On November 21, 2019, the New York Court of Appeals held that the New York Public Health Law Section 230(11)(b) does not give individuals a private right of action against entities for filing bad-faith reports with the Office of Professional Medical Conduct (“OPMC”). The Court reasoned that: (1) medical professionals were not within the class of individuals intended to benefit from the statute, (2) the statute’s legislative purpose would not be furthered by creating a private right of action, and (3) the creation of a private of right of action would be inconsistent with the legislature’s intent.

Background

Public Health Law Section 230 governs the reporting of, and proceedings to address, claims for professional medical misconduct. See generally N.Y. Pub. Health Law § 230. Section 230(11)(b) provides that “[a]ny person, organization, institution, insurance company, osteopathic or medical society who reports or provides information to the Office of Professional Medical Conduct in good faith, and without malice shall not be subject to an action for civil damages or other relief as the result of such report.” N.Y. Pub. Health Law § 230(11)(b).

Nationwide Mutual Fire Insurance Company (“Nationwide”) received claims from Dr. Robert D. Haar, M.D., for the treatment of four patients who were injured in automobile accidents. After denying Dr. Haar’s claims, Nationwide filed complaints of insurance fraud with the OPMC. Upon concluding its investigation of Nationwide’s complaints, the OPMC decided not to impose any discipline against Dr. Haar. Subsequently, Dr. Haar sued Nationwide for a violation of Public Health Law Section 230(11)(b) based on Nationwide’s alleged bad-faith reporting and for defamation.

Nationwide removed the case to federal court. The District Court granted Nationwide’s motion to dismiss the cause of action arising under the Public Health Law, finding there was no private right of action. Upon appeal, the Court of Appeals for the Second Circuit certified to the New York Court of Appeals the question of whether Public Health Law Section 230(11)(b) gave rise to a private right of action for bad-faith reporting.

New York Court of Appeals Decision

In analyzing whether Public Health Law Section 230(11)(b) creates a private right of action, the New York Court of Appeals used a “three essential factors” test. First, the Court of Appeals found that Dr. Haar failed to establish that medical professionals were intended beneficiaries of the law. The Court of Appeals concluded that the statute’s legislative purpose was to encourage entities to report suspected medical misconduct, not protect medical professionals accused of misconduct. Second, creating new liability for reporters through a private right of action would not promote the purpose of Public Health Law Section 230(11)(b) to increase reporting. Third, the Court of Appeals reasoned that creating a private right of action would contradict the legislative purpose of Public Health Law Section 230(11)(b) because reporting entities would be increasingly exposed to liability, even when reports are made in good faith.

Takeaway for Employers:

Employers should continue to fulfill their mandatory reporting duties pursuant to New York Public Health Law and submit complaints of professional medical misconduct where appropriate. In light of the Haar decision, employers can be assured they will not be subjected to litigation for fulfilling their reporting obligations.

 

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If you have any questions regarding the New York Court of Appeals ruling in Haar v. Nationwide Mutual Fire Insurance Company, 2019 N.Y. Slip Op. 08445, please do not hesitate to contact us. We are, of course, available to assist and provide counsel as needed.

Putney, Twombly, Hall & Hirson LLP

New York State has updated its guidance concerning the new rules regarding discrimination, harassment, and retaliation claims under the New York State Human Rights Law (“NYSHRL”) (For more detail concerning the NYSHRL, see our previous client alert: https://putneylaw.com/client-news/nys-amendments-to-workplace-discrimination-laws). Specifically, the Frequently Asked Questions (“FAQs”) section of the State’s website now provides additional clarity on employers’ obligations under the expanded NYSHRL.

The revised FAQs require employers to provide employees sexual harassment training and a notice in both English and the employee’s primary language if that language is listed as one of the languages for which the State has provided templates (including Spanish, Chinese, Korean, Polish, Russian, Haitian Creole, Bengali, or Italian). The State also expanded sections that previously related only to sexual harassment claims to include discrimination claims generally.

I. Distribution of a Sexual Harassment Notice and Policy and Training Information

New York employers are required to distribute, at the time of hire, and upon each annual training, a notice containing the employer’s (1) sexual harassment prevention policy, and (2) the training materials presented as part of the sexual harassment prevention training program. The FAQs clarify that the training materials, which must be included as part of the notice, consist of “any printed materials, scripts, Q&A’s, outlines, handouts, PowerPoints slides, etc.” This notice must be delivered in writing, and includes the option of print or electronic delivery and must link to or include the sexual harassment prevention policy and training materials.

The FAQs also recommend that employers provide the notice prior to the employee’s first day of work to satisfy the “at the time of hire” notice requirement. For current employees, the notice must be provided during each annual training. Employers may supply employees with the training materials by either providing a link to the training materials in lieu of a hard copy, or attaching the training materials to the notice. The FAQs note that the use of materials relating to training that have been provided by the New York City Commission on Human Rights (“NYCCHR”) may also be used by an employer to satisfy obligations under the NYSHRL.

II. Translation Requirements for Sexual Harassment Notice, Policy, and Training Materials

Employers are required to provide the sexual harassment notice, which includes a copy of the policy and the Training Materials, in both English and in an employee’s primary language, if the primary language is Spanish, Chinese, Korean, Polish, Russian, Haitian-Creole, Bengali, or Italian. Translated materials compliant with the NYSHRL were posted by the State earlier this year. If an employee designates a primary language not included in the list above, the FAQs “strongly encourage” employers to provide a policy and training in the language spoken by the employee since they may be held liable for the conduct of all their employees.

