Early on Saturday, March 31, 2018, the New York State Legislature passed a budget bill that includes several changes and additions to workplace sexual harassment law. Governor Andrew Cuomo applauded the measure as the “nation's most aggressive anti-sexual harassment agenda.” He is expected to sign the bill into law.

Programs for All Employers

The budget bill amends the state's labor law by requiring all employers to adopt a "sexual harassment prevention policy" as well as a "sexual harassment prevention training program." The bill further directs the New York State Department of Labor ("DOL") and the New York State Division of Human Rights ("SDHR") to publish a model sexual harassment prevention policy and a model prevention program that employers may utilize, rather than creating their own policies and programs. The amended law will also require employers to provide the new written policies to their employees and to conduct annual sexual harassment prevention training.

New Model Sexual Harassment Prevention Policy

The model prevention policy will include some items that are already present in most employers’ anti-harassment policies but will add new items as well. The model policy will include:

• A statement prohibiting sexual harassment, as defined by the DOL and SDHR, with examples of prohibited sexual harassment
• Information on federal and state statutes concerning sexual harassment
• A standard complaint form for victims of sexual harassment
• A procedure for "timely and confidential investigation of complaints," which will "ensure due process for all parties"
• Information for employees of their rights and "all available forums for adjudicating sexual harassment complaints administratively and judicially"
• A clear statement that sexual harassment is considered a form of employee misconduct, and that supervisors and managers will be held accountable if they "knowingly allow such behavior"
• A clear statement that retaliation against individuals reporting sexual harassment is unlawful

The amended law requires employers to either adopt the state's model policy (to be published by the DOL) or establish a sexual harassment prevention policy that "equals or exceeds" the model policy. The policy must be "provided to all employees in writing" as well.

New Model Sexual Harassment Prevention Training Program

Along with the new model prevention policy requirement, the bill also amends the labor law by requiring all employers to adopt a model sexual harassment prevention training program. Like the model policy, the DOL and SDHR will produce a model sexual harassment prevention training program that employers may utilize. Under the bill, the state's model training program will include:

• An explanation of sexual harassment, as defined by the state
• Examples of conduct that constitute unlawful sexual harassment
• Information concerning federal and state laws regarding sexual harassment
• Information concerning the rights of employees who complain about sexual harassment

Notably, employers will be required to conduct sexual harassment prevention training for “all employees” on an annual basis.  Like the model policy, employers may adopt the state's model training program or produce their own program that "equals or exceeds" the minimum standards in the model program.

In addition, all state contractors will have to certify in all bid proposals that they have adopted the model policy and model program.  Finally, the amended law also authorizes the DOL to issue new regulations that may further implement the development and adoption of the model policy and model training program.  The amended law regarding model policies will take effect 180 days after it is enacted.

Expanded Protections for Non-Employees

An increasing number of workplaces are made up of a mix of independent contractors, vendors, and freelancers, along with traditional employees. Typically, only "employees" are protected by workplace harassment laws. The budget bill expands state law by holding employers liable to "non-employees" who suffer sexual harassment in the employer's workplace.

Specifically, the bill amends the state’s Human Rights Law (enforced by the SDHR) by making it "an unlawful discriminatory practice for an employer to permit sexual harassment of non-employees in its workplace." Such "non-employees" may include contractors, subcontractors, vendors, consultants, or any "other person providing services pursuant to a contract in the workplace." This provision will take effect immediately upon the bill being signed into law.

Prohibition on Mandatory Arbitration Clauses

Many employment agreements include a "mandatory arbitration clause" for disputes between an employee and his or her employer. As relevant to sexual harassment, mandatory arbitration clauses require individuals who complain of unlawful sexual harassment to arbitrate any claims against the employer, rather than bring them in court or before an administrative agency like the SDHR or EEOC. Arbitration in this context is usually kept confidential.

The budget bill plainly seeks to prohibit confidential arbitration for sexual harassment complaints. Under the amended law, "any clause or provision in any contract" that requires "mandatory arbitration to resolve any allegation or claim of unlawful discriminatory practice of sexual harassment" will be "null and void."  This provision will take effect 90 days after it is enacted.

Prohibition on Mandatory Non-Disclosure Agreements

Whether arbitrated or litigated in court, settlements of sexual harassment complaints have historically been kept confidential. Confidentiality is typically achieved by a settlement agreement's confidentiality provision, or other similar "nondisclosure agreements."

As with mandatory arbitration, the budget bill seeks to do away with mandatory non-disclosure agreements in sexual harassment cases. Going forward, employers will not "have the authority" to include "any term or condition that would prevent the disclosure" of the complaint in any settlement agreement relating to sexual harassment. Sexual harassment plaintiffs, however, will retain the option of abiding by a confidentiality provision if they so choose. If an employer offers a confidentiality provision, the employee will have 21 days to consider the offer. But even if the employee agrees to it, he or she will have 7 days after agreement to revoke his or her acceptance. In other words, employees will get broad bargaining power to choose whether to keep sexual harassment complaints private. This provision will take effect 90 days after it is enacted.

Personal Liability for Public Employees

Finally, the budget bill imposes personal liability on public employees found guilty of intentional sexual harassment. If a public employee is found guilty of sexual harassment by a “final judgment” and the agency that employs him or her pays any portion of a monetary award to the individual complaining of sexual harassment, the public employee will have to reimburse the agency within ninety days of the agency’s payment.  In other words, public employees will have to repay the agency or entity that employs them if the agency or entity covers the monetary amount awarded to a sexual harassment plaintiff.

We will provide additional guidance as model policies become available and upon Governor Cuomo signing the bill into law.