NY State of Mind: New State and City Laws (Part 4)

by Reed Smith
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Reed Smith

This is the fourth in a series of blog posts concerning recent employment law developments in New York State and City:

Legislation Update: New York State Legislature Passes Sweeping Anti-Sexual Harassment Legislation

The New York State Legislature has had an eventful year and is showing no sign of slowing down. Adding to the growing federal and state legislation stemming from the #MeToo Movement, on March 30, 2018, Governor Andrew Cuomo signed a Bill containing several changes to the law governing sexual harassment in the workplace.

First, the Bill prohibits mandatory arbitration of sexual harassment claims brought under Article 75 of New York’s Civil Practice Law and Rules (CPLR). Interestingly though – and unless the federal law changes – this provision will be preempted by the Federal Arbitration Act (FAA), which displaces any conflicting state law. The conflict between the two laws will undoubtedly create confusion and tension as the new Bill takes effect. Interestingly, however, there is currently a Bill pending in the Senate, which seeks to amend the FAA to prohibit arbitration clauses in agreements relating to sexual harassment claims. Should the Senate Bill be enacted, the preemption issues surrounding this new Bill will likely be resolved. Additionally, the newly signed New York State Bill states that mandatory arbitration clauses in relation to sexual harassment claims in existing contracts are null and void. The foregoing provision will become effective 90 days after the Bill becomes law.

Next, the Bill prohibits non-disclosure conditions in court-approved settlement agreements of claims involving sexual harassment unless the complainant desires the condition of confidentiality. If the complainant requests a non-disclosure clause, the Bill also attaches a required consideration and revocation period. The requirements mirror those under the Older Workers Benefit Protection Act, and specifically provide complainants with 21 days to consider any non-disclosure condition and 7 days to revoke their agreement to the condition. The foregoing provision will become effective 90 days after the Bill becomes law.

Third, the Bill expands the category of who may seek relief for workplace sexual harassment. Specifically, the Bill permits non-employees, such as contractors, vendors, or consultants to bring claims against employers for sexual harassment – when the employer knew or should have known that these individuals were subjected to sexual harassment in the workplace and failed to take proper action. This expansion will take effect immediately upon enactment of the Bill.

Fourth, the Bill seeks to control the content of sexual harassment policies and trainings by requiring the New York State Division of Human Rights (NYSDHR) to create a model sexual harassment prevention policy and interactive training program. Employers must adopt the NYSDHR’s model policy and training program unless their own policy and program meets or exceeds the minimum standards set forth by the NYSDHR. Further, the sexual harassment policy must be provided, in writing, to all employees on an annual basis. These requirements will become effective 180 days after the Bill becomes law.

Fifth, the Bill requires state contractors bidding on projects to submit a certification, under penalty of perjury, that they have implemented policies and trainings on sexual harassment. This requirement will go into effect on January 1st after the date when the Bill becomes law.

Finally, public employees who were found personally liable for intentional wrongdoing in sexual harassment matters will be required to reimburse the public for their proportionate share of the award paid by any state or public entity to a plaintiff within 90 days of payment.

What Should My Company Do Now?

To ensure that your company is prepared for the upcoming changes under this new Bill, employers should review and revise all template settlement and arbitration agreements to ensure compliance with the foregoing changes. Likewise, employers should stay on the lookout for the NYSDHR’s model sexual harassment policy and interactive training. Once these materials are published, employers must compare them with any existing policies and trainings to weigh whether changes are required.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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