In the last post I explained that New York had passed some pretty significant rules aimed at curbing the problem of sexual harassment in the workplace. The paragraphs that follow give a summary of five of the most significant changes included in the reform package and hopefully provide some guidance for employers looking to stay in compliance with these important rules.

Expanded Liability

In the past, employers were only responsible for claims of sexual harassment from people directly in their employ. This is no longer the case. In order to expand protections to a larger segment of the working population, and in recognition of the way that work has shifted in this 21st century economy, this reform allows employers to be held accountable for the sexual harassment of independent contractors, subcontractors, vendors, and generally anyone performing services on the employer’s behalf. If a contractor or another covered individual is harassed, the employer can be held liable if they or their agents, knew or should have known about the harassment and failed to take appropriate corrective action. This reform went into effect the day the budget was signed on April 12, 2018.

Confidentiality Agreements

Prominent news pundit Bill O’Reilly famously paid a woman $34 million dollars to settle a sexual harassment claim and, more expensively, to keep quiet about it. Often a sexual harasser, or their employer, will attempt to limit the negative publicity or personal embarrassment associated with a sexual harassment settlement by including a non-disclosure or “confidentiality” agreement. This reform limits these agreements to instances when it is in “the plaintiff’s preference.” Policy makers argue that these agreements allow for too many repeat offenders and conceal the full extent of this problem from the public. The “plaintiff’s preference” exception presents a difficult question for litigants and judges to parse. Certainly Mr. O’Reilly’s victim’s preference must have been to keep quiet in exchange for a hefty payment. Couldn’t the same be said for all plaintiffs who voluntarily enter into these agreements? The answer is yet unclear. The statute does provide the guidance that this exception will only be allowed when the court determines that the plaintiff’s choice “is not a result of intimidation, coercion, retaliation, or threats” and that it will not result in an adverse “potential impact on the public.” Plaintiffs are afforded a seven-day window after signing any such agreement to revoke their acceptance. This part of the reform applies to all settlements entered into after July 11, 2018.

Mandatory Arbitration

One controversial aspect of the reforms is the prohibition on enforcement of mandatory arbitration provisions. Arbitration clauses are generally favored by policy makers on account of their effect on judicial efficiency. Employers also like them because they are often more cost effective and they avoid some of the publicity associated with litigation. However, the Legislature felt it was more important to ensure that victims could have their day in court, so the reform says that mandatory arbitration clauses will not be enforced after July 11, 2018, even if the agreement was entered into prior to that date. Employers should revisit any agreements in which these clauses were included to reassess the level of risk they are exposed to. This reform will probably be challenged on the grounds that it is preempted by the Federal Arbitration Act. Because federal laws reign supreme in our system of federalism, this could lead to this reform being declared unenforceable, meaning that employers’ arbitration clause are still binding. But this has not happened yet – as of today, this reform is still the law in the state of New York.

Sexual Harassment Policies & Employee Training

Employers are now obligated to adopt a written sexual harassment prevention policy to be distributed to all employees. The policy must:

• prohibit sexual harassment and provide examples of prohibited conduct;
• include information about federal and state sexual harassment laws and mention that there may be applicable local laws;
• include a standard complaint form;
• include a procedure for the timely and confidential investigation of complaints including due process for all parties;
• inform employees of their rights to redress and available forums for adjudicating claims administratively and judicially, it is prudent, but not necessarily sufficient, to mention that employees can file a complaint with the Equal Employment Opportunity Commission and/or the New York Division of Human Rights (“DHR”);
• state sexual harassment is misconduct and that sanctions will be enforced against individuals engaging in sexual harassment and supervisors and/or management who allow such behavior to continue; and
• state retaliation against individuals who complain of sexual harassment or who testify or assist in any proceedings is unlawful.

Employers are also required to provide all employees with sexual harassment prevention training on an annual basis. The training must include:

• an explanation of sexual harassment;
• examples of sexual harassment;
• information concerning the federal and state laws concerning sexual harassment and remedies available to victims; and
• information concerning employees’ rights of redress and forums for complaints.

The training is required to be interactive, but the statute does not specify in what way it needs to be interactive. Employers should scrupulously document the dates employees went through this training. These portions of the reform go into effect October 9, 2018. Before employers run out and hire an HR consultant to design them a training regimen, they should know that the law mandates the DHR produce a model prevention policy and training program, the adoption of which will be sufficient for compliance with the new rules. The DHS has yet to produce these materials, but they are also required to comply by October 9, 2018.

Conclusion

If employers don’t comply with these reforms they can face serious penalties. In addition to the obvious liability concerns, state contracts will not be awarded, and may even be revoked, from entities that fail to comply. There are numerous other specific requirements for public authorities, municipalities, and government agencies that are not discussed in this post, which come with their own sets of consequences. These reforms are necessary to address a serious issue in our society and although the compliance may seem like a headache at first glance, with diligence and a little guidance, these requirements can be a very manageable part of employers’ operations.

 

Picture: www.chem.com