On January 6, 2020, New York Labor Law Section 194-a (the “Salary History Law”) went into effect. The new section prohibits an employer from, either orally or in writing, personally or through an agent, asking any information concerning a job applicant’s salary history information. This includes previous compensation and benefits. The Salary History Law prohibits employers from considering an applicant’s salary history information at any point during the hiring process.

To Whom Does the Law Apply?

The Salary History Law covers all job applicants and current employees. The law applies to all public and private employers operating in New York State. Under the law, an applicant is any individual who has taken an affirmative step to seek employment with an employer and who is not currently employed with that employer, its parent company or a subsidiary. This includes applicants for part-time, seasonal and temporary positions but does not include independent contractors or freelance workers unless they are employed through an employment agency. Any employer who interviews a candidate for a position that is primarily based in New York State falls within the scope of the law.

Employers are also prohibited from requesting prior salary history information from current employees as a condition of being interviewed or considered for a promotion. Employers may consider the salary and benefits information of a current employee seeking a promotion if that information is already in the employer’s possession.

Differences Between the Salary History Law and Local Salary Laws

New York City and Suffolk County have salary inquiry laws that are currently in effect. While similar to the Salary History Law, the New York City and Suffolk County laws only apply to applicants, and do not cover current employees. New York City also recently enacted Int. 136-A, which extends the New York City Human Rights Law, including the city’s salary inquiry law, to independent contractors and freelancers. New York City employers are advised that despite the state’s Salary History Law’s exclusion of freelancers and contract workers, they cannot inquire about these applicants’ salary histories. majority opinion.

Takeaway:

The new Salary History Law continues a trend of prohibiting employers from using an applicant’s salary history in the hiring process. The new law extends this prohibition to promotions and internal transfers of current employees. Employers are advised to train interviewers, human resources personnel and individuals involved in the hiring process to avoid making any inquiries about an applicant’s salary history, directly or indirectly, at any point in the hiring process.

Employers should also review current policies and application materials to ensure compliance with the law. Application materials should clearly state that the employer will not seek or request an applicant’s salary history in connection with the hiring process. Employers who utilize employment agencies should also ensure that their clients abide by the Salary History Law.

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We are available to advise and assist in drafting documents and policies that are
consistent with the new law.

Putney, Twombly, Hall & Hirson LLP

On December 23, 2019, the National Labor Relations Board (the “Board”) issued its decision in United Parcel Service, Inc., 369 NLRB No. 1 (2019), setting forth a new standard to determine whether the Board will defer to arbitral awards in resolving unfair labor practice cases that allege that an employee’s discharge or discipline violated Sections 8(a)(1) and 8(a)(3) of the National Labor Relations Act (the “NLRA”). Overruling Babcock & Wilcox Construction Co., Inc., 361 NLRB 1127 (2014), the Board held that it will defer to arbitral awards in discipline and discharge cases as long as the arbitral proceedings were conducted fairly, the parties agreed to engage in binding arbitration, the arbitrator considered the unfair labor practice issue, and the arbitrator’s decision is “not clearly repugnant” to the policies set forth by the NLRA.

Background

United Parcel Service, Inc. (the “Employer”) is a party to national and local collective bargaining agreements with the International Brotherhood of Teamsters, which represents package car drivers. On October 28, 2014, the Employer terminated a package car driver after he violated the Employer’s package delivery procedures. The driver grieved his discharge and filed a timely unfair labor practice charge with the Board. Pursuant to the grievance and arbitration procedures established in the parties’ collective bargaining agreements, a joint arbitral panel considered and denied the driver’s grievance, finalizing his termination. The issue before the Board was whether it should defer to the arbitral decision in deciding the driver’s unfair labor practice charge.

In Babcock, 361 NLRB 1127 (2014), the Board overruled decades of precedent, which favored deferring to arbitration awards. Instead, the Board decided to restrict post-arbitral deferral and held that such deferral was inappropriate unless (1) the arbitrator was explicitly authorized to decide the unfair labor practice issue, (2) the arbitrator was presented with and considered the statutory issue, and (3) the Board’s precedential decisions reasonably permitted the arbitration award. Under the Babcock standard, the Board should not defer to the arbitral award in resolving the package car driver’s unfair labor practice charge against the Employer regarding his termination.

