New York State Adopts Additional Laws to Combat Discrimination and Harassment

The New York State Legislature passed several bills at the end of its 2019 session which, yet again, will impact New York employers. Some of the new legislation further amends laws that were implemented last year, which required employers to review and update their policies and practices. Notably, employers currently doing business in New York City may find that they are already in compliance with some of the new laws, as certain measures in the new legislation are similar to employee-friendly laws previously enacted in New York City.

The provisions in the new bills affecting private employers in New York are summarized below. The provisions have varying effective dates, and employers should note the date each law goes into effect after enactment (the date the Governor signs the bill).

New York State Human Rights Law Will Apply to All Employers Regardless of Size

A8421/S6577 (as amended by S6594/A8424), amends the New York State Human Rights Law (NYSHRL), by expanding the definition of “employer” to include all private employers, regardless of the number of employees. Prior to this amendment, except as to sexual harassment, the NYSHRL covered employers with four or more employees.

This law will go into effect 180 days after enactment.

New Standard for Proving Discriminatory Harassment 

One of the most significant provisions in the new legislation is the modification of the legal standard for harassment claims under the NYSHRL. Currently, to be actionable under the NYSHRL, harassment must be sufficiently “severe or pervasive” to alter the conditions of the victim’s employment. A8421/S6577 eliminates the “severe or pervasive” standard and instead provides that “harassment,” including retaliatory harassment, under the NYSHRL is an unlawful discriminatory practice when an employer subjects “an individual to inferior terms, conditions or privileges of employment because of the individual’s membership in one or more [] protected categories.” 

New York City eliminated the “severe or pervasive” standard for harassment claims under the New York City Human Rights Law (NYCHRL) in 2009. Under the NYCHRL, a plaintiff bringing a harassment claim must prove that he or she has been “treated less well” than other employees because of the individual’s protected status. Williams v. City of New York, 61 A.D.3d 62 (1st Dept. 2009). It is unclear how the courts will interpret the “inferior terms” standard but, notably, the New York State law specifically provides that employees need not “demonstrate the existence of an individual to whom the employee’s treatment must be compared.” 

Further tracking the NYCHRL, the NYS law makes available an affirmative defense to liability if the employer can show that the alleged “harassing conduct 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.”   

This law will go into effect 60 days after enactment and will apply only to claims accrued on or after that effective date.

Additional Requirements for Enforcement of Non-Disclosure Provisions In Relation to Agreements Resolving Any Claim of Discrimination   

As we previously reported, in 2018, New York State amended the General Obligations Law and the Civil Practice Laws and Rules (CPLR) to prohibit employers from including nondisclosure agreements (NDAs) in any settlement, agreement or other resolution of a claim involving sexual harassment, unless the complainant expresses a preference for confidentiality and such preference was memorialized in writing. A8421/S6577 expands the prohibition to apply to all claims or causes of action of discrimination. Further, the confidentiality preference in the NDAs must be provided “in writing” to all parties “in plain English, and if applicable, the primary language of the complainant.” 

The new legislation also states that such confidentiality provisions shall be void if they prohibit or restrict a complainant from “(i) initiating, testifying, assisting, complying with a subpoena, or participating in any manner with an investigation conducted by the appropriate local, state, or federal agency; or (ii) filing or disclosing any facts necessary to receive unemployment insurance, Medicaid, or other public benefits to which the complainant is entitled.” 

Additionally, under A8421/S6577, any contract or agreement between an employer and employee entered into on or after January 1, 2020 that prevents the disclosure of “factual information related to any future claim of discrimination” is void and unenforceable unless the agreement “notifies the employee or potential employee that it does not prohibit him or her from speaking with law enforcement, the equal employment opportunity commission, the state division of human rights, a local commission on human rights, or an attorney retained by the employee or potential employee.”

This law will go into effect 60 days after enactment.

Elimination of the Faragher-Ellerth Defense 

Following New York City, A8421/S6577 eliminates an affirmative defense, called the Faragher-Ellerth defense, which employers have relied on in cases brought under New York State law involving supervisor harassment. That defense has been available under federal law and the NYSHRL in cases where no tangible adverse employment action was taken against the complainant and where the employer can show  (i) the employer exercised reasonable care to prevent and correct harassment in the workplace, and (ii) the complainant unreasonably failed to take advantage of the preventive or corrective opportunities that the employer provided or to avoid harm otherwise. The new law eliminates this affirmative defense for NYSHRL claims; under its provisions, if a complainant does not make a complaint about harassment to the employer, that fact will not be determinative of whether the employer is liable under the NYS law.

This law will go into effect 60 days after enactment and will apply only to claims accrued on or after that effective date. 

Non-Employee Service Providers Protected From All Discrimination 

Last year, New York State made it an unlawful discriminatory practice for an employer to permit sexual harassment of non-employee service providers (contractors, subcontractors, vendors, consultants, and anyone else providing services) in its workplace. A8421/S6577 amends this law to protect non-employees from all unlawful discrimination, not just sexual harassment.

