Existing law provides that libel is a false and unprivileged written publication that injures the reputation and that slander is a false and unprivileged publication, orally uttered, that injures the reputation, as specified. Existing law makes certain publications and communications privileged and therefore protected from civil action, including certain communications concerning the job performance or qualifications of an applicant for employment that are made without malice by a current or former employer to a prospective employer. Existing law authorizes an employer to answer whether or not the employer would rehire an employee.

This bill would include among those privileged communications complaints of sexual harassment by an employee, without malice, to an employer based on credible evidence and communications between the employer and interested persons regarding a complaint of sexual harassment and would authorize an employer to answer, without malice, whether the employer would rehire an employee and whether or not a decision to not rehire is based on the employers determination that the former employee engaged in sexual harassment.

Existing law provides that libel is a false and unprivileged written publication that injures the reputation and that slander is a false and unprivileged publication, orally uttered, that injures the reputation, as specified. Existing law makes certain publications and communications privileged and therefore protected from civil action, including certain communications concerning the job performance or qualifications of an applicant for employment that are made without malice by a current or former employer to a prospective employer. Existing law authorizes an employer to answer whether or not the employer would rehire an employee.

This bill would include among those privileged communications complaints of sexual harassment by an employee, without malice, to an employer based on credible evidence and communications between the employer and interested persons regarding a complaint of sexual harassment and would authorize an employer to answer, without malice, whether the employer would rehire an employee and whether or not a decision to not rehire is based on the employers determination that the former employee engaged in sexual harassment.

Existing law provides that libel is a false and unprivileged written publication that injures the reputation and that slander is a false and unprivileged publication, orally uttered, that injures the reputation, as specified. Existing law makes certain publications and communications privileged and therefore protected from civil action, including certain communications concerning the job performance or qualifications of an applicant for employment that are made without malice by a current or former employer to a prospective employer. Existing law authorizes an employer to answer whether or not the employer would rehire an employee.

This bill would include among those privileged communications complaints of sexual harassment by an employee employee, without malice, to an employer based on credible evidence and communications by between the employer to and interested persons and witnesses regarding a complaint of sexual harassment during an investigation and would authorize an employer to answer answer, without malice, whether the employer would rehire an employee and whether or not a decision to not rehire a person is based on the employers determination that the former employee engaged in sexual harassment. The bill would also provide that for purposes of those provisions, malice is a state of mind arising from hatred or ill will, evidencing a willingness to vex, annoy, or injure another person, and that an allegation or statement that the communication is false is insufficient to establish malice.

Existing law provides that libel is a false and unprivileged written publication that injures the reputation and that slander is a false and unprivileged publication, orally uttered, that injures the reputation, as specified. Existing law makes certain publications and communications privileged and therefore protected from civil action, including certain communications concerning the job performance or qualifications of an applicant for employment that are made without malice by a current or former employer to a prospective employer.

This bill would include among those privileged communications complaints of sexual harassment by an employee to an employer based on credible evidence and communications by the employer to interested persons and witnesses regarding a complaint of sexual harassment during an investigation and would authorize an employer to answer whether or not a decision to not rehire a person is based on the employers determination that the former employee engaged in sexual harassment. The bill would also provide that for purposes of those provisions, malice is a state of mind arising from hatred or ill will, evidencing a willingness to vex, annoy, or injure another person, and that an allegation or statement that the communication is false is insufficient to establish malice.

 CONSENT 

Bill No: AB 2770

Author:

:

Vote:

SENATE JUDICIARY COMMITTEE: 7-0, 6/12/18

AYES: Jackson, Moorlach, Anderson, Hertzberg, Monning, Stern, Wieckowski

ASSEMBLY FLOOR: 72-0, 5/7/18 (Consent) - See last page for vote

SUBJECT:

SOURCE: California Chamber of Commerce

DIGEST:

This bill codifies California defamation case law as it relates to allegations of workplace sexual harassment, making it explicit in statute that: (1) employees who report sexual harassment to their employer are not liable for any resulting injury to the alleged harasser’s reputation, so long as the communication is made based on credible evidence and without malice; (2) communications between employers and anyone with an interest in a sexual harassment complaint, such as victims and witnesses, are not liable for any resulting damage to the alleged harassers reputation, as long as the communication is made without malice; and (3) former employers are not liable for any resulting injury to a former employee’s reputation if, in response to inquiries from prospective employers, the former employers indicate that they would not rehire the former employee based on a determination that the former employee engaged in sexual harassment, so long as the statement is made without malice.

ANALYSIS:

Existing law:

1. Defines “libel” as a false and unprivileged publication by writing, printing, picture, effigy, or other fixed representation to the eye, which exposes any person to hatred, contempt, ridicule, or obloquy, or which causes him to be shunned or avoided, or which has a tendency to injure him in his occupation. (Civ. Code Sec. 45.)
2. Defines “slander” as a false and unprivileged publication, orally uttered, and also communications by radio or any mechanical or other means which: (a) charges any person with crime, or with having been indicted, convicted, or punished for crime; (b) imputes in him the present existence of an infectious, contagious, or loathsome disease; (c) tends directly to injure him in respect to his office, profession, trade or business, either by imputing to him general disqualification in those respects which the office or other occupation peculiarly requires, or by imputing something with reference to his office, profession, trade, or business that has a natural tendency to lessen its profits; (d) imputes to him impotence or a want of chastity; or (e) which, by natural consequence, causes actual damage. (Civ. Code Sec. 46.)
3. Defines “defamation” as including either libel or slander. (Civ. Code Sec. 44.)
4. Protects, as a privileged publication, a communication made without malice to an interested person by one who is also interested, or by one who stands in such a relation to the person interested as to afford a reasonable ground for supposing the motive for the communication to be innocent, or who is requested by the person interested to give the information. (Civ. Code Sec. 47(c).)
5. Protects, as a privileged publication, any statement made by a current and former employer concerning the job performance or qualifications of an applicant for employment, when those statements are based upon credible evidence and made without malice at the request of a prospective employer of the applicant. (Civ. Code Sec. 47(c).)
6. Specifies that it is a privileged publication for a current or former employer to answer whether or not the employer would rehire the current or former employee. (Civ. Code Sec. 47(c).)
7. Defines “malice” for purposes of defamation law to mean a defamatory publication that is either motivated by hatred or ill will towards the plaintiff, or where the defendant lacked reasonable grounds for believing the truth of the publication and therefore acted in reckless disregard of the plaintiff’s rights. (Schep v. Capitol One N.A. (2017) 12 Cal.App.5th 1331; Taus v. Loftus (2007) 40 Cal 4th 683; see also California Civil Instructions (CACI) 1723.)

