Beginning January 1, 2024, a new California law will make it easier for employees to establish retaliation claims against their employers. Senate Bill (SB) 497, also known as the Equal Pay and Anti-Retaliation Act, amends California Labor Code sections 98.6, 1102.5, and 1197.5. This new law creates a rebuttable presumption of retaliation if an adverse action is taken against an employee within 90 days of the employee engaging in a protected activity.

Under current California law, retaliation claims involve a three-stage burden-shifting process. Initially, the employee must establish a prima facie case of retaliation. If successful, the burden then shifts to the employer to provide a legitimate, non-retaliatory reason for the adverse employment action. Finally, if the employer articulates a legitimate reason, the burden shifts back to the employee to prove that the employer's stated reason was merely a pretext for retaliation.

To establish a prima facie case of retaliation, the employee must demonstrate: (1) engagement in a protected activity, such as filing a complaint, reporting suspected illegal activities in the workplace, participating in an investigation, or exercising other rights under the Labor Code; (2) that the employer took an adverse action against the employee, such as termination, demotion, suspension, or reduction in hours; and (3) a causal nexus between the protected activity and the adverse employment action.

SB 497 makes it easier for employees to establish a prima facie case of retaliation by creating a rebuttable presumption of retaliation if the employer takes adverse action against the employee within 90 days of the employee engaging in a protected activity. In this case, the burden automatically shifts to the employer to demonstrate a legitimate, non-retaliatory reason for the action. Additionally, SB 497 establishes that, in addition to other remedies, an employer is liable for civil penalties of up to $10,000 per employee for each violation, payable to the employee who was retaliated against.

In conclusion, SB 497 lessens the burden for California employees to establish retaliation claims against an employer where the employer takes adverse action against an employee within 90 days of the employee engaging in a protected activity. To effectively address potential retaliation claims, it's important for both employers and employees to consult with qualified legal counsel to ensure they are well-informed and represented under California's evolving legal landscape.