A. Translation of Non-Disclosure Terms or Conditions in Settlement Agreements

As we informed you in our August 19, 2019, Client Alert, absent a claimant’s wish to include them, the law prohibits non-disclosure and confidentiality terms or conditions in agreements resolving discrimination, harassment, and retaliation claims, to the extent they restrict the complainant from disclosing the facts and circumstances of the underlying claims. The expanded restrictions on non-disclosure agreements — which now pertain to discrimination and retaliation claims — went into effect October 11, 2019.

The FAQs remind employers that “[a]ny such [non-disclosure] term or condition must be provided in writing to all parties in plain English, and, if applicable, the primary language of the person who complained.” This all-encompassing wording could be interpreted to require translating the relevant non-disclosure term into any language that the employee or complainant indicates is their primary language, not just one of the languages in which the State has provided model materials.

III. Confidentiality Agreement Provisions Effective January 1, 2020

The FAQs also remind employers that, effective January 1, 2020, the law voids any provision in an agreement that restricts the disclosure of “factual information related to any future claim of discrimination” 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.” Although the FAQ merely reminds employers of the state of the law, employers should take notice of the State’s telling efforts to highlight this issue.

Takeaway for Employers:

Employers should refer to New York State’s guidance contained in the aforementioned FAQs and contact us for assistance when complying with the NYSHRL, as New York State may continue to update and expand its guidance as new issues in the application of the NYSHRL emerge. As the NYSHRL affects virtually every employer, we encourage you to contact us for assistance in complying with or interpreting the NYSHRL and the State’s commentary thereon.

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If you have any questions regarding this alert, or any other issue, please do not hesitate to contact us.

Putney, Twombly, Hall & Hirson LLP

On October 13, 2019, New York City enacted Int. 136-A (the “Law”), which greatly expands the scope of the New York City Human Rights Law (“NYCHRL”). The Law grants freelancers and independent contractors the rights that are currently only afforded to employees under the NYCHRL. Mayor de Blasio, returned the bill back unsigned, which means that effective January 11, 2020, these workers will be protected, and have the ability to file charges with the New York City Commission on Human Rights, when they face harassment or discrimination based on their race, age, gender, sexual orientation, gender identity, marital status, religion or status as a victim of domestic violence.

Who Counts as an Employee?

The Law applies to any employer that employs four or more employees at any time during the 12-month period before an alleged discriminatory act. Prior to the Law’s enactment, the NYCHRL only applied to employers that employed four or more “traditional” employees. Following the Law’s enactment, independent contractors, freelancers and interns are considered employees for the purposes of the law. The Law does not include a definition of independent contractor, but more guidance is expected as the effective date draws closer.

Takeaway

The Law has expanded the definition of employee so that employers must ensure that independent contractors and freelancers are afforded all the rights guaranteed by NYCHRL. Employers are advised to determine whether they meet the four-employee threshold under the new criteria set forth in the Law. This expanded definition of employee may require employers to provide freelancers and independent contractors with the same training that their employees are mandated to undergo in accordance with New York City law. Under the Law, employers should include freelancers and independent contractors when determining whether they meet the 15-employee threshold that mandates annual sexual harassment training. As a best practice, human resource managers should be trained on the Law and advised to provide training to freelancers and independent contractors on sexual harassment. Employers should also consider providing freelance employees with handbooks, guides, and other workplace policies that are provided to other employees.

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If you have any questions regarding this alert, or any other issue, please do not hesitate to contact us.

Putney, Twombly, Hall & Hirson LLP

Throughout the summer of 2019 and into early September, the National Labor Relations Board (“the Board”) issued numerous decisions that reconfigured the standards and frameworks applicable under the National Labor Relations Act (“the Act”) in ways that may significantly impact employers. All decisions were applied retroactively, making the changes effective immediately.

Misclassification of Workers:

In Velox Express, Inc., the Board held that an employer’s misclassification of employees as independent contractors does not constitute a per se violation of the Act. 368 NLRB No. 61 (Aug. 29, 2019). The Board reasoned that the classification of workers as employees or independent contractors is a legal opinion privileged by Section 8(c) of the Act, regardless of whether it is erroneous. The Board further concluded that because the mere misclassification of employees as independent contractors is not coercive and does not prohibit employees from engaging in Section 7 activities, such misclassification is not a Section 8(a)(1) violation. The Board also found that imposing strict liability on employers for misclassifications would improperly shift the burden of proof onto employers to prove that employees were independent contracts contravening Section 10(c) of the Act, which requires the General Counsel to establish that an employer engaged in a unfair labor practice by a preponderance of the evidence. Thus, the Board held that an employer’s mere misclassification of employees as independent contractors does not violate the Act.

Bargaining Units:

In 2017, the Board returned to the community-of-interest test for determining whether a petitioned-for bargaining unit is appropriate. PCC Structurals, Inc., 365 NLRB No. 160 (2017). In Boeing Company, the Board sought to clarify the process for determining an appropriate unit under the community-of-interest test. 368 NLRB No. 67 (Sept. 9, 2019). The Board held that the community-of-interest test is satisfied by engaging in the following three-step process:

  1. Identifying “an internal community of interest” shared by the petitioned-for unit;
  2. Comparing and weighing the shared internal interests of the petitioned-for unit against the distinct interests of the employees excluded from the unit; and
  3. Considering the Board’s previous decisions on appropriate units in a particular industry.