This bill:

1. Protects, as a privileged communication not subject to liability for defamation, any complaint of sexual harassment made by an employee to an employer, based upon credible evidence and without malice.
2. Protects, as a privileged communication not subject to liability for defamation, any communication between an employer and interested persons, made without malice, regarding a complaint of sexual harassment.
3. Protects, as a privileged communication not subject to liability for defamation, a statement made by a current or former employer to a prospective employer in response to an inquiry as to whether the employer would rehire a current or former employee and whether a decision not to rehire the employee is based upon the employer’s determination that the former employee engaged in sexual harassment.

Background

In response to the #MeToo and #WeSaidEnough movements demanding action to address the ongoing prevalence of sexual harassment, the Senate Judiciary Committee, in conjunction with the Senate Select Committee on Women, Work and Families, held two informational hearings in early 2018. These hearings re-examined the legal standard for sexual harassment in California and sought to identify legal and policy reforms needed to transition California toward a culture free of harassment.

During the first of these hearings, labor and employment law expert David Reis testified that the state’s defamation laws sometimes deter victims, witnesses, and former employers from making complaints or communicating information about harassers to others.

Defamation refers to the body of law that makes it possible to hold people accountable for harm to other people’s reputations through the spread of falsehoods. In legal terms, defamation is the tort of injuring another person’s reputation by saying or otherwise publishing something false and unprivileged about them. (Civ. Code Secs. 44-46.)

Accusing someone of engaging in sexual harassment can negatively impact that person’s reputation, of course, so such an allegation can, if shown to be false, result in liability for defamation. The prospect of facing a defamation lawsuit should, therefore, give pause to anyone thinking of making a bogus allegation of sexual harassment. At the same time, however, the fear of facing a defamation lawsuit can also act to deter people from making bona fide allegations of sexual harassment, especially if it would be challenging to marshal evidence of the harassment. Harassers and their attorneys sometimes threaten victims and witnesses with defamation lawsuits in order to take advantage of this dynamic and impose silence.

The similar dynamic is in play for employers. When an employee leaves under a cloud of suspicion relating to sexual harassment, the employer must take the risk of defamation lawsuits into consideration before bad-mouthing the former employee. On the one hand, this protects innocent employees against vindictive former employers out to smear them with false accusations. On the other hand, concern that a defamation lawsuit will follow may also deter employers from telling others about a genuine harasser. Existing law contains some limited protections for employers who are responding to reference checks. (Civ. Code Sec. 47(c).) Those protections probably already cover communications relating to allegations of sexual harassment. However, they do not say so explicitly.

At the hearing, Mr. Reis suggested that perhaps modifying California’s defamation laws could help mitigate this chilling effect, thereby enabling victims, witnesses, and former employers to speak out about harassment more freely. Such a change might assist in undermining the culture of silence that has allowed serial harassers to evade accountability and strike anew. This bill springs from that idea.

Specifically, this bill clarifies and makes explicit that three types of communications related to sexual harassment are privileged, meaning they cannot form the basis for a defamation lawsuit, so long as the communications are made without malice. (See Comments, below, for a discussion of the meaning and role of “malice” in this context.) First, this bill privileges a non-malicious complaint about sexual harassment communicated by an employee to an employer. Second, this bill privileges a non-malicious communication by the employer to “interested persons,” such as an investigatory body, regarding sexual harassment. Finally, this bill privileges a non-malicious communication, in response to an inquiry, in which a former employer tells a prospective employer that the former employer would not rehire the former employee based on the former employer’s determination that the employee engaged in sexual harassment.

Comments

The Meaning and Critical Role of “Malice”

In its existing form, subdivision (c) of Civil Code Section 47 provides what is, for practical purposes, qualified immunity against defamation claims. This strikes a balance between competing policy aims. Some immunity is good because, as a public policy matter, we want to encourage people to report misbehavior and provide references about other people in response to inquiries. At the same time, complete immunity would give people carte blanche to malign others, to ruin their reputations deliberately, and perhaps render them unemployable by spreading false rumors or outright lies.

The qualification to the immunity created by subdivision (c) of Civil Code Section 47 is that it only applies if the communication in question was made “without malice.” As interpreted by the California courts, a malicious communication is one that is either motivated by hatred or ill will, or is made without reasonable grounds for believing that the matter asserted is true. (Schep v. Capitol One N.A. (2017) 12 Cal.App.5th 1331; Taus v. Loftus (2007) 40 Cal 4th 683.)

