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AB-1615 Gender discrimination: civil actions. (2017-2018)

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Date Published: 02/18/2017 04:00 AM
AB1615:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 1615


Introduced by Assembly Member Eduardo Garcia

February 17, 2017


An act to add Part 2.55 (commencing with Section 55.61) to Division 1 of the Civil Code, and to add Section 425.56 to the Code of Civil Procedure, relating to gender discrimination.


LEGISLATIVE COUNSEL'S DIGEST


AB 1615, as introduced, Eduardo Garcia. Gender discrimination: civil actions.
Existing state and federal law prohibit discrimination based on sex. Existing state law, the Unruh Civil Rights Act, commonly referred to as the Unruh Act, prohibits discrimination on a variety of personal characteristics including sex and defines sex to include pregnancy and childbirth. The act provides that sex includes gender and that gender is sex, and that gender includes gender identity and gender expression. Existing law prohibits a business from boycotting or discriminating, among other actions, based on a characteristic protected by the Unruh Act. Existing law prescribes remedies for violations of these prohibitions, which include actual damages, any amount determined by a jury or a court up to a maximum of 3 times the amount of actual damages but in no case less than $4,000, and attorney’s fees to be determined by the court.
Existing law, the Construction-Related Accessibility Standards Compliance Act, requires an attorney to provide a written advisory with each demand letter or complaint, as defined, sent to or served upon a defendant or potential defendant for any construction-related accessibility claim. The act grants a defendant or potential defendant a stay and an early evaluation conference in regard to the demand or complaint in specified instances. Existing law also authorizes a reduction in potential statutory damages for a small business, as defined, for a construction-related accessibility claim.
This bill would enact the Small Business Gender Discrimination Compliance Act, which would apply to any gender discrimination claim, including, but not limited to, an alleged price difference charged based on gender. Generally, the bill would define a small business as one that has employed 25 or fewer employees on average over the past three years and has averaged annual gross receipts of less than $3,500,000 over those years.
The bill would require an attorney who causes service of a summons and complaint in an action that includes a gender discrimination claim to serve a separate copy of a specified application form and a specified notice to the defendant with the summons and complaint. The bill would require an attorney who appears as counsel for a plaintiff who, representing himself or herself, had previously filed a complaint, to also provide these documents. The bill would permit a small business defendant to file a request for a stay and early evaluation conference in connections with the claim and, if timely filed, the period for filing a response would be tolled. The bill would prescribe requirements for an application for an early evaluation conference and stay by a small business defendant, to include a signed declaration that all alleged gender discrimination violations giving rise to the claim have been corrected.
The bill would require, upon the filing described above, that a court issue an order that, among other things, grants a 90-day stay of proceedings regarding the gender discrimination claim, schedules a mandatory early evaluation conference, as specified, and directs the parties to appear in person to negotiate and enter into a settlement. The order would also require a plaintiff to file with a court and serve on the defendant, as specified, an itemized list of claims, damages, attorney’s fees and costs, and the demand for settlement, if any. The bill would prescribe the circumstances pursuant to which a court would lift a stay. The bill would limit how evidence from the conference would be used in a subsequent proceeding. The bill would require that evaluation conferences be conducted by a superior court judge or commissioner or a court early evaluation conference officer, as defined. The bill would require the Judicial Council, among other things, by January 1, 2018, to prepare and post on its Internet Web site instructions and a form for use by a small business defendant in this regard. The bill would prescribe requirements for provisional application forms until those forms are adopted. The bill would provide that its provisions do not apply to actions brought by specified public prosecutors.
The bill would permit a defendant who does not qualify for an early evaluation conference for a small business defendant as described above, or who forgoes those provisions, to request a mandatory evaluation conference.  The bill would permit a plaintiff, if the defendant does not make this request in responsive pleadings, to request a mandatory evaluation conference. The bill would prescribe procedural requirements in this regard. The bill would require a court to schedule a mandatory evaluation conference within specified times. The bill would prescribe requirements for the court’s notice of conference. The bill would limit how evidence from the conference would be used in a subsequent proceeding. The bill would generally reproduce other provisions connected with the early evaluation conferences described above, including prescribing various duties for Judicial Council and exempting from the bill’s provisions actions brought by public prosecutors.
The bill would authorize a court, with regard to an award of attorney’s fees and costs in a gender discrimination claim, to consider settlement offers made and rejected by the parties without regard to te evidentiary limitations connected to conferences described above. The bill, for unintentional violations, would reduce a small business defendant’s liability for statutory damages in a gender discrimination claim to a minimum of $1,000 for each offense if the defendant has corrected all gender discrimination violations that are the basis for the claim within 30 days of being served, and to a minimum of $2,000 for each offense if the violation is corrected with 60 days.
(2) Existing law requires specified information to be included in the filing of a complaint related to a construction-related accessibility claim if the complaint is filed by or on behalf of a high-frequency litigant. Existing law defines a high frequency litigant for these purposes. Existing law provides for an additional fee of $1,000 to be paid upon the filing of a complaint containing an allegation of a construction-related accessibility claim by a high frequency litigant.
This bill would create a definition of a high-frequency litigant in connection with gender discrimination claims. The bill would make a statement of legislative findings in this regard.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Part 2.55 (commencing with Section 55.61) is added to Division 1 of the Civil Code, to read:

PART 2.55. Small Business Gender Discrimination Compliance Act

55.61.
 This part shall be known, and may be cited, as the Small Business Gender Discrimination Compliance Act.  Notwithstanding any other law, the provisions of this part shall apply to any gender discrimination claim, including, but not limited to, any claim brought under Section 51 or 51.6.

55.62.
 (a) For purposes of this part, the following definitions apply:
(1) “Gender discrimination claim” means any civil claim in a civil action with respect to a business establishment, including, but not limited to, a claim brought under Section 51 or 51.6, based wholly or in part on an alleged price difference charged based on gender.
(2) “Application for stay and early evaluation conference” means an application to be filed with the court that meets the requirements of subdivision (c) of Section 55.63.
(3) “Small business defendant” means a defendant who is a small business described in subdivision (b) of Section 55.66, and who declares that all violations have been corrected, or will be corrected, within 30 days of being served with the gender discrimination complaint.
(b) Unless otherwise indicated, terms used in this part relating to civil procedure have the same meanings that those terms have in the Code of Civil Procedure.

55.63.
 (a) (1) An attorney who causes a summons and complaint to be served in an action that includes a gender discrimination claim, including, but not limited to, a claim brought under Section 51 or 51.6, shall, at the same time, cause to be served a copy of the application form specified in subdivision (c) and a copy of the following notice to the defendant on separate papers that shall be served with the summons and complaint:
ADVISORY NOTICE TO DEFENDANT
YOU MAY BE ENTITLED TO ASK FOR A COURT STAY (AN ORDER TEMPORARILY STOPPING ANY LAWSUIT) AND EARLY EVALUATION CONFERENCE IN THIS LAWSUIT AND MAY BE ASSESSED REDUCED STATUTORY DAMAGES IF YOU MEET CERTAIN CONDITIONS.
If your business is a small business that, over the previous three years, or the existence of the business if less than three years, employs 25 or fewer employees on average over that time period and meets specified gross receipts criteria, you may be entitled to the court stay and early evaluation conference and your minimum statutory damages for each claim may be reduced to $1,000 for each offense, unless the violation was intentional, and if all the alleged gender discrimination claims are corrected within 30 days of being served with the complaint.
If you plan to correct the violations giving rise to the claim, you should take pictures and document any alleged gender discriminatory items asserted to be the basis for a violation before undertaking any corrective action in case a court needs to see the condition before it was corrected.
The court will schedule the conference to be held within 70 days after you file the attached application form.
The court will also issue an immediate stay of the proceedings.  You may obtain a copy of the application form, filing instructions, and additional information about the stay and early evaluation conference through the Judicial Council Internet Web site at www.courts.ca.gov/selfhelp-start.htm.
You may file the application after you are served with a summons and complaint, but no later than your first court pleading or appearance in this case, which is due within 30 days after you receive the summons and complaint.  If you do not file the application, you will still need to file your reply to the lawsuit within 30 days after you receive the summons and complaint to contest it.  You may obtain more information about how to represent yourself and how to file a reply without hiring an attorney at www.courts.ca.gov/selfhelp-start.htm.
You may file the application without the assistance of an attorney, but it may be in your best interest to immediately seek the assistance of an attorney experienced in gender discrimination laws when you receive a summons and complaint.  You may make an offer to settle the case, and it may be in your interest to put that offer in writing so that it may be considered under Section 55.66 of the Civil Code.
(2) An attorney who files a Notice of Substitution of Counsel to appear as counsel for a plaintiff who, acting in propria persona, had previously filed a complaint in an action that includes a gender discrimination claim, including, but not limited to, a claim brought under Section 51 or 51.6, shall, at the same time, cause to be served a copy of the application form specified in subdivision (c) and a copy of the notice specified in paragraph (1) upon the defendant on separate pages that shall be attached to the Notice of Substitution of Counsel.