Unilateral Action by Employers:

In MV Transportation, Inc., the Board addressed the issue of what standard should apply when determining whether a collective bargaining agreement grants an employer the right to take an action unilaterally. 368 NLRB No. 66 (Sept. 10, 2019). Overruling its previous affirmation of the “clear and unmistakable waiver” standard in Provena St. Joseph Medical Center, 350 NLRB 808 (2007), the Board adopted the less-burdensome “contract coverage” standard. The Board reasoned that the “contract coverage” standard was more appropriate because the standard will ensure that all provisions of a collective bargaining agreement are given effect, ensure that the Board stays within its authority to interpret contracts, and reduce forum shopping by aligning with the standard applied by arbitrators and courts. Under the “contract coverage” standard, an employer may make a unilateral change in a term or condition of employment if the change is covered by or within the scope of a contract provision that grants the employer the right to act unilaterally. The “contract coverage” standard does not require that the contract mention or refer to the specific action in order for an employer to act unilaterally.

Anticipatory Withdrawals:

In Johnson Controls, Inc., 368 NLRB No. 20 (July 3, 2019), the Board adopted a new standard for an employer’s withdrawal of recognition of a union upon the expiration of a collective bargaining agreement.

Previously, a union could challenge an employer’s withdrawal of recognition through an unfair labor practice charge. An employer committed an unfair labor practice in violation of Section 8(a)(5) if, even after making a lawful anticipatory withdrawal, there was evidence that the union reacquired majority status in the time between the anticipatory and actual withdrawal of recognition by the employer. As a remedy, the union’s presumptive majority status was reestablished, and an affirmative bargaining order was issued.

The Board now holds that an employer’s receipt of evidence of a union’s actual loss of majority support within 90 days prior to the expiration of a collective bargaining agreement rebuts the union’s presumptive continuing majority status when the agreement expires. To reestablish its majority status, a union must file a petition for a Board election within 45 days of the employer’s notice of an anticipatory withdrawal. For more information on the Johnson Controls decision, see our previous alert.

Employers’ Property Rights:

A. Exclusion of Contractor Employees

In Bexar County Performing Arts Center Foundation, the Board overruled its previous precedents and held that a property owner may exclude off-duty contractor employees seeking to engage in Section 7 activities on its property. 368 NLRB 46 (Aug. 23, 2019). The Board reasoned that contractor employees are not entitled to the same Section 7 access rights as the property owner’s own employees because contractor employees’ access rights are defined by their employer’s right to access the owner’s property and off-duty contractor employees are trespassers.

However, the Board held that a property owner could be compelled to permit off-duty contractor employees onto its property for Section 7 activities if (1) the employees worked regularly and exclusively on the property, and (2) the property owner cannot establish that the contractor employees have a reasonable, non-trespassory, alternative means to communicate with their target audience.

B. Exclusion of Non-Employee Union Agents

In Kroger Limited Partnership I Mid-Atlantic, the Board announced a new interpretation of the Babcock discrimination exception, overruling Sandusky Mall Co. and other similar precedents. 368 NLRB No. 64 (Sept. 6, 2019).

Under the Babcock discrimination exception, an employer cannot exclude non-employee union agents from its property while permitting other non-employees to engaged in distribution activities on its property. NLRB v. Babcock & Wilcox, Inc., 351 U.S. 105, 112 (1956). In its decision in Sandusky Mall Co., 329 NLRB 618 (1999), the Board interpreted this exception to require an employer to permit non-employee union agents to access its property for any purpose if the employer permitted other non-employees to conduct civic, charitable, and commercial activities on its property.

The Board now holds that the Babcock discrimination exception only applies when non-employee union agents seek to access the employer’s property to engage in “activities similar in nature” to those which other non-employees are permitted to conduct. Thus, under the new interpretation, an employer may exclude non-employee union agents that seek to engage in protest activities even though non-employees are permitted to access the employer’s property for other distribution activities.

Takeaway for Employers

Employers are advised to consider how these significant shifts in labor law may affect their labor relationships. Employers should also ensure that their existing practices comply with the new changes in the law.

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If you have any questions regarding this alert, or any other issue, please do not hesitate to contact us.

Putney, Twombly, Hall & Hirson LLP

On August 12, 2019, Governor Andrew Cuomo signed legislation increasing protections for victims of discrimination and harassment in the workplace. As we previously reported, the amendments bring significant changes for employers throughout New York State including imposing greater restrictions on non-disclosure agreements, banning mandatory arbitration clauses for all discrimination claims, eliminating the severe and pervasive standard, and weakening the Faragher-Ellerth defense. For further information on the amendments to the law, see our prior alert: https://putneylaw.com/client-news/ny-lawmakers-pass-legislation-amending-workplace-discrimination-laws. The legislation contains various parts that go into effect at difference times.

Effective Immediately:

    • The New York State Human Rights Law shall be liberally construed in order to maximize deterrence of discriminatory conduct.
    • Employers must provide a notice containing the employer’s sexual harassment policy to all employees at the time of hire and at every annual sexual harassment prevention training. Such notice must be in English and the primary language of the employee. The Commissioner of Labor, in conjunction with the New York State Division of Human Rights, will prepare templates in English and in other languages, based on the state population that speaks each language and other factors deemed relevant by the Commissioner of Labor. Where an employee identifies as his or her primary language a language for which a template is not available, an employer may provide an English language notice.
    • The State Attorney General’s power to prosecute cases of discrimination is expanded to cover all protected classes.