The same limitation would apply to the communication privilege conferred by this bill: only communications “without malice” would be covered. Thus, in the context of sexual harassment allegations and investigations, victims and witnesses would be free to make complaints, but could not make false accusations out of spite or in complete disregard for the truth.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 6/14/18)

California Chamber of Commerce (source)

American Association of University Women of California

American Insurance Association

Association of California Water Agencies

California Ambulance Association

California Apartment Association

California Association for Health Services at Home

California Association of Winegrape Growers

California Bankers Association

California Business Properties Association

California Farm Bureau Federation

California Hospital Association

California Manufactures and Technology Association

California Restaurant Association

California Retailers Association

California Special Districts Association

California Travel Association

Cerritos Chamber of Commerce

Chambers of Commerce Alliance of Ventura and Santa Barbara Counties

Civil Justice Association of California

El Dorado Hills Chamber of Commerce

Gateway Chamber Alliance

Greater Coachella Valley Chamber of Commerce

Lodi Chamber of Commerce

Long Beach Area Chamber of Commerce

Murrieta Chamber of Commerce

North Orange County Chamber of Commerce

Official Police Garages of California

Oxnard Chamber of Commerce

Rancho Cordova Chamber of Commerce

San Gabriel Valley Economic Partnership

Santa Maria Valley Chamber of Commerce

Simi Valley Chamber of Commerce

Southwest California Legislative Council

The Chamber of the Santa Barbara Region

Tulare Chamber of Commerce

Wildomar Chamber of Commerce

Wine Institute

OPPOSITION: (Verified 6/14/18)

None received

ARGUMENTS IN SUPPORT: According to the author:

This bill would allow former employers to inform potential employers about whether a decision to terminate or not rehire an individual is based upon the employer’s determination that the former employee engaged in sexual harassment. This bill does not provide an absolute privilege to these types of communications, but a conditional privilege whereby the statements made by the former employer cannot be made with malice.

This bill would also protect the victims of sexual harassment from defamation lawsuits that arise when the victim makes a credible harassment complaint. A victim of sexual harassment should not be further deterred to file a sexual harassment complaint because of the threat of a lawsuit by the harasser.

This bill not only protects the victims, but also protects future victims from repeat sexual harassment offenders who can currently go from job to job undetected.

As sponsor of the bill, the California Chamber of Commerce and 34 co-signing entities write:

[AB 2770] codifies case law to ensure victims of sexual harassment and employers are not sued for defamation by the alleged harasser when a complaint of sexual harassment is made. California’s public policy protects employees from harassment and AB 2770 furthers this public interest.

California Civil Code Section 47 is intended to protect certain communications as privileged, making them immune from defamation lawsuits. However, victims of sexual harassment and employers are being sued for defamation when a complaint of sexual harassment is made. […] [T]here is no better way to silence a victim of sexual harassment than to threaten him or her with a lawsuit for simply making a complaint to human resources.

Not only are the victims being sued, but also the employers are being sued for defamation by the alleged harassers. This puts employers in an impossible position. Employers have an affirmative duty to take reasonable steps to prevent and promptly correct harassment. […] [T]here is no way an employer can conduct an investigation without discussing the harassment allegations to someone else in the company.

Astoundingly, harassers have the audacity to sue their employers for defamation regarding statements made during this legally required investigation process.

If the alleged harasser’s employment is then terminated, or the alleged harasser resigns, employers are put in an even more difficult position. The company has knowledge of the harassing activity and yet their hands are tied. If they tell a potential employer that the employee was accused of harassing conduct, they are on the hook for a defamation claim. If they stay silent, the harassers are then free to victimize more individuals at their next job without anyone at the new company ever knowing about the unacceptable behavior. AB 2770 would protect employers and allow them to warn potential employers about an individual’s harassing conduct during a reference check without the threat of a defamation lawsuit.

In further support of this bill, the American Association of University Women of California writes:

We agree that too often perpetrators file unwarranted lawsuits against victims and employers for statements made during sexual harassment investigations, and that the expense and hardships created by those lawsuits have a chilling effect on victims’ willingness to come forward. We applaud the goal of AB 2770 to protect those communications from lawsuits.

ASSEMBLY FLOOR: 72-0, 5/7/18

AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Brough, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chiu, Choi, Chu, Cooley, Cooper, Dahle, Daly, Flora, Fong, Frazier, Friedman, Gallagher, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

NO VOTE RECORDED: Bonta, Chen, Cunningham, Eggman, Cristina Garcia, McCarty

Prepared by:

6/15/18 11:05:58

**** END ****

SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2017-2018 Regular Session

Bill No: AB 2770 (Author:Irwin)

Version: April 19, 2018

Hearing Date: June 12, 2018

Fiscal: No

Urgency: No

Consultant: TSG

SUBJECT

Privileged communications: communications by former employer: sexual harassment

DESCRIPTION

This bill would codify California defamation case law as it relates to allegations of workplace sexual harassment, making it explicit in statute that: (1) employees who report sexual harassment to their employer are not liable for any resulting injury to the alleged harasser’s reputation, so long as the communication is made based on credible evidence and without malice; (2) communications between employers and anyone with an interest in a sexual harassment complaint, such as victims and witnesses, are not liable for any resulting damage to the alleged harassers reputation, as long as the communication is made without malice; and (3) former employers are not liable for any resulting injury to a former employee’s reputation if, in response to inquiries from prospective employers, the former employers indicate that they would not rehire the former employee based on a determination that the former employee engaged in sexual harassment, so long as the statement is made without malice.

BACKGROUND

In response to the #MeToo and #WeSaidEnough movements demanding action to address the ongoing prevalence of sexual harassment, this Committee, in conjunction with the Senate Select Committee on Women, Work & Families, held two informational hearings in early 2018. These hearings re-examined the legal standard for sexual harassment in California and sought to identify legal and policy reforms needed to transition California toward a culture free of harassment.

During the first of these hearings, labor and employment law expert David Reis testified that the state’s defamation laws sometimes deter victims, witnesses, and former employers from making complaints or communicating information about harassers to others.

Defamation refers to the body of law that makes it possible to hold people accountable for harm to other people’s reputations through the spread of falsehoods. In legal terms, defamation is the tort of injuring another person’s reputation by saying or otherwise publishing something false and unprivileged about them. (Civ. Code Secs. 44-46.)

Accusing someone of engaging in sexual harassment can negatively impact that person’s reputation, of course, so such an allegation can, if shown to be false, result in liability for defamation. The prospect of facing a defamation lawsuit should, therefore, give pause to anyone thinking of making a bogus allegation of sexual harassment. At the same time, however, the fear of facing a defamation lawsuit can also act to deter people from making bona fide allegations of sexual harassment, especially if it would be challenging to marshal evidence of the harassment. Harassers and their attorneys sometimes threaten victims and witnesses with defamation lawsuits in order to take advantage of this dynamic and impose silence.