This law will go into effect 60 days after enactment and will apply only to claims accrued on or after that effective date.

Recovery of Punitive Damages and Attorneys’ Fees

Under A8421/S6577, plaintiffs and complainants who prevail on claims of employment discrimination against private employers under the NYSHRL in court or before the NYS Division of Human Rights (NYSDHR) may potentially recover punitive damages. In addition, if the respondent has been found liable for having committed an unlawful discriminatory practice, an award of reasonable attorney’s fees may be awarded to the prevailing plaintiff or complainant in the discretion of the court or the Commissioner of the Division of Human Rights. This marks a significant change in New York State law, which did not authorize punitive damages for employment discrimination and only provided for attorney’s fees for employment discrimination cases on the basis of sex.

The New York State Court of Appeals recently ruled in Chauca v. Abraham, 30 N.Y.3d 325 (2017), that punitive damages under the NYCHRL are determined by application of the common-law standard: whether the wrongdoer has engaged in discrimination with “willful or wanton negligence, or recklessness, or where there is a ‘conscious disregard of the rights of others or conduct so reckless as to amount to such disregard.’” It remains to be seen whether the punitive damages under the NYSHRL will be assessed under the same standard.

This law will go into effect 60 days after enactment and will apply only to claims accrued on or after that effective date.

NYSHRL Must Be Liberally Construed  

Further tracking the NYCHRL, A8421/S6577 states that the NYSHRL must be construed liberally for the accomplishment of the remedial purposes of the law and that exceptions to and exemptions from the laws “shall be construed narrowly in order to maximize deterrence of discriminatory conduct.” 

This law will go into effect immediately after enactment and will apply only to claims accrued on or after that effective date.

Prohibition of Pre-Dispute Mandatory Arbitration Agreements for All Discrimination Claims 

Currently, CPLR Section 7515 prohibits employers from requiring mandatory arbitration of sexual harassment claims. A8421/S6577 amends Section 7515 to apply to all claims of discrimination. Note, however, that the express limitation within Section 7515 — “[e]xcept where inconsistent with federal law” — remains unchanged. As we previously indicated, this provision raises serious questions regarding whether it has any practical application, given the strong preference for arbitration demonstrated in the Federal Arbitration Act and consistently restated in numerous decisions of the United States Supreme Court and lower courts. Indeed, as we recently reported, Southern District of New York Judge Denise Cote in a June 26, 2019, decision enforced the parties’ pre-dispute arbitration agreement with regard to, among other claims, plaintiff’s hostile work environment cause of action, ruling that “the FAA sets forth a strong presumption that arbitration agreements are enforceable and this presumption is not displaced by § 7515.”   

This law will go into effect 60 days after enactment.

Additional Requirements in Distributing Anti-Sexual Harassment Policies and Training

As we previously reported, less than a year ago, New York State required all employers to distribute to all employees a written sexual harassment prevention policy and provide annual, interactive sexual harassment prevention training to all employees. In addition to these requirements, under A8421/S6577, employers must now provide all employees, at the time of hiring and at every annual sexual harassment prevention training provided, “a notice containing such employer’s sexual harassment prevention policy and the information presented at such employer’s sexual harassment prevention training program” (emphasis added). This notice must be provided in writing in English and in the language identified by each employee as their primary language, provided that the State provides its model policy and training in such language.

This law will go into effect immediately after enactment.

Statute of Limitations for Sexual Harassment Claims Extended

Under A8421/S6577, complainants will have three years to file a complaint of sexual harassment under the NYSHRL with the NYSDHR, which is the same statute of limitations for employees to file claims of sexual harassment in court. The new legislation does not affect other discrimination and harassment claims filed with the NYSDHR, which continue to be subject to a one-year statute of limitations. This change in the law is consistent with a recent amendment to the NYCHRL, which extended the time to file a complaint of sexual harassment under the City law with the NYC Commission on Human Rights from one to three years.   

This law will go into effect one year after enactment.

NYS Adopts a Salary History Inquiry Ban

On July 10, 2019, Governor Andrew Cuomo signed S6549/A5308b, which enacts a state-wide salary history inquiry ban. New York State joins other jurisdictions within the state (NYC and Westchester and Suffolk counties) that previously enacted laws prohibiting employers from inquiring about salary history during the process of considering an individual for a job.  

Under S6549/A5308b, employers must not:

• Rely on an applicant’s wage or salary history in determining whether to offer employment or in determining the wage or salary for such individual.
  
  
• Orally or in writing seek, request, or require an applicant or current employee’s wage or salary history as a condition to be interviewed, as a condition of continuing to be considered for an offer of employment, or as a condition of employment or promotion.
  
  
• Orally or in writing seek, request, or require an applicant or current employee’s wage or salary history from a current or former employer, current or former employee, or agent of the applicant or current employee’s current or former employer.
  