(b) (1) Notwithstanding any other law, upon being served with a summons and complaint asserting a gender discrimination claim, including, but not limited to, a claim brought under Section 51 or 51.6, a small business defendant may file a request for a court stay and early evaluation conference in the proceedings of that claim prior to or simultaneous with that defendant’s responsive pleading or other initial appearance in the action that includes the claim.  If that defendant filed a timely request for stay and early evaluation conference before a responsive pleading was due, the period for filing a responsive pleading shall be tolled until the stay is lifted.  Any responsive pleading filed simultaneously with a request for stay and early evaluation conference may be amended without prejudice, and the period for filing that amendment shall be tolled until the stay is lifted.
(2) Notwithstanding any other law, if the plaintiff had acted in propria persona in filing a complaint that includes a gender discrimination claim, including, but not limited to, a claim brought under Section 51 or 51.6, a small business defendant who is served with a Notice of Substitution of Counsel shall have 30 days to file an application for a stay and an early evaluation conference.  The application may be filed prior to or after the defendant's filing of a responsive pleading or other initial appearance in the action that includes the claim, except that an application may not be filed in a claim in which an early evaluation conference or settlement conference has already been held on the claim.
(c) (1) An application for an early evaluation conference and stay by a small business defendant shall include:
(A) A signed declaration stating that the defendant is a small business that employs 25 or fewer employees and meets the gross receipts eligibility criteria provided in paragraph (1) of subdivision (b) of Section 55.66 and that all alleged gender discrimination violations giving rise to the claim have been corrected, or will be corrected, within 30 days of the complaint being served upon the defendant.
(B) Evidence that shows correction of all violations within 30 days of the service of the complaint and that was served upon the plaintiff with the reply unless the application is filed prior to completion of the corrections.  In that event, the evidence shall be provided to the court and served upon the plaintiff within 10 days of the court order as provided in paragraph (4) of subdivision (d).  This paragraph shall not be construed to extend the permissible time under subdivision (b) of Section 55.66 to make the corrections.
(C) Both of the following, which shall be confidential documents filed only with the court and not served upon or available to the plaintiff:
(i) Proof of the defendant’s number of employees, as shown by wage report forms filed with the Employment Development Department.
(ii) Proof of the defendant’s average gross receipts for the previous three years, or for the existence of the business if less than three years, as shown by a federal or state tax document.
(2) Provisional request and notice forms may be used and filed by a small business defendant until forms are adopted by the Judicial Council for those purposes pursuant to subdivision (i).
(3) Provisional request and notice forms and subsequent Judicial Council forms shall include the defendant’s declaration of proof of service of the application, the notice of the court’s order, and the court's order pursuant to subdivision (d).
(d) Upon the filing of an application for stay and early evaluation conference by a small business defendant, the court shall immediately issue an order that does all of the following:
(1) Grants a 90-day stay of the proceedings with respect to the gender discrimination claim.
(2) Schedules a mandatory early evaluation conference for a date as soon as possible from the date of the order, but in no event later than 70 days after issuance of the order, and in no event earlier than 50 days after the filing of the request.
(3) Directs the parties, and any other person whose authority is required to negotiate and enter into settlement, to appear in person at the time set for the conference.  Appearance by counsel shall not satisfy the requirement that the parties or those with negotiation and settlement authority personally appear, provided, however, that the court may allow a party who is unable to attend in person for good cause to participate in the hearing by telephone or other alternative means or through a representative authorized to settle the case.
