United States: Proposed New York City Council Legislation Would Add Private Right Of Action To Earned Sick Time Act And Prohibit Non-Competes For Low-Wage Employees

New legislation introduced in the New York City Council would add a private right of action to the Earned Sick Time Act (Introduction 1667) and prohibit employers from entering into a covenant not to compete with any low-wage employee of that employer (Introduction 1663).

Introduction 1667 was sponsored by the Council's Deputy Leader for Policy, Brad Lander, at the Stated Meeting on July 20, 2017. The Council's Courts and Legal Services Chair, Rory Lancman, sponsored Introduction 1663 at the same meeting.

Both bills have been referred to the Committee on Civil Service and Labor. Public committee hearings on these bills are required before they can move forward in the legislative process.

Introduction 1667 – Earned Sick Time Act Private Right of Action

Introduction 1667 would add a private right of action to the Earned Sick Time Act (ESTA).

Currently, the law allows employees to file a complaint only with the Department of Consumer Affairs. Under the new legislation, employees also could file a civil action in any court with jurisdiction to enforce their rights under the ESTA.

The bill would allow "organizations," as well as any person, to file a complaint with the Department of Consumer Affairs. It also would add the following court remedies for violations of the ESTA:

  • Compensatory damages, injunctive and declaratory relief, and attorney's fees and costs;
  • For each instance of sick time taken by an employee, but unlawfully not compensated by the employer – three times the wages that should have been paid or $250, whichever is greater;
  • For each instance of sick time requested by an employee, but unlawfully denied by the employer – $500;
  • For each instance of unlawful retaliation short of unlawful discharge – $500 and equitable relief; and
  • For each instance of unlawful discharge from employment – $2,500 and equitable relief, including reinstatement.

Introduction 1667 also would allow a court to consider "the goals of deterring future violations, encouraging employees to report violations, and protecting and improving the public health; the degree of good or bad faith of the employer; the gravity of the violation; any history of previous violations; and the compliance or noncompliance with recordkeeping, notice, and other requirements of this chapter."

Currently, under the ESTA, a complaint with the Department of Consumer Affairs must be filed within two years of when the claimant knew or should have known of an alleged violation. The proposal would extend that time limitation to filing complaints in courts with jurisdiction.

The legislation also would give authority to the City's Corporation Counsel to initiate actions to correct violations of the ESTA, including to secure permanent injunctions, to enjoin certain practices, or to mandate compliance with the ESTA.

Once passed by the City Council, Introduction 1667 would take effect immediately upon signature by the Mayor.

For additional information on New York's Earned Sick Time Act, see our articles, New York City Enacts Paid Sick Day Law, New York City Earned Sick Time Act – An Update, and New York City Earned Sick Time FAQs Updates.

Introduction 1663 – Prohibiting Certain Non-Compete Covenants

Introduction 1663 would prohibit non-compete covenants for low-wage workers.

The proposed revisions to the New York City Administrative Code would prohibit employers from entering into agreements that would restrict "low-wage" employees from working for another employer for a specified period of time, working in a specific geographic area, or doing similar work for another employer. An employer also would be prohibited from requiring a potential employee who is not a low-wage worker to enter into a non-compete covenant, unless the potential for such a requirement is disclosed, in writing, to an employee at the beginning of the hiring process.

For the purpose of Introduction 1663, a "low-wage" worker would be those defined as "clerical and other workers" under Article 6 of the New York State Labor Law. Thus, the prohibition would apply to any employee who is not a "manual worker," "railroad worker," or "commission salesman." It would not apply to an employee acting in a bona fide executive, administrative, or professional capacity with earnings in excess of $900 a week.

The City's Office of Labor Standards within the Department of Consumer Affairs would be required to carry out a rulemaking process and then given the authority to enforce Introduction 1663.

Introduction 1663 would take effect 120 days after being signed by the Mayor.

For additional information on non-compete covenants, see our articles, including New York Clarifies Scope of Covenant Against Business Seller's Solicitation of Former Clients.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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