United States: A Call To Action: Employers In New York Should Act Swiftly To Comply With Sweeping Legislative Changes Regarding Sexual Harassment

On April 12, 2018, Governor Andrew Cuomo signed into law the New York State Budget Bill for Fiscal Year 2019, which included a number of key initiatives aimed at providing greater protection against sexual harassment in the workplace. Just one day earlier, on April 11, the New York City Council passed a package of bills, collectively referred to as the Stop Sexual Harassment in NYC Act, similarly targeting sexual harassment. The Act currently awaits Mayor Bill de Blasio's signature, which is expected in the coming days. Both pieces of legislation significantly expand employer obligations, most notably by (1) extending sexual harassment protections to nonemployees; (2) mandating annual "interactive" sexual harassment training; (3) requiring employers to adopt written sexual harassment policies and, more importantly, dictating the content of such policies; (4) prohibiting mandatory predispute arbitration of sexual harassment claims; and (5) prohibiting nondisclosure agreements for sexual harassment claims without the complainant's consent. These and other highlights of this landmark legislation are outlined below.

NEW YORK STATE

Sexual Harassment Protections Extended to Nonemployees (Part KK, Subpart F)

Effective immediately, the Budget Bill now makes it an unlawful employment practice under the New York State Human Rights Law (SHRL) for employers to "permit" sexual harassment of nonemployees, including contractors, subcontractors, vendors, consultants or other persons providing services pursuant to a contract in the workplace (or employees of any such individuals/entities).

While the New York City Human Rights Law (CHRL) has long protected independent contractors, state (and federal) anti-discrimination law traditionally had not. The Budget Bill imposes liability for sexual harassment against independent contractors and other nonemployees "when the employer, its agents or supervisors knew or should have known that such non-employee was subjected to sexual harassment in the employer's workplace, and the employer failed to take immediate and appropriate corrective action."

Notably, "sexual harassment" is not defined within the Budget Bill, which likely means it will be interpreted in accordance with court precedent defining the same, unless the state issues implementing regulations defining the term.1

Required Sexual Harassment Policies (Part KK, Subpart E)

Effective October 9, 2018, the Budget Bill also amends the New York Labor Law to require the New York State Department of Labor (NYSDOL) and the New York State Division of Human Rights (NYSDHR) to collaborate to develop a model sexual harassment prevention policy, and requires all New York employers to either adopt the model policy or develop their own policy that meets or exceeds the model's standards. Although no timetable for the development of the model policy has been established thus far, the model sexual harassment prevention policy is required to contain the following elements:

  • A statement prohibiting sexual harassment;
  • Examples of prohibited conduct that would constitute sexual harassment;
  • Information concerning the federal and state statutory provisions concerning sexual harassment and remedies available to victims, along with a statement that there may be additional applicable laws;
  • A standard complaint form;
  • The procedure for timely and confidential investigation of complaints;
  • A statement informing employees of their rights of redress and available forums for adjudicating sexual harassment complaints administratively and judicially;
  • A statement that sexual harassment is a form of employee misconduct, and that sanctions will be enforced against individuals engaging in sexual harassment and managers and supervisory personnel who knowingly allow such behavior to continue; and
  • A statement that retaliation against individuals reporting sexual harassment or who testify or assist in any proceeding is unlawful.

Although many New York employers likely already have sexual harassment policies largely compliant with these requirements, the mandates to include (1) specific statutory remedies available to victims of sexual harassment under state and federal law; (2) a standard complaint form; and (3) information concerning employees' rights of redress and available forums for adjudicating sexual harassment complaints both with administrative agencies and in the courts undoubtedly will be new to many.

Mandatory Sexual Harassment Training (Part KK, Subpart E)

Also effective October 9, 2018, the Budget Bill requires the NYSDOL and NYSDHR to develop a model sexual harassment prevention training program and requires employers in the state to either present the state-approved model or their own model compliant with state standards on an annual basis to all employees, including managers and supervisors. The training program must be "interactive" (which is undefined in the Budget Bill) and contain the following elements:

  • An explanation of sexual harassment consistent with guidance issued by NYSDOL/NYSDHR;
  • Examples of conduct that would constitute unlawful sexual harassment;
  • Information addressing conduct by supervisors and additional responsibilities for supervisors;
  • Information concerning the federal and state statutory provisions concerning sexual harassment and remedies available to victims; and
  • Information concerning employees' rights of redress and all available forums for adjudicating complaints.

Mandatory Arbitration Agreements for Sexual Harassment Claims Prohibited (Part KK, Subpart B)

Effective July 11, 2018, the Budget Bill further amends the New York Civil Practice Law and Rules (CPLR) to render "null and void" agreements requiring the submission of sexual harassment claims to mandatory binding arbitration—except: (1) "where inconsistent with federal law" or (2) as part of a collective bargaining agreement. The specific carve-out for agreements mandating arbitration "[e]xcept where inconsistent with federal law" presumably acknowledges that the Federal Arbitration Act, which embodies strong congressional intent favoring enforceability of arbitration agreements, may preempt this and any other state law purportedly prohibiting arbitration.

Nondisclosure Agreements for Sexual Harassment Claims Prohibited Without Complainant Consent (Part KK, Subpart D)

Effective July 11, 2018, the Budget Bill amends the CPLR to prohibit nondisclosure agreements—specifically, provisions prohibiting disclosure "of the underlying facts and circumstances to the claim or action"—within any written resolution of a sexual harassment claim, unless: (1) confidentiality is the complainant's preference; (2) the complainant has been given 21 days to consider the confidentiality provision, after which, if it is the complainant's preference, such preference must be memorialized in an agreement signed by all parties; and (3) the complainant is given seven days in which to revoke the agreement.

As currently drafted, this provision does not bar confidentiality clauses requiring the complainant to maintain the confidentiality of the terms of the agreement (i.e., monetary payment, etc.). Moreover, while the 21-day consideration period/seven-day revocation period is analogous to that required under the Older Workers' Benefit Protection Act (OWBPA) amendments to the Age Discrimination in Employment Act for a valid waiver of federal age discrimination claims, unlike the OWBPA, the Budget Bill's requirement that a complainant consider confidentiality provisions for 21 days appears to be nonwaivable by the complainant.

Bidders for State Contracts Must Affirm Compliance with Nonharassment Requirements (Part KK, Subpart A)

Effective January 1, 2019, companies that bid for New York State contracts must submit an affirmation with their bid stating, under penalty of perjury, that they have complied with the state's annual sexual harassment training requirement and written policy requirement. Any bid that does not include this affirmation will not be considered.

NEW YORK CITY

The Stop Sexual Harassment in NYC Act was introduced through a number of City Council bills, most notably those outlined below.

Mandatory Sexual Harassment Training (Int. 632-A)

Effective April 1, 2019, the Act requires employers with 15 or more employees to provide annual interactive workplace anti-harassment training for all employees, including supervisors/managers, and also specifically including interns.

For new employees, the training must occur "after 90 days of initial hire."

Under the Act, the term "interactive training" is defined to mean "participatory teaching whereby the trainee is engaged in a trainer-trainee interaction, use of audio-visuals, computer or online training program or other participatory forms of training as determined by the commission." Significantly, the Act specifies that such interactive training is not required to be live or facilitated by an in-person instructor.

At a minimum, the training must include the following:

  • An explanation of sexual harassment as a form of unlawful discrimination under local law;
  • A statement that sexual harassment is also a form of unlawful discrimination under state and federal law;
  • A description of what sexual harassment is, using examples;
  • Any internal complaint process available to employees through their employer to address sexual harassment claims;
  • The complaint process available through the City Commission on Human Rights, the State Division of Human Rights and the EEOC, including contact information;
  • The prohibition of retaliation and examples thereof;
  • Information concerning bystander intervention, including but not limited to any resources that explain how to engage in bystander intervention; and
  • The specific responsibilities of supervisory and managerial employees in the prevention of sexual harassment and retaliation, and measures that such employees may take to appropriately address sexual harassment complaints.

The Act further clarifies that an employee who has received sexual harassment training at one employer within the required training cycle need not receive additional sexual harassment training at another employer until the next cycle. Furthermore, an employer who is subject to training requirements in multiple jurisdictions may provide proof of compliance with the New York City law, as long as the employer's sexual harassment training is provided annually and contains the mandated training areas discussed under the law.

Comparison of State and City Harassment Training Requirements

State City
Effective Date October 9, 2018 April 1, 2019
Coverage All employers, regardless of size; all employees must be trained. Employers with 15 or more employees; all employees must be trained; "employees" includes interns.
Frequency Annually Annually
New Hires No provision New employees must be trained "after 90 days of initial hire."
Recordkeeping No provision Records of training, including employees' signed acknowledgement (which may be electronic) must be retained for three years.
Type of Training "Interactive" (not defined) "Interactive" defined as participatory teaching whereby trainee is engaged in a trainer-trainee interaction, use of audio-visuals, computer or online training program.
Substance/Content State City
Definition and Examples An explanation of sexual harassment consistent with guidance issued by NYSDOL. Must include examples of conduct that would constitute unlawful sexual harassment. A description of what sexual harassment is, using examples.
Reference to Applicable Laws Information concerning federal and state statutory provisions re: sexual harassment and remedies available under those laws. Explanation of sexual harassment as a form of unlawful discrimination under local law; statement that sexual harassment is also a form of unlawful discrimination under state and federal law.
Internal Reporting/External Forums for Complaints/Rights of Redress Training does not expressly address internal complaint process, although policy must include internal complaint form.

Information concerning employees' rights of redress and all available forums for adjudicating complaints.
Internal complaint process available to employees through their employer to address sexual harassment claims.

Complaint process available through the NYC Commission on Human Rights, the New York State Division of Human Rights and the United States Equal Employment Opportunity Commission, including contact information for the same.
Bystander Intervention No provision Information concerning bystander intervention, including but not limited to any resources that explain how to engage in bystander intervention.
Supervisor Conduct and Responsibilities Information addressing conduct by supervisors and any additional responsibilities for such supervisors. Information concerning the specific responsibilities of supervisory and managerial employees in the prevention of sexual harassment and retaliation, and measures such employees may take to appropriately address sexual harassment complaints.
Retaliation No specific provision, although written policy must address. The prohibition of retaliation under city law and examples of same.

Sexual Harassment Poster/Handout (Int. 630-A)

Effective 120 days after enactment, Int. 630-A requires all employers in New York City to post an anti-sexual harassment rights and responsibilities poster—in both English and Spanish, at minimum—which is to be created and made available by the City Commission on Human Rights.

Employers also must provide an information sheet on sexual harassment, in both English and Spanish, at a minimum (again to be created and provided by the City Commission) to each employee at the time of hire.

Expansion of Statute of Limitations for Filing Claim with City Commission (Int. 663-A)

Effective immediately upon enactment, employees will now have three years (previously was one year) to file a claim of "gender-based harassment" under the CHRL with the City Commission on Human Rights.

Sexual Harassment Protections Extended to Employers with Fewer Than Four Employees (Int. 657-A)

Also effective immediately upon enactment, the Act expands CHRL coverage of sexual harassment cases to include all city employers, including those with fewer than four employees, aligning the CHRL with the SHRL's coverage of sexual harassment claims (the SHRL was amended to extend application of sexual harassment protections to all employers effective January 19, 2016).

Several additional details regarding the Act include:

  • Int. 614-A requires the Commission to make certain information about sexual harassment available online for the public, including examples of sexual harassment, a description of the Commission's complaint process, alternative agencies with whom to file a complaint, information on retaliation, information on bystander intervention education and other available agency resources.
  • Int. 693 requires city contractors to include their employment practices, policies and procedures "relating to preventing and addressing sexual harassment" as part of an existing report required for certain city contracts.

NEXT STEPS FOR EMPLOYERS/KEY QUESTIONS AND ANSWERS

In light of the above requirements, employers with employees in New York State and New York City need to review their existing nonharassment policies and training materials, arbitration agreements, nondisclosure agreements and severance agreements, and update them accordingly.

Q: If I already have a harassment policy that meets the state and city content requirements, do I need to hand it out again?

A: Most policies likely will need at least some tweaking to comply with the specific content requirements mandated by state and city law. Assuming your policy is compliant, while the legislation does not expressly address this particular issue, best practice would be to redistribute your policy, including, for example, at the same time mandatory harassment training is conducted, and to have all employees sign an acknowledgment form documenting their receipt of the same.

Q: We just conducted harassment training a month ago. Do I need to do it again in 2018? Do I have to start a training program in 2018?

A: Probably not. Since the applicable "annual" training provision of the state law goes into effect on October 9, 2018 (the city counterpart is effective April 1, 2019), you likely have a year from that date to conduct training that is compliant. Of course, for those employers with employees in New York City, any training that you conduct by that date to be compliant with state law should also be compliant with city law.

Q: Can I simply implement the state/city's model policy and/or training program without alteration?

A: It is important to remember that the model training programs to be developed by both the state and city are minimum standards. Employers are well-advised not to blindly adopt such programs when they are issued, but rather to ensure that the training programs they utilize, while satisfying the minimum requirements, are appropriately designed to be effective for their worker populations. A one-size-fits-all approach may not work.

This is particularly the case for employers operating in multiple jurisdictions, who may choose to utilize a single policy and/or set of training materials compliant with the jurisdiction with the most encompassing legal requirements. Even in such cases, however, the policy and/or training at issue will need to address the unique nuances of the New York State and New York City requirements (including, for example, the requirement to reference the state and city agencies for adjudicating complaints and explain the complaint process for those agencies), which may necessitate the use of policy and/or training addenda to specifically address the same.

Q: Who should be trained?

A: All employees, including managers and supervisors, as well as interns.

Notably, while neither state nor city law expressly requires employers to provide harassment training to nonemployees, employers are well advised to consider doing so, especially given that the state law expands protections to nonemployees, and ensuring that training addresses the prevention and reporting of harassment of nonemployees—which necessarily requires that the nonemployees themselves are aware of the employer's policies with respect to harassment, including the applicable complaint procedures. Of particular focus should be those nonemployees who work alongside or with employees, including independent contractors and consultants, as well as temporary, contingent or leased workers employed by or engaged through a third party agency.

Q: Must the training be live?

A: The city law says no, but the state law does not specify. Until further guidance is issued, employers may want to assume that "interactive" training as referenced in the state law means live training. Yes, that is directly at odds with the city law, which expressly notes that "interactive" training is not required to be live or facilitated by an in-person instructor, which itself begs the question of what, then, is "interactive" training (the city law refers to "participatory" forms of training, to include online training programs). Presumably, the model training programs to be developed by both the state and city will provide needed clarification on what is acceptable as an "interactive" program.

Q: Do I now need to amend existing mandatory arbitration provisions in my handbook or employment agreements?

A: Best practice would be to issue, by July 11, 2018, an actual amendment for those provisions that arguably cover sexual harassment claims and have employees acknowledge, in writing, the same. That may be easier said than done when large numbers of employees are at issue. If the policy or program at issue has a carve-out for claims that legally cannot be subject to mandatory arbitration, best practice still would be to issue a written statement to employees clarifying that sexual harassment claims are excluded.

It is not clear how this Budget Bill would affect arbitration of claims in which the plaintiff is asserting both sexual harassment as well as other claims. Presumably, the defendant could seek bifurcation of a complaint, with arbitration of the nonharassment claims.

Q: What do I do now with my severance agreements that contain standard confidentiality clauses?

A: Gone are the days of using a form severance or settlement agreement template. Employers should, in advance of the July 11, 2018, deadline, review any form severance agreements with confidentiality provisions to ensure they do not run afoul of the new state requirements. Blanket confidentiality provisions that even arguably prohibit an employee or former employee from discussing the underlying facts or circumstances of a claim or allegations of sexual harassment should not be utilized, unless the complainant is afforded the 21-day consideration and seven-day revocation periods, and affirmatively indicates, in writing, acceptance of such provision after the requisite periods have expired without revocation.

Where the termination of the employment relationship, or the settlement of an employment-related dispute, does not involve sexual harassment allegations, employers may wish to affirmatively state as much in the agreement itself and/or have the employee acknowledge his or her agreement with the same to avoid any confusion or dispute down the road.

It remains to be seen what, if any, real impact this change will have on the resolution of sexual harassment allegations/claims. Where employers refuse to pay severance (or a settlement) without confidentiality of the facts underlying the allegation or claim, victims of sexual harassment who are unwilling to agree to confidentiality may face more difficulty in receiving any form of redress, as such claims typically are difficult to prove in court. On the other hand, employers understand the costs of protracted litigation and may be willing to pay now to make a claim go away, even without confidentiality.

Alternatively, employers may take a two-pronged approach to severance and/or settlement, offering greater monetary consideration in the event the employee consents to confidentiality, and a lesser amount if he or she does not. While this indeed may be the epitome of "buying silence," as long as it is as "the complainant's preference," it should not violate the law, at least as it is currently drafted.

For More Information

If you have any questions about this Alert, please contact any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.

Footnote

[1] The Budget Bill provisions overlap, in large degree, with the provisions of proposed New York State Senate Bill 7848A, which did include a specific statutory definition of "sexual harassment": "[U]nwelcome sexual advances, requests for sexual favors, or other verbal or physical conduct of a sexual nature if such conduct is made either explicitly or implicitly a term or condition of employment, or submission to or rejection of such conduct is used as the basis for employment decisions affecting an individual's employment, or such conduct has the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile or offensive work environment, even if the complaining individual is not the intended target of sexual harassment."

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.

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