Decision and Order

The Board, reinstating the holding in Olin Corp., 268 NLRB 573 (1984), held that post-arbitral deferral is appropriate in unfair labor practice cases alleging that an employee’s discharge or discipline violated Sections 8(a)(1) and 8(a)(3) of the NLRA when the following five factors are met: (1) the arbitration proceedings were fair and regular, (2) the parties agreed to be bound by the arbitral award, (3) the contractual issue subject to arbitration and the unfair labor practice issue are factually similar, (4) the arbitrator was presented with facts relevant to resolving the unfair labor practice issue, and (5) the arbitrator’s decision is not clearly repugnant to the polices or purposes of the NLRA.

The Board reasoned that this standard was more commensurate with the national policy, set by Congress, which strongly favors the resolution of labor disputes through voluntary arbitration and prevents the Board from unnecessarily dissecting arbitrators’ decisions. The Board further reasoned that the Babcock standard was flawed because it was based on the mistaken factual presumption that there is an excessive risk of arbitrators not adequately considering the statutory issues implicated in discharge and discipline cases, and an employee’s contractual and statutory rights are entirely independent in these cases. To the contrary, the Board found that there was no evidence that arbitrators do not consider the statutory implications of their decisions and found that “there are no real statutory issues to litigate apart from contractual issues.” The Board also criticized the Babcock standard because it impermissibly interfered with the parties’ freedom to negotiate the terms of their collective bargaining agreements, encouraged duplicative litigation of a single incident of discharge or discipline, and replaced the Board’s repugnancy standard for deferring to arbitral decisions with a reasonableness standard that gives unjustifiably little deference to an arbitrator’s factual findings. Moreover, the Board overruled Babcock and held that the burden is on the party arguing against deferral to demonstrate any defects in the arbitral proceedings or award.

Applying its holding retroactively to the case, the Board found that deferral to the joint panel’s arbitral decision was appropriate and dismissed the driver’s unfair labor practice charge. Chairman John F. Ring was joined by Members Marvin Kaplan and William Emanuel in the majority opinion.

Takeaway for Employers:

Employers should keep in mind that the Board is now more likely to defer to arbitral awards resulting from the grievance and arbitration procedures in their collective bargaining agreements to resolve unfair labor practice charges regarding employees’ discharge or discipline. Employers are encouraged, therefore, to make sure that arbitration proceedings for these cases are properly conducted in order to avoid duplicative litigation.

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If you have any questions regarding the Board’s ruling in United Parcel Service, Inc., 369 NLRB No. 1 (2019), please do not hesitate to contact us.

Putney, Twombly, Hall & Hirson LLP

On December 17, 2019, the National Labor Relations Board (the “Board”) issued its decision in Apogee Retail LLC d/b/a Unique Thrift Store, 368 NLRB No. 144 (2019), determining the issue of whether an employer’s investigative confidentiality rules are lawful. Overruling Banner Health System, 362 NLRB No. 137 (2015), and applying the analytical framework for facially neutral workplace rules established in Boeing Co., 365 NLRB No. 154 (2017), the Board held that investigative confidentiality rules are generally lawful as long as they are limited to the period of active investigation.

Background

At all material times, thrift store operator Apogee Retail (the “Employer”) maintained two written rules, one requiring employees to “maintain confidentiality” regarding workplace investigations into “illegal or unethical behavior” and the other prohibiting “unauthorized discussion” of investigations or interviews “with other team members.” The Employer provided a list of justifications for the rules, which roughly break down into three categories: (1) to prevent theft and respond quickly to misconduct through prompt investigations; (2) to protect employee privacy and ensure that there will be no retaliation by managers or other employees; and (3) to ensure the integrity of an investigation—including providing reliable and consistent protocols—for the benefit of both employers and employees. The issue before the Board was whether making employees “maintain confidentiality” and barring “unauthorized discussions” about workplace investigations violated employees’ organizing rights under the National Labor Relations Act (the “Act”).