The similar dynamic is in play for employers. When an employee leaves under a cloud of suspicion relating to sexual harassment, the employer must take the risk of defamation lawsuits into consideration before bad-mouthing the former employee. On the one hand, this protects innocent employees against vindictive former employers out to smear them with false accusations. On the other hand, concern that a defamation lawsuit will follow may also deter employers from telling others about a genuine harasser. Existing law contains some limited protections for employers who are responding to reference checks. (Civ. Code Sec. 47(c).) Those protections probably already cover communications relating to allegations of sexual harassment. However, they do not say so explicitly.

At the hearing, Mr. Reis suggested that perhaps modifying California’s defamation laws could help mitigate this chilling effect, thereby enabling victims, witnesses, and former employers to speak out about harassment more freely. Such a change might assist in undermining the culture of silence that has allowed serial harassers to evade accountability and strike anew. This bill springs from that idea.

Specifically, this bill would clarify and make explicit that three types of communications related to sexual harassment are privileged, meaning they cannot form the basis for a defamation lawsuit, so long as the communications are made without malice. (See Comment 3, below, for a discussion of the meaning and role of “malice” in this context.) First, the bill would privilege a non-malicious complaint about sexual harassment communicated by an employee to an employer. Second, the bill would privilege a non-malicious communication by the employer to “interested persons,” such as an investigatory body, regarding sexual harassment. Finally, the bill would privilege a non-malicious communication, in response to an inquiry, in which a former employer tells a prospective employer that the former employer would not rehire the former employee based on the former employer’s determination that the employee engaged in sexual harassment.

CHANGES TO EXISTING LAW

Existing law defines “libel” as a false and unprivileged publication by writing, printing, picture, effigy, or other fixed representation to the eye, which exposes any person to hatred, contempt, ridicule, or obloquy, or which causes him to be shunned or avoided, or which has a tendency to injure him in his occupation. (Civ. Code Sec. 45.)

Existing law defines “slander” as a false and unprivileged publication, orally uttered, and also communications by radio or any mechanical or other means which: (1) charges any person with crime, or with having been indicted, convicted, or punished for crime; (2) imputes in him the present existence of an infectious, contagious, or loathsome disease; (3) tends directly to injure him in respect to his office, profession, trade or business, either by imputing to him general disqualification in those respects which the office or other occupation peculiarly requires, or by imputing something with reference to his office, profession, trade, or business that has a natural tendency to lessen its profits; (4) imputes to him impotence or a want of chastity; or (5) which, by natural consequence, causes actual damage. (Civ. Code Sec. 46.)

Existing law defines “defamation” as including either libel or slander. (Civ. Code Sec. 44.)

Existing law protects, as a privileged publication, a communication made without malice to an interested person by one who is also interested, or by one who stands in such a relation to the person interested as to afford a reasonable ground for supposing the motive for the communication to be innocent, or who is requested by the person interested to give the information. (Civ. Code Sec. 47(c).)

Existing law protects, as a privileged publication, any statement made by a current and former employer concerning the job performance or qualifications of an applicant for employment, when those statements are based upon credible evidence and made without malice at the request of a prospective employer of the applicant.

Existing law specifies that this provision authorizes a current or former employer to answer whether or not the employer would rehire the current or former employee. (Id.)

Existing law defines “malice” for purposes of defamation law to mean a defamatory publication that is either motivated by hatred or ill will towards the plaintiff, or where the defendant lacked reasonable grounds for believing the truth of the publication and therefore acted in reckless disregard of the plaintiff’s rights. (Schep v. Capitol One N.A. (2017) 12 Cal.App.5th 1331; Taus v. Loftus (2007) 40 Cal 4th 683; see also California Civil Instructions (CACI) 1723.)

This bill would protect, as a privileged communication not subject to liability for defamation, any complaint of sexual harassment made by an employee to an employer, based upon credible evidence and without malice.

This bill would protect, as a privileged communication not subject to liability for defamation, any communication between an employer and interested persons, made without malice, regarding a complaint of sexual harassment.

This bill would protect, as a privileged communication not subject to liability for defamation, a statement made by a current or former employer to a prospective employer in response to an inquiry as to whether the employer would rehire a current or former employee and whether a decision not to rehire the employee is based upon the employer’s determination that the former employee engaged in sexual harassment.

COMMENT

1. Stated need for the bill

According to the author:

This bill would allow former employers to inform potential employers about whether a decision to terminate or not rehire an individual is based upon the employer’s determination that the former employee engaged in sexual harassment. This bill does not provide an absolute privilege to these types of communications, but a conditional privilege whereby the statements made by the former employer cannot be made with malice.

This bill would also protect the victims of sexual harassment from defamation lawsuits that arise when the victim makes a credible harassment complaint. A victim of sexual harassment should not be further deterred to file a sexual harassment complaint because of the threat of a lawsuit by the harasser.

This bill not only protects the victims, but also protects future victims from repeat sexual harassment offenders who can currently go from job to job undetected.

As sponsor of the bill, the California Chamber of Commerce and 34 co-signing entities write:

[AB 2770] codifies case law to ensure victims of sexual harassment and employers are not sued for defamation by the alleged harasser when a complaint of sexual harassment is made. California’s public policy protects employees from harassment and AB 2770 furthers this public interest.

California Civil Code Section 47 is intended to protect certain communications as privileged, making them immune from defamation lawsuits. However, victims of sexual harassment and employers are being sued for defamation when a complaint of sexual harassment is made. […] [T]here is no better way to silence a victim of sexual harassment than to threaten him or her with a lawsuit for simply making a complaint to human resources.

Not only are the victims being sued, but also the employers are being sued for defamation by the alleged harassers. This puts employers in an impossible position. Employers have an affirmative duty to take reasonable steps to prevent and promptly correct harassment. […] [T]here is no way an employer can conduct an investigation without discussing the harassment allegations to someone else in the company.

