New management training requirements for California businesses have implications for all U.S. auto dealers. - Photo by DCOM via Getty Images

New management training requirements for California businesses have implications for all U.S. auto dealers.

Photo by DCOM via Getty Images

As of last New Year’s Eve, California law required all companies in that state with 50 or more employees to provide two hours of sexual harassment prevention training to its managerial or supervisory personnel. To save a few syllables, I’ll refer to those personnel simply as “managers.”

As of last New Year’s Day, that requirement expanded substantially. Now all California companies with five or more employees must provide their managerial or supervisory personnel with two hours of sexual harassment prevention training. Nonsupervisory employees of affected companies must receive one hour of such training. Training must be repeated every two years.

Initial training must be completed by Dec. 31, 2019. Given that many managers received their mandatory two-hour training in 2018 and training needs to be repeated every other year, those managers should be exempt from the 2019 training requirement, right? Wrong. If your managers were trained in 2018, they need to be retrained in 2019. Sorry.

New Training Requirements

The prior 50-employee threshold meant that most franchised new-car dealers had to provide their managers with sexual harassment prevention training. Now, with the lower five-employee threshold, it is safe to say all such dealers are affected. This is newsworthy in and of itself. But as always, the real story lies in the details.

California Senate Bill 1343, which effected these changes, further expands the scope of sexual harassment training to include harassment based on “gender identity, gender expression, and sexual orientation.” The training must include practical examples of such harassment.

Can a dealership just hire any old trainer and cycle its employees through an hour or two of training and be done with it? If only. The first point to notice is that the law requires “qualified” trainers. And what qualifies a person to train on sexual harassment prevention in California? One can be an experienced HR professional, a licensed attorney, or a university professor or instructor.

Whichever trainer a dealership utilizes, the trainer needs substantial experience with respect to sexual harassment. A gifted real estate lawyer with 30 years of experience in dirt law probably won’t do. And your favorite F&I trainer probably can’t qualify, even if reading from a script written by an otherwise qualified trainer.

The training can be obtained online, provided the content is developed by a qualified trainer. The training may be conducted in two or more segments, so long as the total training meets the one- or two-hour requirement and is completed by the Dec. 31, 2019, deadline.

The California Department of Fair Employment and Housing is obligated to create and make available online training that satisfies these requirements. That department’s website indicates that this training will not be available until “late 2019,” so if a California dealer doesn’t want to wait until the last minute to provide the required training, they must seek another source.

In addition to the training requirements, California dealerships must display a state-designed poster describing the law applicable to discrimination in employment in a “prominent and accessible location in the workplace.” And just in case the poster doesn’t do the trick, employers must provide employees with an “information sheet” that (among other things) defines sexual harassment, gives examples of behavior that could constitute sexual harassment, and explains that it is illegal.

An Ounce of Prevention

With all these requirements, you would think there must be some pretty stiff penalties for noncompliance. Surprisingly, no. The penalty provision of S.B. 1343 reads, in its entirety, “If an employer violates the requirements of this section, the department may seek an order requiring the employer to comply with these requirements.”

Does that mean California dealerships can ignore this expanded law with impunity? Absolutely not. It just means that the legal risk comes from another direction, and that will be a concern for employers — including dealerships — across the country.

If a dealer does not provide the required training and a sexual harassment claim is filed against it, you can bet the lack of training will be admitted as evidence that the dealership tacitly condoned harassment. That, in turn, supports punitive damages. Anecdotal evidence suggests that sexual harassment is one of the most common complaints against dealerships, so this is not a minor risk.

California is the most populous state in the union, and legal developments there tend to migrate east. Its massive expansion of sexual harassment training requirements is likely to result in similar (if not so expansive) requirements in other states as well. And even if that does not come to pass, the current California training requirement will stand as evidence of a “reasonable” employment practice that should be followed everywhere else.

What’s the bottom line for dealerships that don’t want to get caught on the wrong side of a sexual harassment claim? The best way to prevent sexual harassment claims is to prevent sexual harassment. If owners and managers don’t tolerate harassment it will go away. Remember, what one tolerates, one encourages.

Beyond that, train every employee about sexual harassment and its prevention. Train upon hire and annually thereafter. It doesn’t have to be two hours long — length does not equal effectiveness — but it does have to be consistent and it does need to reach every employee.

Such training doesn’t have to be expensive. Your garagekeepers liability carrier may provide such training for free, or for a low cost. But however you get it, get it. This is one issue that pays to get in front of.

James S. Ganther Esq. is the co-founder and CEO of Mosaic Compliance Services. He is a dealer compliance expert and a prolific writer and speaker. Email him at [email protected].

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Jim Ganther

Jim Ganther


James S. Ganther Esq. is the co-founder and CEO of Mosaic Compliance Services. He is a dealer compliance expert and a prolific writer and speaker.

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