  
• Refuse to interview, hire, promote, otherwise employ, or otherwise retaliate in any manner against an applicant or current employee (i) based on the individual’s prior wage or salary history; (ii) based on the individual’s refusal to provide wage or salary history information; or (iii) based on the filing of a complaint with the Division of Human Rights alleging a violation of this law.

Like the City law, the new legislation does not prohibit an applicant or current employee from voluntarily, and without prompting, disclosing or verifying their wage or salary history. If at the time an employer provides the applicant or current employee with an offer with compensation the individual provides their prior wage or salary history to negotiate, the employer may confirm such wage or salary history.

However, there are several notable differences between the City’s law and the state legislation. Under the state legislation, the law applies not only to applicants, but also current employees. Further, unlike the City law, the state legislation does not specifically authorize prospective employers to engage in discussion with applicants about their expectations with respect to compensation and benefits, including any unvested equity or deferred compensation that an applicant would forfeit by leaving his or her current employer.

This law will go into effect on January 6, 2020 (i.e., 180 days after enactment).

Prohibition of Race Discrimination Based on Natural Hair or Hairstyles

On July 12, 2019, Governor Cuomo signed S6209a/A7797a. The new legislation amends the NYS Executive Law to expand the term “race” to include “traits historically associated with race, including but not limited to hair texture and protective hairstyles.” The term “protective hairstyles” includes, without limitation, such hairstyles as braids, locks, and twists. Employers may recall our recent alert that discussed the NYC Commission on Human Rights’ announcement and issuance of legal enforcement guidance that, among other things, interpreted the NYCHRL’s prohibition of race discrimination to ban discrimination on race-related hair and hairstyles.

This law went into effect on July 12, 2019 (i.e., immediately after enactment).

Expansion of Equal Pay

On July 10, 2019, Governor Cuomo signed S5248-B/A8093a. The new legislation amends the equal pay provisions of the New York Labor Law (NYLL), which currently prohibits gender-based pay inequity, to apply to members of all protected classes under the NYSHRL. Under the new legislation, individuals who believe they are underpaid due to their protected status will be able to bring a claim for equal pay directly under the NYLL. The NYLL has a six-year statute of limitations, which is double the three-year statute of limitations applicable to claims under the NYSHRL, and also provides for treble damages in the event of a violation of the law.

Additionally, the new law lowers the burden of proof for an individual claiming an equal pay violation by requiring employers to ensure equal pay for “substantially similar work,” as opposed to “equal” work.

However, the law permits a differential in rate of pay if the employer can show that such decision is based on (i) a seniority system, (ii) a merit system, (iii) a system measuring earnings by quantity or quality of production, or (iv) a bona fide factor other than the protected status, such as education, training or experience, which is job-related and consistent with business necessity.

This law will go into effect on October 8, 2019 (i.e., 90 days after enactment).

Implications for Employers

The new bills effect major changes to New York’s discrimination and harassment laws. As discussed above, many provisions of the new bills are similar to laws already enacted in New York City; thus, employers currently operating in New York City may already be in compliance with certain of the new New York State laws. Because Governor Cuomo has signed, or is expected to sign, all of these bills, employers in New York State should be aware of these changes and consider taking the following next steps:

• Ensure that harassment policies eliminate references to the “severe or pervasive” standard, which will no longer apply to claims of harassment under the NYSHRL and NYCHRL.
  
  
• Review discrimination, harassment, and retaliation policies to include a statement that the policies extend protections to non-employees.
  
  
• Prepare template settlement and separation agreements that will comply with the anticipated requirements in the new law concerning NDAs applicable to resolution of discrimination claims.
  
  
• Make plans to include the carve-out language that will be required for confidentiality provisions in agreements entered into on or after January 1, 2020.
  
  
• Prepare the required “notice” containing the employer’s sexual harassment policy and the information provided by the sexual harassment prevention training, and distribute such notice at the time of hiring and at every annual sexual harassment prevention training. If an employee identifies a primary language other than English, and the State makes available a model sexual harassment prevention policy and training template in such language, the employer must provide a translated version of its policy to the employee in his or her primary language.
  
  
• Review interview and hiring practices to ensure compliance with the salary history ban. Employers are encouraged to review our previous alert regarding the NYC salary history ban, which includes suggested “next steps.”
  
  
• Review grooming practices and policies to ensure that they do not run afoul of the State’s new law prohibiting race discrimination based on an employee’s hair texture or hairstyle.
  
  
• Carefully analyze and maintain documentation noting the reasons for any pay differentials for substantially similar work.

We will monitor developments pertaining to these new laws and provide updated information when the State issues rules or other guidance. Because the laws go into effect on varying dates, employers should monitor the date that the Governor signs these bills and calendar the effective date of each law.

For questions or concerns regarding this Alert, please contact a member of Kramer Levin’s Employment Law Department.