Astoundingly, harassers have the audacity to sue their employers for defamation regarding statements made during this legally required investigation process.

If the alleged harasser’s employment is then terminated, or the alleged harasser resigns, employers are put in an even more difficult position. The company has knowledge of the harassing activity and yet their hands are tied. If they tell a potential employer that the employee was accused of harassing conduct, they are on the hook for a defamation claim. If they stay silent, the harassers are then free to victimize more individuals at their next job without anyone at the new company ever knowing about the unacceptable behavior. AB 2770 would protect employers and allow them to warn potential employers about an individual’s harassing conduct during a reference check without the threat of a defamation lawsuit.

In further support of the bill, the American Association of University Women of California writes:

We agree that too often perpetrators file unwarranted lawsuits against victims and employers for statements made during sexual harassment investigations, and that the expense and hardships created by those lawsuits have a chilling effect on victims’ willingness to come forward. We applaud the goal of AB 2770 to protect those communications from lawsuits.

2. Examples of the problem the bill is intended to address

As evidence that defamation lawsuits are being used by sexual harassers to punish victims, witnesses, and former employers for telling others about the harassment, and as evidence that the threat of defamation lawsuits sometimes acts to dissuade victims, witnesses, and former employers from revealing what they know, the sponsors of this bill reference three cases.

In Cruey v. Gannett Co., Inc., (1998) 64 Cal.App.4th 356, a male executive confronted one of the female regional managers that he supervised with a negative job evaluation. She responded angrily and informed the executive that she would not allow him to threaten her job and her family. She stated that she knew how to protect her job. The next day, the regional manager submitted a report of sexual harassment against the executive to the human resources department. She also initiated a formal complaint with the Equal Employment Opportunity Commission (EEOC). The executive sued his accuser for defamation for both. He conceded that some elements of what the regional manager alleged was true, but that specific elements were distorted and exaggerated so as to make things look worse than what actually occurred. On appeal from the trial court’s dismissal of the executive’s defamation suit against his accuser, the Cruey court held that a report made to an official body like the EEOC is absolutely privileged; while an accuser’s report “through proper channels to a private employer” is only privileged if not made maliciously. It was up to the trier of fact, the Cruey court concluded, to determine if the regional manager’s comments and conduct were sufficient to establish malice.

In Comstock v. Aber (2012) 212 Cal.App.4th 931, an employee sued her supervisor and a co-worker for sexual assault. The co-worker denied the allegation and cross-claimed for defamation, based on the report about the assault that the employee made to the company human resources department, among others. The employee sought to strike the defamation cross-complaint on the grounds that it represented a Strategic Lawsuit Against Public Participation (SLAPP) suit. The Comstock court agreed with the employee, ruling that the employee’s complaint to human resources was privileged so long as it was not made maliciously, and that the co-worker had not produced sufficient evidence to establish a claim of such malice. Accordingly, the court struck the co-worker’s defamation cross-claim against his accuser.

In Olaes v. Nationwide Mutual Ins. Co. (2006) 135 Cal.App.4th 1501, a company fired one of its employees after the company’s investigation substantiated complaints of sexual harassment made against him. The employee then sued the company for defamation during the investigation. The company moved to strike the defamation claim as a SLAPP suit. The Olaes court was unconvinced. Though not directly ruling on whether communications made during a sexual harassment investigation are privileged, the Olaes court concluded that when such an investigation is done by a private employer and concerns a small group of people, it does not rise to the level of being a matter of public interest, and therefore does not fall with the SLAPP statute’s coverage.

3. The meaning and critical role of “malice”

In its existing form, subdivision (c) of Civil Code Section 47 provides what is, for practical purposes, qualified immunity against defamation claims. This strikes a balance between competing policy aims. Some immunity is good because, as a public policy matter, we want to encourage people to report misbehavior and provide references about other people in response to inquiries. At the same time, complete immunity would give people carte blanche to malign others, to ruin their reputations deliberately, and perhaps render them unemployable by spreading false rumors or outright lies.

The qualification to the immunity created by subdivision (c) of Civil Code Section 47 is that it only applies if the communication in question was made “without malice.” As interpreted by the California courts, a malicious communication is one that is either motivated by hatred or ill will, or is made without reasonable grounds for believing that the matter asserted is true. (Schep v. Capitol One N.A. (2017) 12 Cal.App.5th 1331; Taus v. Loftus (2007) 40 Cal 4th 683.)

The same limitation would apply to the communication privilege conferred by this bill: only communications “without malice” would be covered. Thus, in the context of sexual harassment allegations and investigations, victims and witnesses would be free to make complaints, but could not make false accusations out of spite or in complete disregard for the truth.

4. Case law codified by this bill

As previously mentioned, this bill does not change existing law. Rather, it codifies court interpretations of the existing defamation privilege statutes as applied to workplace communications about sexual harassment. Examples of those interpretations can be found in the following judicial decisions provided by the author.

1. Employee reports of sexual harassment

Cruey v. Gannett Co. (1998) Inc. 84 Cal.App.4th 356, 369:

We conclude that complaints to employers about workplace harassment should be privileged. To hold otherwise would have a chilling effect on an employee’s right to be free from sexual harassment or discrimination in the workplace by exposing the employee to the risk of litigation as a consequence to seeking enforcement of this right. However, none of [complaining employee’s] authority stands for the proposition that a complaint to a private employer, even if made through the proper channels, is absolutely privileged. At best, it is conditionally privileged subject to a finding of malice.

1. Employer investigations of sexual harassment

Bierbower v. FHP Inc. (1999) 82 Cal.Rptr.2d 393, 397:

To hold an employer liable for defamation because one employee must pass on a defamatory allegation of sexual harassment to another for investigation flies in the face of all sexual harassment law. The idea that the formal investigation should be conducted by a firm's human relations or personnel departments rather than the supervisor who first receives the complaint is an eminently reasonable one, if only because it promotes neutrality in any investigation.