(4) Directs a small business defendant who has filed a declaration stating that the violation or violations have been corrected, or will be corrected within 30 days of service of the complaint to file with the court and serve on the plaintiff within 10 days after issuance of the court order evidence of correction of the violation or violations, if that evidence showing correction was not filed previously with the application and served on the plaintiff.
(5) Directs the plaintiff to file with the court and serve on the defendant at least 15 days before the date of the conference a statement that includes, to the extent reasonably known, for use solely for the purpose of the early evaluation conference, all of the following:
(A) An itemized list of the specific claims that are the basis of the claimed violations constituting the basis of the gender discrimination claim in the plaintiff's complaint.
(B) The amount of damages claimed.
(C) The amount of attorney’s fees and costs incurred to date, if any, that are being claimed.
(D) Any demand for settlement of the case in its entirety.
(e) (1) A party failing to comply with any court order may be subject to court sanction at the court’s discretion.
(2) The court shall lift the stay when a small business defendant has failed to file and serve the evidence showing correction of the violation or violations as required by law.
(3) The court may lift the stay at the conclusion of the early evaluation conference upon a showing of good cause by the plaintiff.  
(f) All discussions at the early evaluation conference shall be subject to Section 1152 of the Evidence Code.  It is the intent of the Legislature that the purpose of the evaluation conference shall include, but not be limited to, evaluation of all of the following, as applicable:
(1) Whether the defendant is a small business defendant and whether all violations giving rise to the claim have been corrected within the specified time periods.
(2) Whether the case, including any claim for damages or injunctive relief, can be settled in whole or in part.
(3) Whether the parties should share other information that may facilitate early evaluation and resolution of the dispute.
(g) Nothing in this section precludes any party from making an offer to compromise pursuant to Section 998 of the Code of Civil Procedure.
(h) Early evaluation conferences shall be conducted by a superior court judge or commissioner, or a court early evaluation conference officer. For purposes of this subdivision, a “court early evaluation conference officer” means an attorney employed by the court for the purposes of conducting early evaluation conferences. Attorneys serving in this capacity may also be utilized by the court for other purposes not related to these proceedings.
(i) (1) The Judicial Council shall, by January 1, 2018, prepare and post on its Internet Web site instructions and a form for use by a small business defendant to file an application for stay and early evaluation conference as provided in subdivisions (b) and (c), a form for the court’s notice of stay and early evaluation conference, and any other forms appropriate to implement the provisions relating to early evaluation conferences.  Until those forms are adopted, provisional forms that substantially meet the requirements set forth in subdivision (c) may be used.
(2) (A) A provisional application form shall include the following declarations of the defendant as to the basis for the application:
(i) The defendant is a small business described in paragraph (1) of subdivision (b) of Section 55.66.
(ii) The violation or violations giving rise to the claim have been corrected, or will be corrected within 30 days of the complaint being served.
(B) The provisional application shall include a request that the court order the small business defendant to file with the court and serve on the plaintiff evidence showing correction of the violation or violations within 10 calendar days after issuance of the court order, if that evidence showing correction was not filed previously with the application and served on the plaintiff.
(3) The Judicial Council shall also prepare and post on its Internet Web site instructions and cover pages to assist plaintiffs and defendants, respectively, to comply with their filing responsibilities.  The cover pages shall also provide for the party’s declaration of proof of service of the pertinent document served under the court order.
(j) This section shall not apply to any action brought by the Attorney General or by any district attorney, city attorney, or county counsel.
(k) Nothing in this part is intended to affect existing law regarding class action requirements.