Effective October 11, 2019:

    • The “severe and pervasive” standard will be replaced with the “petty slights and trivial inconveniences” standard. The severe and pervasive standard, similar to the standard under federal law, required an employee to show that harassment was sufficiently hostile or created a work environment that a reasonable person would consider intimidating, hostile or abusive. The new standard, which will be similar to the standard under the New York City law, requires only that the harassment rise above the threshold of petty slights or trivial inconveniences. This is a much easier standard for Plaintiffs.
    • The Faragher/Ellerth defense, which permits an employer to avoid liability if it can be demonstrate that an employee did not utilize the employer’s internal complaint procedure or did not complain of harassment, will no longer be determinative as to an employer’s liability. Employee’s claiming discrimination will also no longer have to show that they were treated less favorably than a comparator.
    • Protections for contractors will increase as employers may be held liable to non-employees, such as contractors, subcontractors, vendors, consultants, or other persons providing services in the workplace or employees of contractors, subcontractors, vendors, consultants, or other persons providing services in the workplace, for unlawful discriminatory practices. Protections for domestic workers will also increase as domestic workers will be covered on the same grounds as other types of employees.
    • Mandatory arbitration clauses related to claims of discrimination will be prohibited.
    • Non-disparagement provisions in employment contracts, which prevent employees from disclosing information related to future claims of discrimination with law enforcement, enforcement agencies and private counsel, will be prohibited.
    • Non-disclosure agreements that bar the complainant from initiating, testifying, or otherwise participating in an investigation by a government agency or disclosing facts necessary to receive public benefits that the complainant would be entitled to will be prohibited, unless the non-disclosure agreement is the preference of the Plaintiff.
    • Any term or condition in a non-disclosure agreement must be provided in writing to all parties in plain English and if applicable, the primary language of the complainant.
    • Punitive damages will be available in employment discrimination actions.
    • Attorney’s fees will be awarded to the prevailing party in all employment discrimination actions.

Effective January 1, 2020:

    • Non-disclosure agreements will need to notify an employee or potential employee that he or she is not prohibited from speaking with law enforcement, the Equal Employment Opportunity Commission, the State Division of Human Rights or a similar local entity, or his or her attorney.

Effective February 8, 2020:

    • The New York State Human Rights Law will cover all employers, without regard to the number of employees employed.

Effective August 12, 2020:

    • The statute of limitations for sexual harassment claims being brought before the New York State Division of Human Rights will be extended from 1 year to 3 years.

Effective in 2022:

    • The New York State Department of Labor and New York State Division of Human Rights must evaluate and update the model sexual harassment prevention policy and guidance document every four years.

Takeaway for Employers

Employers should pay close attention to the effective dates of the various amendments detailed above. Most immediately, employers should take steps to comply with the notice requirement relating to the sexual harassment policy and training.

In light of the lower standard of proof, the weakening of the Faragher/Ellerth defense, the lack of limitation on punitive damages, and the availability of attorney’s fees to the prevailing party, employers are likely to see an influx of discrimination and harassment cases. We anticipate more cases will be filed in New York State Court to avoid the limitations under Title VII imposed in federal courts.

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If you have any questions regarding this alert, or any other issue, please do not hesitate to contact us.

Putney, Twombly, Hall & Hirson LLP

On July 25, 2019, New York Governor Andrew Cuomo Governor signed legislation to protect New Yorkers against security breaches. The Stop Hacks and Improve Electronic Data Security, or S.H.I.E.L.D. Act (the “Act”), imposes tougher obligations on businesses handling private data to provide proper notification to affected consumers in the event of a security breach. The Act takes effect on March 21, 2020.

The Act requires the implementation of a data security program, including risk assessment measures, workforce training, incident response planning and testing, and secure data destruction protocols. The Act covers all businesses and individuals — regardless of size or location — who collect private information on New York State residents.

What “Private Information” Does the Act Protect?

Under the Act, “private information” means:

Any individually identifiable information, such as a name, number, or other identifier that can be used to identify a natural person, in combination with any one or more of the following data elements:

  • social security number;
  • driver’s license number or non-driver identification card number;
  • account number, credit or debit card number, in combination with any required security code, access code, password or other information that would permit access to an individual’s financial account; account number, credit or debit card number, if circumstances exist wherein such number could be used to access an individual’s financial account without additional identifying information, security code, access code, or password; or
  • biometric information, meaning data generated by electronic measurements of an individual’s unique physical characteristics, such as a fingerprint, voice print, retina or iris image, or other unique physical representation or digital representation of biometric data which are used to authenticate or ascertain the individual’s identity; or
  • a user name or e-mail address in combination with a password or security question and answer that would permit access to an online account.

What Measures Must Employers Take to Protect “Private Information”?

The Act requires that “any person or business” that owns or licenses computerized data that includes private information of a New York State resident “shall develop, implement and maintain reasonable safeguards to protect the security, confidentiality and integrity of the private information.” To comply with the Act, businesses must implement a data security program to protect private information that includes:

  1. Reasonable Administrative Safeguards, including designation of one or more employees to coordinate the security program, identification of reasonably foreseeable external and insider risks, assessment of existing safeguards, workforce cybersecurity training, and retaining a service provider(s) contractor capable of maintaining safeguards and requiring those safeguards;
  2. Reasonable Technical Safeguards, including network risk assessments, software design, and information processing, transmission, and storage, implementation of measures to detect, prevent, and respond to system failures, and regular testing and monitoring of key controls; and
  3. Reasonable Physical Safeguards, that may include detection, prevention and response to intrusions, and protections against unauthorized access to or use of private information during or after collection, transportation, and destruction or disposal of the information.

It should be noted that businesses that are covered by, and in compliance with, the Gramm-Leach-Bliley Act, the Health Insurance Portability and Accountability Act (“HIPAA”), and/or the New York State Department of Financial Services (“NYSDFS”) cybersecurity regulations (23 NYCRR 500) are deemed to be in compliance with the Act.