Cuenca v. Safeway San Francisco Employees Fed. Credit Union (1986) 180 Cal.App.3d 985, 995-996:

Communications made in a commercial setting relating to the conduct of an employee have been held to fall squarely within the qualified privilege for communications to interested persons. … an employer may publish to his employees the reasons for termination of another employee, the rationale for the publication being the employer’s economic interest in clarifying its policies and preventing future abuses of those policies.

Deaile v. General Telephone Co. of California (1986) 40 Cal.App.3d 841, 849-850:

[A]n employer is privileged in pursuing its own economic interests and that of its employees to ascertain whether an employee has breached his responsibilities of employment and if so, to communicate, in good faith, that fact to others within its employ so that (1) appropriate action may be taken against the employee; (2) the danger of such breaches occurring in the future may be minimized; and (3) present employees may not develop misconceptions that affect their employment with respect to certain conduct that was undertaken in the past. Where an employer seeks to protect his own self-interest and that of his employees in good faith and without abusing the privilege afforded him, the privilege obtains even though it is substantially certain that emotional distress will result from uttered statements.

1. Reference checks

Noel v. River Hills Wilsons, Inc. (2003) 7 Cal. Rptr. 3d 216:

Courts have consistently interpreted section 47, subdivision (c) to apply in the employment context. In Manguso v. Oceanside Unified School Dist. 153 Cal.App.3d 574, 200 Cal.Rptr. 535 (1984), this court held the common-interest privilege applied to uncomplimentary statements the plaintiff’s former employer made to prospective employers. We explained that “[b]ecause the letter containing the alleged defamation was written by an educator, regarding qualifications of a particular teacher and directed to those prospective employers of that teacher, it is subject to a qualified privilege.” (Id. at p. 580.) [Internal citations omitted.]

Neal v. Gatlin (1973) 35 Cal.App.3d 871, 877:

It is well established that a former employer may properly respond to an inquiry from a potential employer concerning an individual’s fitness for employment, and if it is not done maliciously, such response is privileged.

5. Likely impact of the bill

This bill would not ban accused harassers from bringing, or threatening to bring, defamation lawsuits. For the policy reasons discussed in Comment 3, above, such a blanket prohibition would have the detrimental effect granting full impunity for smear campaigns based on false rumors or outright lies. In that sense, the sponsor’s claim that AB 2770 is intended to “prohibit these types of cases” – meaning cases in which an alleged harasser sues a victim, witness, or former employer – may be overstated. To be clear, AB 2770 would not “prohibit” such lawsuits. People accused of harassment could still bring lawsuits intended to clear their names or to recover damages for the harm done to their reputations at least. The accuser would still be on the hook for such damages, if the accusation made was false and malicious. As the sponsor’s letter recognizes: “AB 2770 does not provide an absolute privilege to these types of communications.”

Nonetheless, by making it explicit that alleged harassers can only prevail in a defamation lawsuit if the accuser or former employer has maliciously lied or trafficked in unsubstantiated rumor about what actually happened, AB 2770 should embolden employees, witnesses, and former employers to communicate more freely about incidents of sexual harassment. In codifying the relevant case law, AB 2770 underscores that victims enjoy certain protections when they speak out about harassment. By the same token, the bill would likely render defamation lawsuits more of an empty threat: where the law clearly protects those who speak up, intimidating victims, witnesses, and former employers into silence becomes more difficult.

Support: American Association of University Women of California; American Insurance Association; Association of California Water Agencies; California Ambulance Association; California Apartment Association; California Association for Health Services at Home; California Association of Winegrape Growers; California Bankers Association; California Business Properties Association; California Farm Bureau Federation; California Hospital Association; California Manufactures and Technology Association; California Restaurant Association; California Retailers Association; California Special Districts Association; California Travel Association; Cerritos Chamber of Commerce; Chambers of Commerce Alliance of Ventura and Santa Barbara Counties; Civil Justice Association of California; El Dorado Hills Chamber of Commerce; Gateway Chamber Alliance; Greater Coachella Valley Chamber of Commerce; Lodi Chamber of Commerce; Long Beach Area Chamber of Commerce; Murrieta Chamber of Commerce; North Orange County Chamber of Commerce; Official Police Garages of California; Oxnard Chamber of Commerce; Rancho Cordova Chamber of Commerce; San Gabriel Valley Economic Partnership; Santa Maria Valley Chamber of Commerce; Simi Valley Chamber of Commerce; Southwest California Legislative Council; The Chamber of the Santa Barbara Region; Tulare Chamber of Commerce; Wildomar Chamber of Commerce; Wine Institute

Opposition: None known

HISTORY

Source: California Chamber of Commerce

Related Pending Legislation: None known

Prior Legislation:

AB 1912 (Richman, 2004), as introduced, would have created a rebuttable presumption that an employer providing a reference is doing so in good faith. The rebuttable presumption could only have been overcome by clear and convincing evidence that the communication was intentionally malicious and knowingly false or knowingly misleading. AB 1912 failed passage before the Senate Committee on Judiciary.

AB 2868 (Wright, Ch. 1029, Stats. 2002) modified subdivision (c) of Civil Code Section 47 to clarify that employers’ qualified immunity from defamation applies when the employer is communicating with someone that the employer “reasonably believes to be a prospective employer.” AB 2868 further clarified that subdivision (c) of Civil Code Section 47 authorizes an employer to answer whether or not the employer would rehire a current or former employee.

AB 2778 (Murray, Ch. 364, Stats. 1994) made explicit that the qualified immunity conferred by subdivision (c) of Civil Code Section 47 applies to communications concerning the job performance or qualifications of an applicant for employment, based upon credible evidence, made without malice, by a current or former employer of the applicant at the request of the prospective employer.

