AB 1287, Gender Pricing Discrimination Signed by Gov. Newsom

On September 27, Governor Gavin Newsom signed Assembly Bill 1287 by Assembly Members Rebecca Bauer-Kahan and Cristina Garcia related to gender-based pricing. The bill adds Section 51.14 to the Civil Code. Existing law, the Gender Tax Repeal Act of 1995, prohibits a business establishment from discriminating against a person because of the person’s gender with respect to the price charged for services of similar or like kind.

Section One of the bill adds Civil Code Section 51.14, which would become part of the Unruh Civil Rights Act. The bill would define the following terms: “business” (any business that sells goods in this state), “goods” (consumer products), and “substantially similar.”

The definition of “substantially similar” is crucial to this proposed new law. It means two goods that exhibit the following four characteristics (Note that a difference in coloring among any of the goods is not to be construed as a substantial difference):

• No substantial differences in the materials used in production
• The intended use is similar
• The functional design and features are similar
• The brand is the same or both brands are owned by the same individual or entity

The bill would prohibit any person, firm, partnership, company, corporation, or business from charging a different price for any two goods that are substantially similar if those goods are priced differently based on the gender of the individuals for whom the goods are marketed and intended.

Nonetheless, this new section of law does not prohibit price differences in goods or services that are based specifically on the following:

• The amount of time it took to manufacture those goods
• The difficulty in manufacturing those goods
• The cost incurred in manufacturing those goods
• The labor used in manufacturing those goods
• The materials used in manufacturing those goods
• Any other gender-neutral reason for having increased the cost of those goods.

Whenever the Attorney General (AG) has cause to believe there has been an alleged violation of this new section of law, the AG may seek an injunction against continuing violation, with at least five days’ notice to the defendant.

If a court finds a violation, an injunction may be issued by the court without requiring proof that any person has, in fact, been injured or damaged. A court could also make direct restitution.

In addition, if a court determined that there has been a violation of this law, the court may impose a civil penalty not to exceed $10,000 for a first violation and not more than $1,000 for subsequent violations. The total penalty cannot exceed $100,000. Repeat violations can be assessed additional civil penalties in excess of that amount.

Note that each instance of charging a different price for two goods that are substantially similar are considered a single violation. And, finally, this new section of law does not limit a defendant’s liability under the Unruh Civil Rights Act.