55.64.
 (a) A defendant who does not qualify for an early evaluation conference pursuant to Section 55.63, or who forgoes the provisions of Section 55.63, may request a mandatory evaluation conference.  A plaintiff may, if the defendant does not make the request with the filing of the responsive pleadings, request a mandatory evaluation conference by filing an application within 15 days of the defendant’s filing of responsive pleadings.
(b) Upon being served with a summons and complaint asserting a gender discrimination claim, including, but not limited to, a claim brought under Section 51 or 51.6, a defendant may file an application for a mandatory evaluation conference in the proceedings of that claim simultaneous with the defendant’s responsive pleading or other initial appearance in the action that includes the claim.  Until the application form for the mandatory evaluation conference is developed by the Judicial Council and posted on its Internet Web site pursuant to subdivision (i), a defendant may request the calendaring of the mandatory evaluation conference in a separate application filed with the defendant’s responsive pleadings.
(c) Upon the filing of a request or application for a mandatory evaluation conference by a defendant or plaintiff, the court shall schedule a mandatory evaluation conference for a date as soon as possible from the date of the request or application, but in no event later than 180 days after the date of request or application, or earlier than 120 days after the filing of the request or application.  Upon mutual stipulation for an extension of the conference date, the mandatory evaluation conference may be extended for up to 30 days.  The court’s notice of conference shall also do all of the following:
(1) Direct the parties, and any other person whose authority is required to negotiate and enter into settlement, to appear in person at the time set for the conference.  Appearance by counsel shall not satisfy the requirement that the parties or those with negotiation and settlement authority personally appear, provided, however, that the court may allow a party who is unable to attend in person for good cause to participate in the hearing by telephone or other alternative means or through a representative authorized to settle the case.
(2) Direct the plaintiff to file with the court and serve on the defendant at least 30 days before the date of the conference a statement that includes, to the extent reasonably known, for use solely for the purpose of the early evaluation conference, all of the following:
(A) An itemized list of the specific claims that are the basis of the claimed violations constituting the basis of the gender discrimination claim in the plaintiff’s complaint.
(B) The amount of damages claimed.
(C) The amount of attorney’s fees and costs incurred to date, if any, that are being claimed.
(D) Any demand for settlement of the case in its entirety.
(3) Direct the defendant to file with the court and serve on the plaintiff, at least 30 days before the date of the mandatory evaluation conference, a statement of the defendant detailing any remedial action or remedial correction undertaken, or to be undertaken, by the defendant to correct the alleged violations.
(d) A party failing to comply with any court order is subject to court sanction at the court’s discretion.
(e) All discussions at the mandatory evaluation conference shall be subject to Section 1152 of the Evidence Code.  It is the intent of the Legislature that the purpose of the evaluation conference shall include, but not be limited to, evaluation of all of the following:
(1) The current condition of the business establishment and the status of any plan of correction, including whether the defendant has corrected, or is willing to correct, the alleged violations, and the timeline for doing so.
(2) Whether the case, including any claim for damages or injunctive relief, can be settled in whole or in part.
(3) Whether the parties should share other information that may facilitate evaluation and resolution of the dispute.
(f) Nothing in this section precludes any party from making an offer to compromise pursuant to Section 998 of the Code of Civil Procedure.
(g) The court may schedule additional conferences.
(h) Mandatory evaluation conferences shall be conducted by a superior court judge or commissioner, or by a court early evaluation conference officer as provided in subdivision (h) of Section 55.63.
(i) (1) The Judicial Council shall prepare and post on its Internet Web site instructions and a form for a party to use to file an application for a mandatory evaluation conference and a form for the court’s notice of the mandatory evaluation conference.  Until those forms are adopted, a party and the court may use an ad hoc form that complies with the requirements of this section.
(2) The Judicial Council shall also prepare and post on its Internet Web site instructions and cover pages to assist plaintiffs and defendants, respectively, to comply with their filing responsibilities under subdivision (c).
(j) The mandatory evaluation conference may, at the court’s discretion, be scheduled or combined with the case management conference within the time period specified in subdivision (c).
(k) This section shall not apply to any action brought by the Attorney General, or by any district attorney, city attorney, or county counsel.