Prior Vote:

Assembly Floor (Ayes 72, Noes 0)

Assembly Judiciary Committee (Ayes 10, Noes 0)

**************

Date of Hearing: May 1, 2018

ASSEMBLY COMMITTEE ON

, Chair

ABPCA Bill Id:

Author:() – As Amended Ver:

PROPOSED CONSENT

SUBJECT:

KEY ISSUES:

1. Should a complaint about sexual harassment made without malice by an employee to an employer be a privileged communication for purposes of a defamation action?
2. Should non-malicious statements by a current or former employer to interested persons regarding a complaint of sexual harassment be a privileged communication for purposes of a defamation action?
3. should an employer's non-malicious statement to a prospective employer that an EMPLOYEE ENGAGED in sexual harassment be a privileged communication for purposes of a defamation action, so long as the statement is based upon the employer's determination that the former employee engaged in sexual harassment?

SYNOPSIS

Under existing law, a person who suffers reputational harm as a result of a false communication may bring an action alleging defamation (libel or slander) against the person who made the false and harmful communication. Generally, the state of mind or motive of the person making the communication does not matter; if the communication is false and causes reputational harm, the person making it is liable for damages. However, Civil Code Section 47 makes a number of communications "privileged" as a matter of law. Subdivision (c) of Section 47 makes an employer's comments about a current or former employee to a prospective employer seeking a reference a privileged communication, so long as the communication is made "without malice," which is defined for purposes of defamation law as a statement that is knowingly false or made with reckless disregard for the truth or falseness of the statement. The intent of this provision is to encourage the employer to provide an honest evaluation of an employee without fear of liability. This bill would modify that provision in two ways: first, it specifies that the privilege extends to an employer's non-malicious statements, as specified, regarding complaints of sexual harassment against an employee; second, it extends the privilege to an employee's complaint of sexual harassment. This bill, according to the author, will protect present and potential victims of sexual harassment by allowing an employer to warn a prospective employer about a person who poses a risk, and by ensuring that a victim who makes a good faith sexual harassment complaint to an employer or supervisor will not be sued by the alleged sexual harasser for defamation. The bill is supported by the California Chamber of Commerce, which cites cases of alleged harassers suing employers and even victims, for statements made in connection with a sexual harassment complaint or investigation. There is no known opposition to the bill in print.

SUMMARY: Makes certain communications regarding complaints of sexual harassment "privileged communications" for purposes of a defamation cause of action. Specifically, this bill:

1. Protects, as a privileged communication, any complaint of sexual harassment made by an employee, without malice, to an employer based upon credible evidence.
2. Protects, as a privileged communication, any communication between an employer and interested persons, made without malice, regarding a complaint of sexual harassment.
3. Protects, as a privileged communication, a statement made by a current or former employer to a prospective employer as to whether the employer would rehire a current or former employee and whether a decision not to rehire the employee is based upon the employer's determination that the former employee engaged in sexual harassment.

EXISTING LAW:

1. Defines "libel" as a false and unprivileged written publication that causes injury, while defining "slander" is a false and unprivileged oral communication that causes injury. Defines "defamation" to include either libel or slander. (Civil Code Sections 44 to 46.)
2. Protects, as a privileged publication, a communication made without malice to an interested person by one who is also interested, or by one who stands in such a relation to the person interested as to afford a reasonable ground for supposing the motive for the communication to be innocent, or who is requested by the person interested to give the information. (Civil Code section 47 (c).)
3. Protects, as a privileged publication, any statement made by a current and former employer concerning the job performance or qualifications of an applicant for employment, when those statements are based upon credible evidence and made without malice at the request of a prospective employer of the applicant. Specifies that this provision authorizes a current or former employer to answer whether or not the employer would rehire the current or former employee. (Id.)
4. Defines "malice" for purposes of defamation law to mean a defamatory publication that is either motivated by hatred or ill will towards the plaintiff, or where the defendant lacked reasonable grounds for believing the truth of the publication and therefore acted in reckless disregard of the plaintiff’s rights. (Schep v. Capitol One N.A. (2017)12 Cal.App.5th 1331; Taus v. Loftus (2007) 40 Cal 4th 683; see also California Civil Instructions (CACI) 1723.)

FISCAL EFFECT: As currently in print this bill is keyed non-fiscal.

COMMENTS: This bill is one of several in the current session that responds to revelations about workplace sexual harassment, from Washington to Hollywood to the California State Legislature. This bill addresses situations in which statements about alleged workplace sexual harassment – whether made by an employer or an employee – have led to charges of defamation by the person accused of sexual harassment. According to the author, these changes will ensure that victims can make good faith complaints of sexual harassment in the workplace, and that employers can inform prospective employers that a current or former employee had engaged in sexual harassment, without fear of being sued for defamation by the sexual harasser.

Employer References as Privileged Communications: Under existing law, a person who suffers reputational injury as a result of a false communication may bring an action alleging defamation (libel or slander) against the person who made the false and harmful communication. The state of mind or motive of the defendant does not matter; if the communication is false and causes reputational harm, the person that made the communication is liable for damages. However, Civil Code Section 47 makes a number of communications "privileged" as a matter of law; privileged communications are generally not actionable. Subdivision (c) of Section 47 makes an employer's comments about a current or former employee to a prospective employer seeking a reference a privileged communication, so long as the communication is made "without malice." For purposes of defamation law, "malice" means making a statement that one knows to be false or that one makes with reckless disregard for the statement's truth or falseness. The apparent intent of this provision is to encourage the employer to provide an honest evaluation of the employee without fear of liability. This bill would modify that provision in three ways.

First, the bill would make privileged any communications between employers and "interested persons" regarding a complaint of sexual harassment, including, for example, statements made, without malice, in the course of an investigation of sexual harassment. Arguably, communications made in the course of an investigation of sexual harassment – an investigation that the employer is required to conduct under the Fair Employment and Housing Act – would already be deemed privileged so long as the statements were made without malice and based on a credible allegation. Second, where existing law makes privileged an employer's answer to the question of whether or not the employer would rehire the employee, this bill would specify that this provision would include an employer's answer to the question of whether the decision to not rehire the employee is based upon the employer's determination that the employee had engaged in sexual harassment. Again, this answer, to be protected from a defamation action, must be made without malice. This provision of the bill is arguably a clarification of existing law. That is, existing law already allows an employer to comment on an employee's job performance and to state whether or not the employer would rehire the employee. Nothing in existing law expressly limits the contents or subject matter of these statements, thus an employer's discussion of an employee job performance might well include whether or not the employee engaged in sexual harassment. However, this bill will make it clear that such statements are privileged communications within the meaning of Civil Code Section 47 (c).

