On July 9, 2018, California Governor Jerry Brown signed Assembly Bill 2770.  This bill extends privileged communication status to certain communications by employees and employers regarding alleged sexual harassment and continues California’s efforts to address claims of sexual harassment in the workplace.

Prior to AB 2770, California law protected as privileged an employer’s responses to questions from prospective employers regarding a former or current employee’s job performance or qualifications, so long as such communications were made without malice and based on credible evidence.  Also privileged were an employer’s answer as to whether or not the employer would rehire a current or former employee.  Based on this law, employers could not be sued for libel or slander based on these privileged communications.  AB 2770 extends this privilege to (1) complaints of sexual harassment by an employee, made without malice, to an employer based on credible evidence and (2) as particularly relevant to California employers, communications between the employer and interested persons regarding a complaint of sexual harassment.  The new law also authorizes an employer to answer whether the decision to not rehire a current or former employee is based on the employer’s determination that the employee engaged in sexual harassment.

Similar to other bills introduced to address legitimate and reasonable concerns about sexual harassment in the workplace, AB 2770 forces employers to consider how they handle sexual harassment allegations and how to respond to questions from prospective employers regarding such allegations.  While ostensibly protecting employers from claims of libel and slander brought by current and former employees, statements to prospective employers regarding prior claims of sexual harassment could still result in possible litigation brought by that applicant, thereby forcing employers to defend these claims based on the position that such statements were made without malice.  On the other hand, if an employer refuses to answer questions from prospective employers regarding sexual harassment, and harassment issues arise in the subsequent employment, it is not difficult to imagine a situation where the new employer sues the former employer based on its failure to disclose such allegations during the application process.

AB 2770 is less than one week old, so it still needs to be seen precisely how it will be interpreted by California courts and whether it will be weaponized by plaintiff-side employment counsel.  Either way, it is clear that California is still dealing with this important issue and that California employers should continue to pay attention to this difficult and complex situation.