Since 2015, the Board has followed the case-by-case approach to investigative confidentiality rules set forth in Banner Health System, which held that such policies generally infringe upon employees’ rights. However, in its 2017 Boeing decision, the Board directed agency officials to analyze other workplace rules utilizing the following three categories:

  • Category 1 rules are those that are presumptively legal because they do not affect employees’ rights or because employers’ reasons for maintaining them outweigh any infringement.
  • Category 2 rules more strongly affect employees’ rights but may be legal on a case-by-case basis if employers can justify them.
  • Category 3 rules are always illegal because employers cannot explain away their adverse effects on workers.

Decision and Order

The Board overruled Banner Health System, reasoning that it: (1) failed to consider Supreme Court and Board precedent recognizing the Board’s duty to balance an employer’s legitimate business justifications and employees’ Section 7 rights; (2) failed to consider the importance of confidentiality assurances to both employers and employees during an ongoing investigation; and (3) is inconsistent with other federal guidance.

Instead, applying the Boeing test for facially neutral workplace rules, the Board held that investigative confidentiality rules are lawful and fall within Boeing Category 1 (types of rules that are lawful to maintain) if, by their terms, they apply only for the duration of any investigation. With regard to the Employer’s rules at issue in the case, the Board found that they were not limited on their face to the duration of any investigation. The Board reasoned that employees might reasonably interpret a rule that is silent with regard to the duration of the confidentiality not to be limited to the duration of the investigation. As such, the Board found that the Employer’s investigative confidentiality rules fell within Boeing Category 2.

The Board remanded the case for further proceedings as to: (1) whether the Employer has one or more legitimate justifications for requiring confidentiality even after an investigation is over, and (2) if so, whether those justifications outweigh the effect of requiring post-investigation confidentiality on employees’ exercise of their rights under Section 7 of the Act. The Board noted that most justifications for requiring investigative confidentiality apply while an investigation is ongoing.

Takeaway for Employers:

Employers should review current workplace rules to ensure that any investigative confidentiality rules are limited in scope to open investigations. Employers should also ensure that any such workplace rules are facially neutral and not applied in a discriminatory manner.

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If you have any questions regarding the Board’s decision in Apogee Retail LLC, 368 NLRB No. 144 (2019), please do not hesitate to contact us. We are, of course, available to assist and provide counsel as needed.

Putney, Twombly, Hall & Hirson LLP

On December 13, 2019, the National Labor Relations Board (“NLRB”) finalized a rule that substantially modifies the union election regulations that went into effect on April 14, 2015. The April 2015 regulations had been regarded by many as encouraging so-called “ambush” elections that disadvantaged employers. The new regulations, which go into effect on April 16, 2020, provide for a lengthier and more substantive process by incorporating key changes, which we have summarized in the following chart.

Current Regulations New Regulations
Pre-Election Hearing The pre-election hearing is scheduled to begin only eight (8) calendar days from the Notice of Hearing. Under the new regulations, the pre-election hearing will be scheduled to occur 14 business days from the Notice of Hearing.
Notice of Petition Employers are required to serve the Notice of Petition within two (2) business days after filing the Notice of Hearing. Under the new regulations, employers must post and distribute a Notice of Petition for Election within five (5) business days of service of the Notice of Hearing.
Date of Election NLRB regional directors are directed to schedule elections for the earliest practicable date. Under the new rules, absent a waiver by the parties, the election will not be scheduled before the 20th business day after the date of the Direction of Election.
Voter List After an election is directed, employers are required to generate a voter eligibility list containing the name and contact information of eligible voters.   Employers are required to furnish the list within two (2) business days. Employers will now have five (5) business days to produce the voter list to the union and to the NLRB.
Statement of Position Employers are required to file the Statement of Position within seven (7) calendar days after the service of the Notice of Hearing. Under the new regulations, Employers will now have eight (8) business days after service of the Notice of Hearing to file the Statement of Position. Regional directors will now also have discretion to extend that time period for good cause.

