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James Denlea & Amber Wallace: New York state’s anti-sexual harassment laws – challenges for small businesses

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James Denlea and Amber Wallace

Tucked away in a budget bill signed by Gov. Andrew Cuomo on April 12, 2018, were significant changes for all New York employers concerning the prevention of sexual harassment in the workplace. Part of a larger nationwide response to the #MeToo movement, these new laws impose strong limitations on mandatory arbitration provisions and nondisclosure agreements, expand protections (and remedies) to nonemployees and, most significantly, mandate that New York employers implement written anti-sexual harassment policies and conduct annual “interactive” trainings.

In an effort to curtail what has been perceived as an effort to silence victims, hide the pervasiveness of harassment in the workplace and prevent other victims from speaking out against repeat harassers, New York state now prohibits the use of mandatory arbitration clauses to resolve any allegation or claim of an unlawful discriminatory practice of sexual harassment (although it is uncertain whether this provision will be preempted under federal law that favors enforcement of arbitration provisions). Additionally, New York state now prohibits nondisclosure provisions relating to any cause of action or claim of sexual harassment, unless the term is the “complainant’s preference” and expressed in writing in an agreement signed by all parties. The overall policy goal of these changes is to incentivize employers to more forcefully address sexual harassment claims rather than try to hide behind confidential arbitration proceedings and nondisclosure agreements.

New York state has also expanded anti-sexual harassment protections to “nonemployees” in the workplace, including contractors, vendors, consultants and other individuals providing services pursuant to a contract. It is now unlawful for employers to permit sexual harassment of nonemployees in its workplace, or to fail to take immediate action when it knew or should have known that a nonemployee was subjected to sexual harassment in the employer’s workplace. This new law expands an employer’s potential liability and empowers a new class of workers to speak out against harassers in the workplace.

The greatest expansion in this new set of laws is an amendment to the Human Rights Law. By Oct. 9, New York employers must have a written anti-sexual harassment policy that:

1. prohibits sexual harassment;
2. informs employees about state and federal remedies available to victims of sexual harassment;
3. includes a standard complaint form;
4. includes a procedure for prompt, confidential investigations of complaints;
5. informs employees of their rights to seek redress and available administrative and judicial forums;
6. states that sexual harassment is a form of employee misconduct and that sanctions will be enforced against individuals engaging in sexual harassment and against supervisors and managers who knowingly permit such behavior to continue; and
7. states that retaliation against individuals who complain of sexual harassment or who testify or assist in any proceeding is unlawful.

The law directs the commissioner of labor and the New York State Human Rights Division to publish a “model” sexual harassment policy for employers, although the legislation does not provide a time by which the model must be available and surprisingly, may not be published until after the Oct. 9 deadline for compliance.

Starting Oct. 9, New York employers are also required to conduct annual sexual harassment trainings that are “interactive” and include:

1. an explanation of what sexual harassment is;
2. examples of conduct that constitute unlawful sexual harassment;
3. explain federal and state laws and remedies;
4. inform employees of their rights to seek redress as well as all available administrative and judicial forums; and
5. additional responsibilities for supervisors.

The commissioner of labor and the New York State Human Rights Division are also obligated to create a model sexual harassment training program and presumably will provide guidance on what is required to be “interactive,” as that term is not defined in the New York state legislation. However, once again, the new legislation failed to set a timeframe by which this model training program would be available, leaving employers scrambling to meet the Oct. 9 deadline without the benefit of the agencies’ guidance. Employers are permitted to utilize the state-published model policy and training programs or to implement their own policy and training that exceeds these “minimum standards.”

For larger companies that have a human resource department and perhaps even in-house employment lawyers, implementation of these new laws is relatively straightforward. Companies would simply need to review their existing policies, update where appropriate to embrace nonemployees and include the mandatory language and create a revised anti-sexual harassment training regime to be performed every year. These businesses would also need to review their existing employment contracts and standard settlement agreements to ensure compliance with the new restrictions on mandatory arbitration and nondisclosure agreements. Larger companies likely are able to institute several channels by which employees can report potential sexual harassment and they likely already have an infrastructure in place for companywide trainings. Although these legal changes will still be costly, it is a manageable task.

Smaller businesses, however, do not have the same resources available to implement so many new requirements. Such companies may not have an existing written policy, nor have undertaken formal training before. Many companies rely upon seasonal or temporary workers, interns, employees who work remotely or off-site or independent contractors, making mandatory anti-harassment training a cumbersome requirement. A small business also may have only a single manager or supervisor who has limited time and resources to investigate allegations of sexual harassment (not to mention to impracticability of investigating a claim against himself or herself).

Additionally, these laws are sure to keep evolving as more states and governmental agencies try to craft a one-size-fits-all approach to stamp out sexual harassment in the workplace. Smaller offices will be held to the same requirements as larger businesses and will have to take on the difficult (if not impossible) task of monitoring New York legislation to ensure compliance with the protean anti-harassment laws, in addition to updating their written policies and training programs.

One solution for small businesses is to turn to outside law firms that specialize in compliance. These firms are experienced in employment law, can provide the necessary written policies and implement the annual training programs. They can also provide the comfort of having someone dedicated to monitoring developments in this ever-evolving area of law. An outside compliance firm can also act as an external entity for employees to report potential claims of sexual harassment, encouraging employees to speak up against sexual harassment and permitting companies to investigate such claims promptly and in compliance with their legal obligations. Significantly, an outside compliance firm lessens employee embarrassment and concerns of retaliation, which are ever present when complaints are handled “in-house,” particularly at smaller businesses.

Employers that already have anti-harassment policies and training programs should have their materials reviewed to ensure that they comply with the new requirements and meet the minimum standards mandated by New York state and local laws, as applicable.

Employers without a written policy should seek guidance from attorneys experienced in compliance to ensure that they have an anti-harassment policy and training program in place before the Oct. 9 deadline.

James Denlea is a co-founding partner of Denlea & Carton LLP in White Plains. He has 38 years of litigation and compliance experience in a wide array of concentrations, including employment matters, health care law, insurance defense and coverage litigation. He can be reached at jdenlea@denleacarton.com.

Amber T. Wallace is an experienced commercial litigator spanning a diverse collection of legal subject matters on “both sides of the aisle,” including complex financial products, employment disputes, compliance issues, civil rights cases and consumer fraud.

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