Third, this bill makes a substantial change to existing law by making an employee's complaint of sexual harassment that is made to the employer a privileged communication. Existing law applies only to the statements of employers, not to those of employees. (Although one could argue that an employee's complaint of sexual harassment to an employer could be construed as privileged under general protection under Section 47 (c) of non-malicious communications to an "interested" person.) Nonetheless, this provision of the bill is prompted by the reasonable concern that a victim of sexual harassment could face the added burden of enduring a defamation claim by the sexual harasser. Indeed, the letter of support submitted by the Chamber of Commerce cites cases in which alleged harassers have sued victims for defamation.

Privileged Communication and the Definition of Malice: At common law, libel and slander were strict liability torts: the state of mind of the speaker or writer was not relevant, so the plaintiff only needed to show that there was a defamatory statement that caused reputational harm to the plaintiff and that the statement was "published" – which simply meant that it reached one person other than the defamed plaintiff. At common law, falsity was not a required element of the tort of defamation; however, the defendant could raise truth as a complete defense. While this may seem like a distinction without a difference – a defendant is liable for false statements in either case – the significance of the distinction lays in which party bears the burden of proof. As an element of the tort, the burden is on the plaintiff to show that the statement is false; as a defense, the burden is on the defendant to show that the statement is true. As codified in the California Civil Code, however, falsity is effectively an element, because defamation is defined as any "false and unprivileged publication" which defames (i.e. injures the reputation of) the plaintiff. The Civil Code does not define what an "unprivileged" publication means, but rather lists a number of "privileged publications" in Civil Code Section 47. Presumably an "unprivileged publication" is anything not listed in Section 47 or not expressly privileged in some other statute.

Under subdivision (c) of Section 47 – which this bill amends – a communication is privileged only if it is made "without malice." For purposes of defamation law, malice means publishing a false and defamatory statement knowing it to be false or with reckless disregard of whether that statement is true or false. (See New York Times Co. v. Sullivan (1964) 376 U.S. 254.) California courts have adopted a definition that effectively combines this definition, in the disjunctive, with the more popular meanings of "malice" as requiring some ill intent. For example, the California jury instructions for Civil Code Section 47 (c) define malice as requiring either (1) that the statement evinces "hatred or ill-will toward the plaintiff" or (2) "that [the defendant] had no reasonable grounds for believing the truth of the statement.” (CACI 1723, citing Taus v. Loftus 40 Cal 4th 683 (2007); see also Schep v. Capitol One N.A. (2017) 12 Cal.App.5th 1331, 1337.) An earlier version of this bill included a definition of "malice" as a statement evincing "hatred and ill-will," without including the important alternative definition of knowing that a statement is false, or having no reasonable basis for believing the truth of the statement. However in response to concerns raised by the Committee and labor and employment law groups, that definition has been appropriately eliminated from the bill in print. The removal of the definition has addressed these concerns. As demonstrated by the California jury instructions, there is already a well-established understanding of the meaning of malice for purposes of defamation law in general, and for Civil Code Section 47 (c) in particular. Therefore, there is no need to place a definition of malice in this bill, especially one that is inconsistent with the clearly established meaning of the term.

ARGUMENTS IN SUPPORT: The California Chamber of Commerce, on behalf of itself and several other business and employer associations, supports AB 2770 because it will ensure that "victims of sexual harassment and employers are not sued for defamation by the alleged harasser when a complaint of sexual harassment is made." According to the Chamber, "sexual harassers are suing the victims for defamation when the victims report the harassing behavior." In support of this, the Chamber cites Cruey v. Gannett Co. Inc. (1998) 64 Cal. App. 4^th 356, where "the alleged harasser brought libel and slander causes of action against the victim because of statements she made in her complaint to the company's human resources department and the Equal Employment Opportunity Commission." In Comstock v. Aber (2012) 212 Cal. App. 4^th 931, the harasser not only sued the victim for statements she made to her employer, but also sued the police and a healthcare professional who treated the victim for sexual assault. In addition to harassers suing victims, the Chamber also cites cases in which the harasser has sued employers for statements made during a required investigation of a sexual harassment complaint. The Chamber further contends that employers could be sued for warning a prospective employer seeking a reference about an employee who has engaged in sexual harassment. Finally, the Chamber notes that AB 2770 "does not provide an absolute privilege to these types of communications, but rather a conditional privilege . . . [that] will not apply if the statements are made by the former employer or victim with malice."

REGISTERED SUPPORT / OPPOSITION:

Support

American Insurance Association

California Ambulance Association

California Apartment Association

California Association for Health Services at Home

California Association of Winegrape Growers

California Bankers Association

California Business Properties Association

California Farm Bureau Federation

California Chamber of Commerce

California Hospital Association

California Manufactures and Technology Association

California Restaurant Association

California Retailers Association

California Special Districts Association

Cerritos Chamber of Commerce

Chambers of Commerce Alliance of Ventura and Santa Barbara Counties

Civil Justice Association of California

El Dorado Hills Chamber of Commerce

Gateway Chamber Alliance

Greater Coachella Valley Chamber of Commerce

Lodi Chamber of Commerce

Long Beach Area Chamber of Commerce

Murrieta Chamber of Commerce

North Orange County Chamber of Commerce

Official Police Garages of California

Oxnard Chamber of Commerce

Rancho Cordova Chamber of Commerce

San Gabriel Valley Economic Partnership

Santa Maria Valley Chamber of Commerce

Simi Valley Chamber of Commerce

Southwest California Legislative Council

The Chamber of the Santa Barbara Region

Tulare Chamber of Commerce

Wildomar Chamber of Commerce

Wine Institute

Opposition

None on file

Analysis Prepared by: