United States: New York Employers: Prepare For Changes To Harassment, Discrimination And Equal Rights Laws

New York Governor Andrew M. Cuomo on August 12 signed into law new legislation expanding employee protections against discrimination and harassment. Among the key provisions are a lower standard for proving harassment, mandatory awards of attorneys' fees to claimants or plaintiffs who prevail, and restricted use of non-disclosure agreements. This legislation comes on the heels of several recent changes to New York's employment laws, which are also summarized in this alert.

New York Champions Sweeping Changes to Harassment and Discrimination Laws

Expanded Coverage. Effective February 8, 2020, the New York State Human Rights Law (NYSHRL) will apply to all New York employers, irrespective of the size of their workforce, and it will protect non-employee service providers, such as independent contractors, consultants and vendors, from all forms of unlawful discrimination and harassment based on any protected characteristic under the NYSHRL.

Lower Standard for Proving Harassment. Effective October 11, 2019, accusers will no longer need to prove that the alleged harassment was "severe and pervasive" (the federal standard of proof) to prevail. This follows New York City's elimination of the "severe or pervasive" standard under the New York City Human Rights Law (NYCHRL) in 2009. Now, unlawful harassment means any activity that "subjects an individual to inferior terms, conditions or privileges of employment because of the individual's membership" in a protected class. In addition, victims need not provide comparator evidence to prove a harassment claim, which on its face appears to be an even lower evidentiary standard than under the NYCHRL, which requires plaintiffs to show they were treated "less well" than other employees outside of their protected class.

Faragher/Ellerth Defense Eliminated. Effective October 11, 2019, the Faragher/Ellerth affirmative defense (a well-established federal harassment defense), which generally allows employers to avoid liability when the alleged victim failed to take advantage of the employer's complaint reporting procedures, can no longer be relied upon when defending NYSHRL harassment claims. However, employers may still plead as an affirmative defense that the harassment complained of "does not rise above the level of what a reasonable victim of discrimination with the same protected characteristic would consider petty slights or trivial inconveniences," an affirmative defense also available under the NYCHRL.

Statute of Limitations for Sexual Harassment Claims Extended. Effective August 12, 2020, the statute of limitations to file a sexual harassment claim with the New York State Division of Human Rights is extended from one to three years. It will remain one year for all other harassment and discrimination claims.

Recovery of Punitive Damages and Attorneys' Fees. Effective October 11, 2019, New York Courts and the New York Division of Human Rights must award attorneys' fees to claimants or plaintiffs who prevail on claims for any form of employment discrimination or harassment actionable under the NYSHRL against private employers (currently, awarding attorneys' fees is discretionary). Prevailing respondents and defendants, however, may recover attorneys' fees only if they establish that the claims were frivolous. Punitive damages against employers are also now expressly recoverable under the NYSHRL.

Mandatory Arbitration of All Discrimination Claims Prohibited. Last year, New York enacted a law that banned mandatory arbitration of sexual harassment claims. Effective October 11, 2019, mandatory arbitration of all discrimination claims is prohibited. Open questions remain, however, as to whether the Federal Arbitration Act (FAA) preempts these contrary state laws, given the FAA's strong preference for arbitration and recent federal court decisions affirming the widespread preemptory scope of the FAA.

Restricted Use of Non-Disclosure Provisions in Separation and Settlement Agreements. Currently, New York employers are prohibited from including nondisclosure provisions in separation and settlement agreements that prevent the complainant from disclosing the "underlying facts and circumstances" of sexual harassment claims, unless it is the complainant's preference and a specific process is followed. Effective October 11, 2019, these restrictions will apply to all discrimination claims. Additionally, any agreement between an employer and employee entered into on or after January 1, 2020, that restricts the disclosure of "factual information related to any future claim of discrimination" is void unless the agreement "notifies the employee or potential employee that it does not prohibit him or her from speaking with law enforcement, the EEOC, the state division of human rights, a local commission on human rights, or an attorney retained by the employee or potential employee."

Notice Provisions and Training. Effective immediately, the new law requires employers to provide employees, at the time of hire, with notice of their sexual harassment policy and the information presented at the employer's sexual harassment prevention training program. Note that New York employers must train their workforce on sexual harassment by October 9, 2019. Details on the scope of the training can be found here.

Discrimination Based on Natural Hair or Hairstyles Is Now Expressly Prohibited Under New York Law. Effective as of July 12, 2019, the definition of "race" under NYSHRL was expanded to include "traits historically associated with race, including but not limited to hair texture and protective hairstyles," which include "braids, locks, and twists." Accordingly, employers are prohibited from discriminating against employees based on these hair characteristics. New York joins California in enacting legislation specifically addressing hair discrimination.

Equal Pay Protections Expanded to All Protected Classes. Effective October 8, 2019, the New York State Labor Law will prohibit pay differentials based on any protected characteristic under the NYSHRL. Currently, only pay differentials based on gender are covered. The new law requires equal pay for "substantially similar work." However, pay differentials that are based on a seniority system, a merit system, a system measuring earnings by quantity or quality of production, or a bona fide factor other than the protected status, such as education, training or experience, which is job-related and consistent with business necessity, are lawful.

New York State Adopts State-Wide Salary History Inquiry Ban. Following New York City's lead, which enacted a salary history inquiry ban law in 2017, effective January 6, 2020, all New York State employers are prohibited from inquiring about a job applicant's (or current employee's) salary or wage history when interviewing, hiring, promoting or making employment decisions.

Recommendations. In light of these changes, employers should, with the assistance of legal counsel: (1) carefully review, and revise as necessary, their employee handbooks, personnel policies, template employment forms (i.e., separation agreements, offer letters, etc.) and related documents to ensure compliance; (2) train all New York employees prior to the October 9, 2019, deadline; (3) review pay differentials among similarly situated employees for discrimination risk; (4) prepare to distribute their sexual harassment policies (and information presented at their sexual harassment training programs) to all employees upon hire; (5) educate their human resources professionals on any required adjustments to practices and procedures.

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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