cannot exceed a term of 60 months and 15 days.  (This provision does not apply to real property-secured loans of at least $5,000.) Additionally, the provisions relating to loan terms do not apply to open-ended lines of credit or certain student loans. Finance lenders making covered loans must report each borrower’s payment performance to at least one national credit bureau. They also must offer a free credit education program or seminar that has been approved by the California Commissioner of Business Oversight before loan funds are disbursed. The amendment prohibits the imposition of prepayment penalties on any covered loan, other than loans secured by real property.

Every year, the trend in California employment law  seems to continue to promote and protect employees, sometimes at the expense of businesses—2020’s new laws are no exception.

Extending Unpaid Leave for Organ and Bone Marrow Donors
The amendments to the Michelle Maykin Memorial Donation Protection Act will extend protections for employees in regard to paid leave for bone marrow donation and organ donation. Currently, the Michelle Maykin Memorial Donation Protection Act requires private employers with 15 or more employees to provide employees with 30 business days of paid leave for organ donation in a one-year period and up to five business days of paid leave for bone marrow donation. The amendments to this act will provide eligible employees with an additional 30 business days of unpaid leave in a one-year period to participate in an organ donation.

Greater Lactation Accommodation Requirements
Senate Bill 142 provides significant changes to lactation accommodation requirements for employers. It specifies that the break time must be provided “each time such employee has need to express milk.” It also provides additional requirements for rooms that employers provide for lactation purposes. Those rooms must be shielded from view and free from intrusion while the employee is lactating; be safe, clean, and free of hazardous materials; contain a surface for the employee to place a breast pump and personal items; have a place to sit; and have access to electricity or alternative devices, including, but not limited to, extension cords or charging stations needed to operate a breast pump. An employer also must provide access to a sink with running water and a refrigerator suitable for storing milk near the employee’s workplace. Further, where a multipurpose room is used for lactation, the use of the room for lactation must take precedence over any of its other uses, but only for the time the employee uses it for lactation purposes. Additionally, employers must create and implement a lactation policy in its employee handbook or set of policies made available to employees and distribute the policy to new employees upon hire and when an employee asks about or requests parental leave.

“No Rehire” Clauses in Settlement Agreements Are Usually Unenforceable
It is common that when a dispute between an employee and employer is resolved by way of a settlement agreement, the employer includes a now almost standard “no rehire” clause where the employee agrees to never apply for a job with the employer again in the future. These clauses will be void for all contracts entered into on or after January 1, 2020, except in limited circumstances, such as when an employer makes a good-faith determination that the employee engaged in sexual harassment or assault. The law does not require an employer to rehire a former employee if there is a legitimate, non-discriminatory reason for terminating the employee or refusing to rehire the individual.

Making Arbitration Clauses for Employees Unenforceable and Illegal – Not if the Courts have Any Say
With the passage of AB 51, if the California Legislature and Governor have their way, all employment contracts entered into as of 2020 or later cannot contain a mandatory arbitration clause. AB 51 imposes harsh penalties, including criminal violations and attorneys fees, against employers who do so.  But, they are not the last word on the law.  And the Courts are doing their best to delay the implementation of this first-of-its-kind bill to ensure that they have the time and resources brought to bear to analyze and then weigh in on its enforceability.  Before the New Year arrived, back on December 30, 2019, a federal District Court issued a Temporary Restraining Order against the State of California temporarily enjoining the State from enforcing Assembly Bill 51. Since then, the Court has affirmed its stay, and is determined to allow the State to take no action until it renders a decision—a decision which is certain to be appealed no matter what the outcome to the Ninth Circuit Court of Appeals, and then to the United States Supreme Court.  And, during its multi-year trip up the judicial system hierarchy, California employers and employees will be in a state of limbo regarding arbitration for the duration.  Expect frequent and noisy updates as one side or the other is affected by rulings along the way.

Hair Texture and Hair Styles “Traditionally Associated” with Race Have the Same Protection from Discrimination as Race Itself
The CROWN Act extends the protections to individuals under FEHA for a range of traits, from the color of their skin to the way they style their hair, by enacting prohibitions on discrimination in workplaces and schools based on “traits historically associated with race, including, but not limited to, hair texture and protective hair styles.” The act further defines “protective hairstyles” to include braids, locks, and twists.

As always, this is not a comprehensive list of all of California’s new laws, but these are some that we thought might interest you because they bear on your professional and/or personal lives, or those of your friends, family and/or colleagues.

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