55.65.
 Notwithstanding paragraph (5) of subdivision (d) of Section 55.63 or paragraph (2) of subdivision (c) of Section 55.63, in determining an award of reasonable attorney’s fees and recoverable costs with respect to any gender discrimination claim, the court may consider, along with other relevant information, written settlement offers made and rejected by the parties.  Nothing in this section affects or modifies the inadmissibility of evidence regarding offers of compromise pursuant to Section 1152 of the Evidence Code, including, but not limited to, inadmissibility to prove injury or damage.

55.66.
 (a) Statutory damages under subdivision (a) of Section 52 may be recovered in a gender discrimination claim based on each particular transaction wherein the plaintiff was discriminated against pursuant to subdivision (a) of Section 51.6 or each particular occasion upon which the plaintiff was exposed to a violation pursuant to subdivision (f) of Section 51.6.
(b) (1) Notwithstanding any other law, a small business defendant’s liability for statutory damages in a gender discrimination claim against a business establishment is reduced to a minimum of one thousand dollars ($1,000) for each offense if the defendant demonstrates both of the following:
(A) The defendant has corrected all gender discrimination violations that are the basis of a claim within 30 days of being served with the complaint.
(B) The defendant is a small business defendant if it has employed 25 or fewer employees on average over the past three years, or for the years it has been in existence if less than three years, as evidenced by wage report forms filed with the Employment Development Department, and has average annual gross receipts of less than three million five hundred thousand dollars ($3,500,000) over the previous three years, or for the years it has been in existence if less than three years, as evidenced by federal or state income tax returns.  The average annual gross receipts dollar amount shall be adjusted biannually by the Department of General Services for changes in the California Consumer Price Index for All Urban Consumers, as compiled by the Department of Industrial Relations.  The Department of General Services shall post that adjusted amount on its Internet Web site.
(2) Notwithstanding any other law, a small business defendant’s liability for statutory damages in a gender discrimination claim against a business establishment is reduced to a minimum of two thousand dollars ($2,000) for each offense if the defendant demonstrates both of the following:
(A) The defendant has corrected all gender discrimination violations that are the basis of a claim within 60 days of being served with the complaint.
(B) The defendant is a small business defendant as defined by paragraph (1) of subdivision (b).
(3) This subdivision shall not be applicable to intentional violations.
(4) Nothing in this subdivision affects the awarding of actual damages, or affects the awarding of treble actual damages.
(c) This section does not alter the applicable law for the awarding of injunctive or other equitable relief for a violation or violations of one or more gender discrimination claims, nor alter any legal obligation of a party to mitigate damages.
(d) In assessing liability under subdivision (a), in any action alleging multiple claims for the same gender discrimination violation on different particular occasions, the court shall consider the reasonableness of the plaintiff’s conduct in light of the plaintiff’s obligation, if any, to mitigate damages.

SEC. 2.

 Section 425.56 is added to the Code of Civil Procedure, to read:

425.56.
 (a) The Legislature finds and declares all of the following:
(1) Protection of the civil rights between genders is of the utmost importance to this state, and private enforcement is the essential means of achieving that goal, as the law has been designed.
(2) Many gender discrimination claims pursuant to Section 51 or 51.6 of the Civil Code are filed by a few law firms and repeatedly by the same aggrieved party. Therefore, a very small number of plaintiffs have filed a disproportionately large number of the gender discrimination claims in the state. Moreover, these lawsuits are frequently filed against small businesses on the basis of boilerplate complaints, apparently seeking quick cash settlements rather than correction of the alleged discriminatory practices.
(3) Therefore, given these special and unique circumstances, the provisions of this section are warranted for this limited group of plaintiffs.
(b) For the purposes of this article, “high-frequency litigant” means a person, except as specified in paragraph (3), who utilizes court resources in actions arising from alleged gender discrimination claims pursuant to Section 51 or 51.6 of the Civil Code at such a high level that it is appropriate that additional safeguards apply so as to ensure that the claims are warranted. A “high-frequency litigant” means one or more of the following:
(1) A plaintiff who has filed 10 or more complaints alleging a gender discrimination claim pursuant to Section 51 or 51.6 of the Civil Code within the 12-month period immediately preceding the filing of the current complaint alleging a gender discrimination claim.
(2) An attorney who has represented as attorney of record 10 or more high-frequency litigant plaintiffs in actions that were resolved within the 12-month period immediately preceding the filing of the current complaint alleging a gender discrimination claim pursuant to Section 51 or 51.6 of the Civil Code, excluding all of the following actions:
(A) An action in which an early evaluation conference was held pursuant to Section 55.63 or 55.64 of the Civil Code.
(B) An action in which judgment was entered in favor of the plaintiff.
(C) An action in which the gender discrimination violations alleged in the complaint were remedied in whole or in part, or a favorable result was achieved, after the plaintiff filed a complaint or provided a demand letter.
(3) This section does not apply to an attorney employed or retained by a qualified legal services project or a qualified support center, as defined in Section 6213 of the Business and Professions Code, when acting within the scope of employment to represent a client in asserting a gender discrimination claim, or the client in such a case.