Penalties for Noncompliance with the Act

The Act does not authorize a private right of action. Therefore, class action litigation is not available. However, the attorney general may bring an action to enjoin violations of the Act and obtain civil penalties. For data breach notification violations that are not reckless or knowing, the court may award damages for actual costs or losses incurred by a person entitled to notice, including consequential financial losses. For knowing and reckless violations, the court may impose penalties of the greater of $5,000 dollars or up to $20 per instance up to $250,000. For reasonable safeguard requirement violations, the court may impose penalties of not more than $5,000 per violation.

Takeaway for Employers

Employers businesses handling private data should use this time to make sure their data protection practices and safeguards comply with the Act. As the Act affects New York employer, regardless of size and location, we encourage you to contact us for assistance in complying therewith.

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If you have any questions regarding this alert, or any other issue, please do not hesitate to contact us.

Putney, Twombly, Hall & Hirson LLP

On August 9, 2019, the National Labor Relations Board (the “Board”) released its proposed regulations, which, if implemented, would substantially change the Board’s current rules governing union elections. The proposed regulations address three existing Board policies: “blocking charges,” “voluntary bars,” and the process by which unions in the construction industry may establish majority support.

The Board’s existing “blocking charge” policy allows unions to block an election merely by filing a charge alleging unlawful conduct by the employer that would affect employee votes. Under the proposed rule, the election would go forward when charges are filed but the ballots would not be counted until the charge is resolved.

The Board’s current voluntary bar standard prevents employees from filing a decertification petition for a “reasonable period” after a union is voluntarily recognized by an employer. Under the proposed rules, this time period is substantially decreased and employees would be able to petition to decertify a voluntarily-recognized union within 45 days of its certification.

Finally, unions and businesses in the construction industry are permitted to negotiate agreements to govern employees without holding a union election vote (so-called” “pre-hire agreements”). Unlike other agreements, however, these agreements do not bar union elections from occurring over the span of the next three years. Under the current rules, these agreements may be converted into contracts with a three-year election bar based solely on language within the collective bargaining agreement. The proposed rules would require unions to have “extrinsic evidence” of their majority support before a conversion is recognized.

Takeaway for Employers

The Board’s proposed regulations are not yet law, and are open to public comment. However, if implemented, they would represent a considerable shift towards granting employees and employers the ability to challenge the legitimacy of unions as employee representatives.

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We are, of course, available to assist with any questions regarding these proposals and we will keep you updated as the rules move through the public comment period.

Putney, Twombly, Hall & Hirson LLP

On August 9, 2019, Governor Cuomo signed Senate Bill S4037, which amended the New York State Human Rights law to include protections for an individual’s right to “wear any attire, clothing, or facial hair in accordance with the requirements of his or her religion.”

Under the new law, Employers may not refuse to hire or promote individuals or take other discriminatory action against an individual because of his or her religious attire, clothing, or facial hair. Employers must make a bona fide reasonable effort to accommodate an employee’s or a prospective employee’s sincerely held religious observances or practices. An employer who does not reasonably accommodate a person’s religious practices must demonstrate undue hardship on the conduct of the employer’s business.

In explaining the need for this amendment, the bill provides an example where an MTA employee, who was a member of the Sikh religion, was ordered to remove his turban and wear an MTA hat. When the employee objected because his turban was religious attire, he was told he must affix an MTA logo to his turban, which would not have been religiously proper. The amendment aims to ensure that expressions of religious duties do not result in employees being discriminated against in their place of work. The amendment takes effect on the 60th day after it becomes law.

Takeaway for Employers

Employers should review their dress code and appearance policies to ensure that the policies do not violate the Human Rights Law. Employers should also keep in mind that they must engage in a bona fide effort to reasonably accommodate employee’s or prospective employee’s religious practices.

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If you have any questions regarding the new changes in the law, please do not hesitate to contact us.

Putney, Twombly, Hall & Hirson LLP

The New York State Assembly and Senate recently passed a bill (S2844B/A486B) that, if signed into law by Governor Cuomo, would allow current and former employees to obtain a lien against an employer’s real or personal property based merely on the assertion of a wage claim. The proposed legislation encompasses wage claims under the New York Labor Law (“NYLL”) and the Fair Labor Standards Act (“FLSA”), including claims for minimum wage, spread of hours, overtime, unlawful deductions and improper tip and meal credits, along with claims for unpaid compensation pursuant to an employment contract. The bill defines employer as any person that is an “employer” under the NYLL and FLSA. As a result, an employee lien’s can be imposed not only against the corporate entity, but personally against individuals, including managers, executives, supervisors, owners, shareholders, human resources professionals and any other person who has control over employees’ working conditions. Specifically, the bill amends the limited liability company and business corporation laws, to allow employees to hold the ten members with the largest ownership interests in a company and the ten largest shareholders of non-publicly traded corporations personally liable for any wage theft.

The bill further provides that the lien can be for the value of the employee’s wage claim, inclusive of liquidated damages, and can remain on the property for the duration of the lawsuit. However, the lien is limited to the employee’s individual claims and not applicable to putative class claims. Moreover, the lien cannot be placed on an employer’s bank accounts or goods. According to the bill, the lien must be filed within three years following the end of the employment giving rise to the wage claim. It is unclear whether the lien could be utilized for claims that are already in litigation. Once the lien is filed, the employer can try to remove the lien by either obtaining a bond or, if applicable, prove the employee willfully exaggerated the lien.

Additionally, the bill contains a provision that allows employees to examine a business’ books and records to obtain the shareholders’ or members’ names, addresses, and ownership value in the company.