 

The new regulations also require that unions file a Statement of Position in response to the employer’s Statement of Position within three (3) business days after receiving the employer’s statement.

Disputed Issues Issues pertaining to voter eligibility and a unit’s scope are litigated after an election. Under the new regulations, issues pertaining to voter eligibility and a unit’s scope will now be litigated prior to the election, as they had been prior to the 2014 changes. Parties may stipulate to allow disputed employees to vote subject to challenge and resolution after the election.
Post-Hearing Briefs Parties are only allowed to make oral arguments about disputed issues during the pre-election hearing. Parties now have the right to file a post-hearing brief, in which parties explain their positions about disputed issues, following a pre-election hearing. Post-hearing briefs are due within five (5) business days following the conclusion of a pre-election hearing. Parties may also request an extension for up to 10 additional business days for good cause.
Certification of Election Regional directors are required to certify the results of an election that a union won even if the employer was appealing issues that would cause the results to be dismissed. Under the new rules, regional directors will not certify the results of an election while an appeal is pending or while the deadline to file an appeal has not expired.

Takeaway:

The new regulations resolve many of the issues that employers raised with the previous regulations concerning the timeline to submit documents or provide notice. However, the regulations are not a wholesale repeal of the previous regulations and employers should be aware of their duties and the various deadlines involved in elections.

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We are of course available to advise and assist throughout the election process.

Putney, Twombly, Hall & Hirson LLP

On December 17, 2019, the National Labor Relations Board (the “Board”) issued its decision in Caesar’s Entertainment d/b/a/ Rio All-Suites Hotel and Casino, 368 NLRB No. 143 (2019), holding that employers do not violate the National Labor Relations Act (“NLRA”) by restricting the non-business use of its information-technology and electronic mail (“email”) resources. Overruling Purple Communications, 361 NLRB 1050 (2014), the Board reasoned that: (1) employers have the right to control their email systems and technological property, (2) oral solicitation and in-person literature distribution provide adequate means for employees to communicate, and (3) prohibiting non-work use of employer-owned email systems does not unreasonably impede employees’ Section 7 rights.

Background

Rio All-Suites Hotel and Casino (the “Employer”) is owned and operated by Caesar’s Entertainment, Inc. in Las Vegas. The Employer maintains an employee handbook, which was furnished to its approximately 3,000 employees. The employee handbook contains work rules governing employees’ usage of the Employer’s computers and technology systems (“computer usage rules”). The computer usage rules prohibit employees from using the Employer’s computer resources, including work email accounts, to “[s]end chain letter or other forms of non-business information,” “[s]olicit for personal gain or advancement of personal views,” and “visit inappropriate (non-business) websites.” The issue before the Board was whether it was unlawful for the Employer to prohibit employees from using its email and other information-technology resources to engage in activities and communications protected by Section 7 of the NLRA.

In Register Guard, 351 NLRB 1110 (2007), the Board held that employees have no right under the NLRA to use an employer’s equipment, including email systems, for Section 7 purposes. However, in a divided decision in Purple Communications, 361 NLRB 1050 (2014), the Board overruled Register Guard and held that employees have a statutory right to use employer-owned technology for non-work, Section 7 purposes. Thus, under the prevailing Purple Communications standard, the Employer’s computer usage rules would have violated Section 8(a)(1).

Decision and Order

The Board held that employees do not have a right under the NLRA to use employer-owned email for non-business purposes in the typical workplace. The Board reasoned that an employer’s email system and technology resources are its property, which it has the right to control. The Board noted that this well-established principle was not disputed by the majority in Purple Communications. Relying on the Supreme Court’s decision in Republic Aviation Corp. v. NLRB, 324 U.S.793 (1945), the Board further reasoned that, in the typical workplace, oral solicitation and paper literature distribution were sufficient means for employees to communicate and there was no need to abridge an employer’s property rights since employees were not unreasonably prevented from exercising their Section 7 rights. The Board noted that these points were also not disputed by the majority in Purple Communications. However, the Board recognized a narrow exception to its holding, allowing employees to use employer-owned email for Section 7 communications where it is “the only reasonable means for employees to communicate with one another.”

