The New York State Legislature is keeping busy with new employment legislation as the local and national economies continue to recover from the COVID-19 pandemic.
On April 21, 2021, both houses of the Legislature announced passage of portions of the NY Hero Act, which requires extensive new workplace health and safety protections in response to the pandemic. The Legislature is also advancing two additional employment-related bills: one would ban “no-rehire” clauses in employment settlement agreements, and the other would prohibit “no-poach” agreements between franchisors and franchisees.
NY Hero Act
Despite pushback from the business community, the NY Hero Act has passed both houses of the Legislature. When signed by the Governor (as is expected), the law will provide the following:
- Airborne Infectious Disease Workplace Safety Standard. The law directs the Department of Labor to establish minimum requirements for preventing the spread of airborne infectious diseases in the workplace. The standards must differentiate among industries and must address several areas, including (1) employee health screenings, (2) face coverings, (3) personal protective equipment, (4) social distancing, and (5) cleaning and disinfecting protocols. Employers will be required either to adopt the DOL-issued standard that is relevant to their industry and workforce, or to establish their own disease prevention plan that meets or exceeds the requirements of the DOL-issued standard. Employers will also be required to post their plan in the workplace and distribute it to their employees upon hire and/or after reopening following a closure due to an airborne infectious disease.
- Non-Retaliation. Employers will be barred from retaliating against employees for reporting violations of their standard, for reporting concerns of exposure to such diseases, and for refusing to work where the employee reasonably believes in good faith that the workplace exposes them to an unreasonable risk of exposure.
- Penalties. The law authorizes the DOL to assess penalties to a non-compliant employer of at least $50 per day for failing to adopt a relevant standard or disease prevention plan, and a fine of $1,000-$10,000 for failing to comply with the plan.
- Private Right of Action. The law also provides employees with the right to bring a lawsuit seeking injunctive relief against an employer for failing to comply with the above provisions of the law. Courts may enjoin the employer’s conduct and award the plaintiff attorneys’ fees and costs and liquidated damages up to $20,000 unless the employer demonstrates good faith attempts to comply with the standard.
- Creation of Workplace Safety Committees. The law requires employers to permit employees to form a joint labor-management workplace safety committee with employee and employer designees. The committee must be allowed to raise workplace health and safety concerns, review employer workplace safety policies, participate in government site visits relating to workplace health and safety standards, and attend committee meetings and trainings related to workplace health and safety standards.
The effective date of the mandate for the DOL to issue the industry-specific standards is 30 days from the Governor’s signature. While the statute is not crystal clear on this point, it appears that employers will not be required to establish their own disease prevention plan until the DOL issues its standards. Other aspects of the law have more immediate implications: the non-retaliation provision takes effect 30 days after the Governor’s signature, and the workplace safety committee provisions are effective 180 days after signature.
Prohibition of No-Rehire Clauses
Bill S766, which is currently pending before the full State Senate, would prohibit employers from including clauses in settlement agreements that prevent employees from applying for, accepting, or engaging in future employment with the employer, or any entity or entities related to such employer. The bill declares that an agreement containing such a provision is unenforceable—except that the employer would still be bound by its obligations under the agreement to include full compensation/severance pay for the employee.
As proposed, this bill would take effect 60 days following the Governor’s signature. In anticipation of passage, employers should carefully review their settlement templates for New York employees, as no-rehire clauses are common provisions in separation and settlement agreements involving terminated employees.
Bill S562, known as the End Employer Collusion Act, prohibits agreements between franchisors and franchisees that restrict such entities from hiring the current or former employees of their franchisor or other franchisees. Any such agreements would be deemed void as a matter of law. Additionally, the bill provides a private right of action for any employee who was denied employment pursuant to such a no-poach agreement and authorizes compensatory damages, punitive damages, and attorneys’ fees.
As proposed, this bill would take effect immediately upon the Governor’s signature.
Next Steps for Employers
In the short-term, employers should begin working with counsel to develop compliant policies and procedures under the NY Hero Act, which is expected to be signed shortly. Employers should also consider how the prohibitions on no-rehire clauses and no-poach agreement might impact their operations.
We will continue to monitor developments and provide updates as appropriate.