Takeaway for Employers

Although the Governor has not yet signed this bill, employers should be aware of the serious consequences the bill will have on employers operating in New York if signed into law. Employers should use this time to ensure they are in full compliance with all applicable wage and hour laws, including conducting an internal audit of their wage and hour practices, to avoid employees filing wage claims, since a mere allegation of unpaid wages could result in a lien being filed that could disrupt the employer’s finances or, in certain cases, put the employer out of business.

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If you have any questions regarding this alert, please do not hesitate to contact us.

Putney, Twombly, Hall & Hirson LLP

Assembly Bill No. 1094 (the “Law”), banning employers from inquiring about the salary histories of job applicants, will go into effect on January 1, 2020.

What Employers Need to Know

Employers may only verify an applicant’s salary history and consider it in determining salary, benefits and other compensation if the applicant voluntarily provides the information, without prompting or coercion from the employer. Employers may also request a written authorization to confirm salary history after an offer of employment that includes an explanation of the compensation package offered to the applicant; and offer compensation information set for a job by collective bargaining agreements.

Employers may not screen a job applicant based on salary history, including prior wages, salaries, or benefits or require an applicant’s history satisfy any minimum or maximum criteria.

Exceptions

The Law does not apply to applications for internal transfers or promotions and employers may use prior knowledge of salary histories of former and present employees. The Law does not apply to any actions by an employer pursuant to any federal law or regulation that requires disclosure or verification of salary history for employment purposes or to determine an employee’s compensation. The Law also does not apply to employer inquiries about an applicant’s prior experience with incentive and compensation plans so long as the employer does not require the applicant to report on the amount of earnings based on the plans or publicly available information on salary history. However, the employer may not retain or consider the publicly available information when determining the compensation package for the applicant.

Where an employer receives information as a result of a background check, the employer should specify that salary information not be disclosed. If information is disclosed, the employer shall not retain the information or consider it in determining compensation of the applicant.

New Jersey Law Against Discrimination

The Law amends the NJ Law Against Discrimination by making it a violation for employers to screen a job applicant based on his or her salary history, including wages, salaries or benefits; or require an applicant’s salary history satisfy minimum or maximum criteria. The remedies of punitive damages and attorneys’ fees under the NJ Law Against Discrimination do not apply to an employer’s unlawful inquiry into an applicant’s salary history.

Penalties

The New Jersey Department of Labor and Workforce Development has enforcement authority under the Law. Any employer found in violation of this Law will be subject to a civil penalty up to $1,000 for the first violation, $5,000 for the second violation, and $10,000 for every subsequent violation.

Takeaway for Employers

Employers should ensure that questions on employment applications asking about salary history
are deleted and ensure that background check companies do not obtain or, if obtained, do not share an
applicant’s salary history information. Furthermore, employers should train recruiters and interviewers
that they may not ask an applicant for salary history information prior to making an offer. Finally,
employers should develop and implement methods to delete or otherwise exclude salary information that
cannot be considered.

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If you have any questions regarding salary history inquiries, please do not hesitate to contact us.

Putney, Twombly, Hall & Hirson LLP

On July 12, 2019, New York Governor Andrew Cuomo signed into law a bill prohibiting race discrimination based on natural hair or hairstyles. The measure, which took effect immediately, amends the New York State Human Rights Law and the Education Law by prohibiting discrimination based on “traits historically associated with race, including but not limited to, hair texture and protective hairstyles.” The measure defines “Protective hairstyles” to include “such hairstyles as braids, locks, and twists.”

The state-wide changes in the law follow New York City’s similar ban earlier this year, as we reported in our previous alert on February 21, 2019, in which the New York City Commission on Human Rights issued legal enforcement guidance on hair-based race discrimination.

Takeaway for Employers

New York covered employers should ensure their existing grooming and appearance policies comply with the new changes in the law.

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If you have any questions regarding the new changes in the law, please do not hesitate to contact us.

Putney, Twombly, Hall & Hirson LLP

On July 2, 2019, the State of New Jersey passed Assembly Bill 20 (the Compassionate Use of Medical Cannabis Act (“CUMCA”)), which extended employment protections to authorized users of medical cannabis. The CUMCA applies effective immediately and prohibits employers from taking adverse employment actions against current or prospective employees based on an individual’s status as a qualifying user of medical cannabis.

Adverse Employment Action

Under the CUMCA, an adverse employment action occurs when an employer refuses to hire an applicant, discharges an employee, forces an employee to retire, or otherwise discriminates against an individual in compensation or in any terms, conditions, or privileges of their employment.

Drug Testing Policies

The CUMCA requires that employers, who drug test employees and applicants, offer those individuals the opportunity to respond to testing positive for cannabis. Employers must provide written notice offering an individual who tests positive the right either to provide a legitimate medical explanation for a positive test result or to request a retest of the sample.

The positively tested individual has three business days after receiving the notice to

  • provide an explanation that may include an authorization to use medical cannabis issued by a health care practitioner;
  • proof of registration with the state’s Cannabis Regulator Commission, or both;
  • alternatively, an individual may request a retest of the original sample at his or her own expense.

Additional Protection

The CUMCA’s protections also extend to health care practitioners who engage in conduct authorized by the law. A health care facility may not take adverse employment action against a health care practitioner or terminate a professional affiliation with a health care practitioner for engaging in conduct permitted by CUMCA, which includes

  • authorizing patients for the medical use of cannabis
  • issuing written instructions to patients about cannabis use, or
  • consulting with a patient about the use of medical cannabis to treat the patient’s qualifying medical condition.

The CUMCA does allow employers to take adverse action against healthcare practitioners and medical cannabis users if their affiliations with such individuals would cause the employer to lose federal money or benefits.

