Cost issue raised over law on sex harassment.

Legislation signed by Gov. Arnold Schwarzenegger that mandates sexual harassment training in companies is raising concern among business groups because of the costs involved and redundancy with other statutes.

While the bill did not rise to the level of "job killer," as rated by the California Chamber of Commerce, Schwarzenegger's signature does create another burden on businesses, said Gino DiCaro, communications director for the California Manufacturers and Technology Association.

"It just means another duplicative cost," he said. "Workplace disruption is always a substantial cost to manufacturers."

The bill is fraught with undertones from last year's recall campaign and allegations of sexual misconduct levied against the governor.

Earlier this year, Schwarzenegger, who himself is not required to take a sexual harassment prevention class, voluntarily enrolled in his staff's two-hour course. During a recent session with the Hollywood Foreign Press Association, the governor said he had "learned my lesson" about groping women and that "it is a totally different ballgame" now that he is representing the state of California.

Vince Sollitto, a spokesman for the governor, said political sensitivities had nothing to do with the decision to sign off on AB 1825. He said business opposition was misplaced.

"The governor doesn't view this as antibusiness legislation," Sollitto said. "He views it as both pro-employee and pro-employer legislation. Smart businesses already provide this type of training because they know it's not only the right thing to do but it also reduces incidences of harassment and, perhaps, most importantly to their bottom line, litigation."

The law requires businesses with 50 or more employees to provide supervisors with two hours of sexual harassment training every two years. In lobbying against the bill, the California Chamber of Commerce argued that many businesses affected by the law couldn't afford to hire either an in-house training staff or a consultant. The extra costs, the chamber lobbyists said, come at a time of higher workers' compensation and unemployment insurance bills.

Selling limits

"I'm not trying to be unreasonable," said Assemblywoman Sarah Reyes, D-Fresno, who authored the bill and noted that it was a compromise. "I did tell the Chamber that I was willing to work with them. Unfortunately, we did all the bending and they did not."

DiCaro said the California Manufacturers and Technology Association had argued that the legislation was redundant because similar instruction was already included in other employee training. He added that in many cases it opened the door for other bills requiring employers to reorganize and extend training systems at considerable expense.

Some members already provide about six hours of training to prevent discrimination, including sexual harassment, DiCaro said. Adding two hours of training specifically devoted to sexual harassment prevention would require companies to add another course onto their already time-intensive training programs, he said.

David Bowman, chairman of TTG Consulrants Inc., a human resources consulting firm, said most training programs are designed to address sexual harassment, racial discrimination or other issues.

He also said companies with fewer than 250 employees often don't train any employees on sexual harassment prevention.

"We'll contact HR people and they say, 'We don't do any sexual harassment training. We've never had a problem,'" he said. "I ask them, 'Do you have fire insurance?' 'Yes.' 'Have you had a fire?' 'No.' That puts it in perspective."

At TTG, rates for sexual harassment prevention training at a company with 50 employees run about $1,500 for three, two-hour onsite courses.

Richard Simmons, a labor partner at Sheppard Mullin Richter & Hampton LLP, said most of his clients provide sexual harassment prevention training of between 45 minutes to an hour and a half. Two hours, especially in a lecture setting, is a long time to take supervisors out of their job responsibilities, he said. (Simmons ran in the recall election on a probusiness platform.)

He acknowledged that the law had its benefits. Even though the prevention courses do not absolve businesses from liability, a jury or judge in a lawsuit will give credit to a company that took some action in preventing harassment in the workplace.

DiCaro, too, acknowledged the new law was not the biggest threat to California businesses in the last legislative session.

"We defeated a lot of bills before they got to the Governor's desk," he said. "The governor vetoed a good portion of anti-business bills, or bills that were creating duplicative costs on California businesses. For what reason he signed this one, I don't know. But the business community did pretty well by Gov. Schwarzenegger."

Reyes stopped short of calling Schwarzenegger's decision purely political. Still, she said, "I would be dishonest with you if I didn't say I was surprised he signed it. It's no surprise the governor vetoed 90 percent of the bills the California Chamber of Commerce didn't like."

She said the governor recognized that existing law has done little to reduce incidences of sexual harassment, one of the primary reasons she introduced the bill. Reyes said 4,231 sexual harassment claims filed with the state's Department of Fair Employment and Housing in the year ended June 30, 2003, nearly a quarter of all complaints.

"The reason we have so many lawsuits, and so many people violating the law, is they don't understand it," Reyes said. "Managers and supervisors don't understand how to deal with it. If they did, we'd be able to prevent a lot of lawsuits."