Senate Bill 477 amends the Fair Employment and Housing Act (FEHA) to significantly strengthen the investigatory and prosecutorial tools available to the California Civil Rights Department (CRD), in a manner which has consequences for every employer.  Collectively, these changes provide the CRD with the flexibility to pursue larger, more complex, and potentially class-action or pattern-or-practice claims with greater depth and fewer administrative hurdles.

One of the most significant changes lies in the tolling of the statute of limitations – the deadline for an employee to bring a civil lawsuit.  Under prior law, the one-year clock to sue began running after the CRD issued a right-to-sue notice.  Beginning on January 1, 2026, SB 477 provides for a new tolling period that applies if the employee appeals the CRD’s decision to close their complaint.  If the CRD affirms its initial closure on appeal, the employee is granted an additional one year from the date of the appeal decision to file a civil action.  This means the timeline for potential litigation after a CRD closure is substantially extended, moving the focus from a single closure notice to a potentially protracted period of administrative review followed by a renewed threat of suit.  For employers, this necessitates preserving all records related to the complaint and internal investigation for a much longer and more uncertain period.

Beyond the extension of the litigation deadline, SB 477 also grants the CRD enhanced administrative and procedural flexibility to handle complex cases.  The CRD was previously required to issue a right-to-sue letter not later than one year after the filing of a complaint with the CRD or, in the case of a group or class complaint, within two years of the filing of a complaint.  The law now explicitly allows the CRD, when both the respondent (the employer) and the CRD agree in writing, to toll the deadline for issuing a right-to-sue notice if the investigation requires more time for a thorough review.  This is particularly relevant in complicated matters involving extensive evidence or multiple witnesses.  Similarly, the deadlines are now tolled for the pendency of a petition to compel discovery and for the duration of any timely appeal process. 

A final, clarifying point for employers involves the CRD's treatment of claims that potentially involve more than one employee.  Among other changes, SB 477 amends Government Code section 12926 to define that a “group or class complaint” under FEHA includes any complaint alleging a pattern or practice of unlawful activity.  While the CRD already had jurisdiction over such cases, this provision acts to codify and clarify the department’s authority, indicating a legislative intent to identify and handle discrimination and harassment cases as a collective matter from the outset, when it is appropriate to do so.  This means a single employee complaint, if it points to a broader company-wide issue, will now be treated as a company-wide CRD investigation, necessitating a broader and more comprehensive defense strategy by the employer.

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