Takeaway for Employers

New Jersey employers should train their human resources staff and supervisors on the CUMCA and should review internal policies and protocols to ensure compliance with the law. Employers should create a procedure to deliver swift responses to positive drug-test results, which includes providing written notice that complies with the law.

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We are, of course, available to assist with any questions regarding this new law and with the drafting of such notices and policies.

Putney, Twombly, Hall & Hirson LLP

On July 3, 2019, National Labor Relations Board (“NLRB” or “Board”) issued a 3-1 decision finding that Johnson Controls, Inc.’s anticipatory withdrawal of recognition to a United Auto Workers affiliate (“Union”) was lawfulThe decision modified the Board’s existing legal framework for an employer to cease bargaining prior to the expiration of a collective bargaining agreement (“CBA”). The Board also announced that employers questioning the majority status of an incumbent union may force a Board supervised election. In determining that Johnson Controls, Inc. lawfully withdrew recognition of the Union, the Board overturned portions of th. e its ruling in Levitz Furniture Company of the Pacific, Inc., 333 N.L.R.B. 717 (2001), reasoning that elections best protect the free choice of employees and resolve disputes of employees’ representational preferences.

Background

On April 21, 2015, while in negotiations with the Union for a successor CBA, Johnson Controls, Inc. was presented with a union disaffection petition (“petition”). The petition was signed by 83 of the 160 bargaining-unit employees and expressed the employees’ desire to no longer be represented by the Union. That same day, Johnson Controls, Inc. notified the Union of the petition and that it would no longer recognize the Union as the employees’ bargaining representative upon the expiration of the existing contract on May 7, 2015. The Union responded on April 22, 2015 that it had not received the petition or any other verified evidence it no longer had majority support from bargaining-unit employees, and demanded Johnson Controls, Inc. continue bargaining for a new agreement. Johnson Controls, Inc. did not provide the petition or continue bargaining.

Shortly thereafter, the Union solicited authorization cards from bargaining-unit employees and collected 69 signed authorization cards from April 27, 2015 to May 7, 2015. Among the 69 signed authorization cards, six were signed by employees who had also signed the petition, so called “dual signers”. The Union stated it had credible evidence that it retained majority support and suggested a meeting with Johnson Controls, Inc. to compare evidence. Johnson Controls, Inc. declined to meet and on May 8, 2015, withdrew recognition from the Union.

NLRB Decision

Under prior precedent, an employer could give notice that it would withdraw recognition from the union when an existing contract expires and could also suspend bargaining or refuse to bargain for a successor contract. To exercise this “anticipatory” withdrawal of recognition, the employer needed to receive evidence, within a reasonable period of time before the existing contract expired, that the union representing the employees no longer had majority support. The law resolved disputes over a union’s post contract majority status by utilizing the “last in time” rule under which the union’s evidence would control the outcome if it postdated the employer’s evidence.

In Johnson Controls, Inc., the Board modified the “anticipatory” withdrawal of recognition in two ways: (1) the “reasonable time” before the contract expires in which the anticipatory withdrawal can be made is now defined as no more than 90 days prior to contract expiration; and (2) if an incumbent union wants to re-establish its majority status, it must file an election petition within 45 days after an employer effects an anticipatory withdrawal. 368 N.L.R.B. No. 20 (2019). This 45-day period remains in effect regardless of whether the contract expires within that period of time. Furthermore, pursuant to existing representation law, a rival union may still file its own petition during the 30-day open period regardless of whether the incumbent union files an election petition.

If no post-anticipatory withdrawal election petition is timely filed, the employer may rely on the disaffection evidence it possesses to lawfully withdraw recognition at contract expiration unless there are other grounds which render the withdrawal unlawful. If a post-anticipatory withdrawal election petition is timely filed, the employer may still withdraw recognition at contract expiration and may withhold recognition unless the union establishes its majority status through an election. The existing safe harbor rule remains in effect—an employer may choose to file an RM Petition (“Representation Petition”) to demonstrate it has evidence to demonstrate reasonable good-faith uncertainty that the union no longer has majority status. No employer that refrains from withdrawing recognition will be in violation of Section 8(a)(2) and no union that accepts such recognition will be in violation of Section 8(b)(1)(A). The one exception to the safe harbor rule is that if a rival union has filed an election petition or otherwise intervenes in the incumbent union’s case, the employer must withdraw recognition from the incumbent to ensure no unfair advantage to the incumbent.

Takeaway for Employers

New York City appears poised to follow other states such as California and New Jersey that have recently passed laws allowing striking workers to claim unemployment benefits shortly after declaring a strike. Employers are advised to consider how this significant shift in the cost of striking may affect their labor negotiations. At minimum, unions will be empowered to continue strikes in hopes of strengthening their bargaining positions.

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We are of course available to assist and provide counsel as these situations emerge.

Putney, Twombly, Hall & Hirson LLP

On June 20, 2019, New York State Assembly voted in favor of New York Assembly Bill 6592, which decreases the length of time individuals involved in a labor strike must wait before collecting unemployment benefits. Under the law, striking employees will be eligible to receive unemployment benefits after just one week. Under the current law, employees are not eligible to receive unemployment benefits until they have been off the job for seven consecutive weeks.

The New York State Senate previously voted in favor of the bill on May 1, 2019. If signed by Governor Cuomo, the bill represents a substantial shift in the balance of power between workers and management. Compensating striking union members for lost wages is a high cost for unions, and that burden may now be shifted onto employers.

Takeaway for Employers

New York City appears poised to follow other states such as California and New Jersey that have recently passed laws allowing striking workers to claim unemployment benefits shortly after declaring a strike. Employers are advised to consider how this significant shift in the cost of striking may affect their labor negotiations. At minimum, unions will be empowered to continue strikes in hopes of strengthening their bargaining positions.

