Implementing or amending workplace policies as a reaction to a single event, without conducting a thorough compliance review, can expose employers to considerable liability. This is best illustrated by the California Civil Rights Department’s recent settlement of $255,000 regarding an individual claim involving allegations of harassment, discrimination, and retaliation based on national origin or ancestry. 

The SMUD Museum of Science and Curiosity (MOSAC) instructed an employee of Arab ancestry not to wear a keffiyeh (a traditional Palestinian scarf) to work, deeming it a “political” item, which constituted harassment and retaliation. After management repeatedly pressured the employee to stop wearing the keffiyeh and made derogatory comments about what they perceived it to represent, a new policy was implemented prohibiting political symbols at work. The keffiyeh was the only item banned as a political symbol under the policy.  

After submitting an internal complaint, the employee was subjected to a campaign of harassment and retaliation, including an instance of being sent home early for perceived insubordination for wearing a different type of scarf. Ultimately, the employee was placed on indefinite unpaid administrative leave solely because of their alleged violations of the new policy. 

Following an investigation, CRD found MOSAC discriminated against, harassed, and retaliated against the employee and offered mediation. Under the settlement, without admitting wrongdoing, the museum agreed to: 

• Rescind the policy banning political symbols and allow cultural clothing, accessories, tattoos, and hairstyles. 

• Provide annual anti-discrimination training for three years for museum leadership. 

• Update internal civil-rights complaint policies and submit them to CRD for review. 

• Notify staff and board members of CRD’s findings. 

• Issue a formal apology to the complainant. 

• Pay $255,000 for lost wages and other damages. 

What Does it Mean? 

California law prohibits employers from disciplining workers for speaking out against discrimination or treating employees differently because of protected categories, such as their national origin or ancestry. Ultimately, the principal compliance lesson here is that workplace policies should be developed through a neutral, business-based process and reviewed for consistency with applicable anti-discrimination, anti-harassment, and anti-retaliation requirements.  

Policies adopted in reaction to a specific employee or workplace complaint can create significant exposure if they are framed or enforced in a way that targets, or has a disproportionate impact on, conduct associated with a protected characteristic such as national origin or ancestry. The MOSAC settlement also underscores the importance of maintaining a clear non-retaliation framework when employees raise internal concerns. 

A key compliance-related takeaway includes ensuring that handbook policies are not drafted in the heat of the moment. Before implementing a new rule: 

• Evaluate the underlying business justification; 

• Assess whether the proposed language could implicate protected categories or protected activity; 

• Confirm that the rule can be applied consistently in practice; and 

• Seek legal counsel and review where appropriate. 

The MOSAC settlement is also a great reminder that there is no better time than the present to conduct an internal audit of your workplace policies and procedures. Here are a few suggestions: 

1. Conduct a targeted review of handbook provisions governing dress, expression, workplace conduct, and complaint reporting to confirm they are supported by legitimate business objectives and do not single out protected characteristics or protected activity. 
2. Implement a policy-development protocol requiring HR and, where appropriate, employment counsel to review proposed policy changes before rollout, particularly when the change is prompted by a specific workplace incident or complaint. 
3. Train managers and HR personnel on consistent policy enforcement, accommodation and complaint-escalation obligations, and the prohibition on retaliation when employees raise internal concerns or request clarification about workplace rules.