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We are of course available to assist and provide counsel as these situations emerge.
Putney, Twombly, Hall & Hirson LLP

New York lawmakers unanimously passed legislation to amend the New York State Human Rights Law and increase both the protections for protected categories, as well as additional protections for victims of workplace related sexual harassment. The legislation would bring significant changes for employers throughout New York State and make it more difficult for employers to defend against claims of discrimination and harassment.

The bill passed on June 19, 2019 and is currently awaiting signature by Governor Cuomo, who has publicly expressed his support for the legislation and is expected to sign it into law in the coming days.

The legislation provides for significant changes to the Human Rights Law, including:

  • Expanding the New York State Human Rights Law to cover all employers. The current law excludes employers with fewer than four employees. This provision of the bill takes effect 180 days after the bill becomes law.
  • Extending the statute of limitations for sexual harassment claims being brought before the State Division of Human Rights from 1 year to 3 years. This provision of the bill takes effect 1 year after the bill becomes law.
  • Eliminating the “severe or pervasive” standard required to state a claim for harassment. Presently, claims of harassment can be dismissed if the complained of inappropriate conduct is not sufficiently hostile. Under the new legislation, harassment will be considered unlawful when it subjects an individual to inferior terms, conditions, or privileges of employment because of his or her membership in a protected class. The legislation only requires that harassment rise above the threshold of petty slights or trivial inconveniences in order to be deemed unlawful. An employer may, as an affirmative defense, argue that the harassing conduct does not rise above the level of what a reasonable victim of discrimination with the same protected characteristics would consider to be petty slights or trivial inconveniences. This provision of the bill takes effect 60 days after the bill becomes law.
  • Significantly weakening the Faragher-Ellerth defense, which allows employers to prevail in sexual harassment cases if the aggrieved employee unreasonably failed to take advantage of the employer’s preventive or corrective measures. The legislation protects employees who do not make complaints of harassment out of fear of retaliation. While the bill does not eliminate the Faragher-Ellerth defense, it is no longer determinative as to an employer’s liability. This provision of the bill takes effect 60 days after the bill becomes law.
  • Extending punitive damages in employment discrimination actions brought before the State Division of Human Rights, without limitation on the amount. It also provides for punitive damages and attorney’s fees to the prevailing party in all employment discrimination actions. This provision of the bill takes effect 60 days after the bill becomes law.
  • Extending protections for non-employees in the workplace and extending liability to employers for all forms of unlawful discriminatory conduct in the workplace. This provision of the bill takes effect 60 days after the bill becomes law.
  • Liberal construction of the Human Rights Law, regardless of how federal laws are construed. This provision of the bill takes effect immediately after the bill becomes law.
  • Prohibiting mandatory arbitration clauses related to discrimination. This provision of the bill takes effect 60 days after the bill becomes law.
  • Prohibiting non-disparagement provisions in employment contracts that prevent employees from disclosing information related to future claims of discrimination with law enforcement, enforcement agencies and private counsel. This provision of the bill takes effect 60 days after the bill becomes law.
  • Prohibiting non-disclosure agreements that bar the complainant from initiating, testifying, or otherwise participating in an investigation by a government agency or disclosing facts necessary to receive public benefits that the complainant would be entitled to. This provision of the bill takes effect 60 days after the bill becomes law.
  • Requiring that any term or condition in a non-disclosure agreement be provided in writing to all parties in plain English and if applicable, the primary language of the complainant. This provision of the bill takes effect 60 days after the bill becomes law.
  • Expanding the prohibition on non-disclosure agreements, unless it is the preference of Plaintiff, to all discrimination cases not just sexual harassment cases. This provision of the bill takes effect 60 days after the bill becomes law.
  • Voiding any agreement between an employer and employee or potential employee, entered into after January 1, 2020, that prevents disclosure of facts related to any future claim of discrimination unless the provision notifies the employee or potential employee that he or she is not prohibited from speaking with law enforcement, the Equal Employment Opportunity Commission, the State Division of Human Rights or a similar local entity, or his or her attorney.
  • Expanding the State Attorney General’s power to prosecute cases of discrimination based on all protected classes. This provision of the bill takes effect 180 days after the bill becomes law.
  • Requiring employers to provide a notice containing the employer’s sexual harassment policy to all employees at the time of hire and at every annual sexual harassment prevention training. Such notice must be in English and the primary language of the employee. This provision of the bill takes effect immediately after the bill becomes law.
  • Requiring the Commissioner of Labor to prepare templates of model sexual harassment prevention policies in languages other than English. This provision of the bill takes effect immediately after the bill becomes law.
  • Beginning in 2020, and every four years thereafter, the Department of Labor and the State Division of Human Rights must evaluate the impact of the model sexual harassment prevention policies and update them as necessary.

Takeaway for Employers

When signed into law, this legislation will have a significant impact on New York employers. Not only does it lower the bar for employee’s claiming harassment to “petty slights” or “trivial inconveniences”, it also increases the employer’s liability and essentially eliminates an affirmative defense. The legislation also impacts an employer’s ability to resolve claims of harassment by imposing greater restrictions on non-disclosures agreements and banning mandatory arbitration clauses for all discrimination claims. Employers will have to revisit their sexual harassment prevention policies and training materials to ensure compliance with the new legislation in the event it is signed into law by Governor Cuomo as anticipated.

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If you have any questions regarding this legislation, please do not hesitate to contact us.
Putney, Twombly, Hall & Hirson LLP