Applying its holding retroactively to the case, the Board found that the Employer did not violate Section 8(a)(1) of the NLRA because its computer usage rules were generally lawful and there was no evidence that the rules had been applied discriminatorily. Chairman John F. Ring was joined by Members Marvin Kaplan and William Emanuel in the majority opinion. Member Lauren McFerran dissented.

Takeaway for Employers:

Employers may now implement and maintain workplace rules prohibiting employees from using their email systems for non-business purposes, including union-related communications. Employers should ensure that these workplace rules are facially neutral and are not applied in a discriminatory manner.

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If you have any questions regarding the Board’s ruling in Caesar’s Entertainment, 368 NLRB No. 143 (2019), please do not hesitate to contact us. We are, of course, available to assist and provide counsel as needed.

Putney, Twombly, Hall & Hirson LLP

On December 16, 2019, the National Labor Relations Board (the “Board”) issued its decision in Valley Hospital Medical Center, Inc. d/b/a Valley Hospital Medical Center, 368 NLRB No. 139 (2019), examining the issue of whether an employer’s statutory obligation to check off union dues terminates upon expiration of the parties’ collective bargaining agreement (“CBA”). Overruling Lincoln Lutheran of Racine, 362 NLRB No. 188 (2015), and restoring precedent set by Bethlehem Steel, 136 NLRB No. 135 (1962), the Board held that dues-checkoff provisions are mandatory bargaining subjects created exclusively by CBAs and enforceable only for the duration of the CBAs establishing them.

Background

Approximately 13 months after the parties’ CBA expired, Valley Hospital Medical Center (the “Employer”) stopped deducting and remitting employees’ dues to the union. The Employer provided five days’ notice but did not provide the union an opportunity to bargain over the cessation of dues collection. Up to that point, the parties were still operating under the expired CBA’s terms. The union filed an unfair labor practice charge. The issue before the Board was whether it was unlawful for the Employer to cease checking off and remitting employees’ union dues after its CBA with the union expired.

The Employer’s unilateral action would have been lawful under nearly 60-year old NLRB precedent. In Bethlehem Steel, the NLRB held that an employer’s statutory obligation to check off union dues ends when the CBA establishing the checkoff provision expires. However, in 2015, in the case of Lincoln Lutheran of Racine, the Board overruled Bethlehem Steel, holding that an employer’s statutory obligation to check off union dues continues to be enforceable even after expiration of the CBA establishing the checkoff arrangement.

Decision and Order

The Board held that a dues-checkoff provision properly belongs to the limited category of mandatory bargaining subjects that are exclusively created by a CBA and enforceable, through Section 8(a)(5) of the Act, only for the duration of the contractual obligations created by the parties. The Board reasoned that there is no independent statutory obligation to check off and remit dues after expiration of a CBA containing a checkoff provision just as there is no such statutory obligation at the outset of collective bargaining. The Board’s new holding applies even in the absence of a union security provision in the same contract.

Applying their holding retroactively to the case, the Board found that the Employer had no obligation under the Act to continue checking off dues after the CBA expired. Chairman John F. Ring was joined by Members Marvin Kaplan and William Emanuel in the majority opinion. Member Lauren McFerran dissented.

Takeaway for Employers:

An employer’s obligation to check off union dues ends when the CBA establishing the checkoff provision expires. This applies even when contractual checkoff provisions appear in conjunction with union security clauses. The Board’s holding applies retroactively to all pending cases.

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If you have any questions regarding the Board’s decision in Valley Hospital Medical Center, 368 NLRB No. 139 (2019), please do not hesitate to contact us.
Putney, Twombly, Hall & Hirson LLP

On December 11, 2019, the United States Department of Labor (“DOL”) issued its final rule on “Regular Rates under the Fair Labor Standards Act,” which modifies the agency’s rules on calculating the regular rate of pay as it relates to the inclusion or exclusion of various employer perks and benefits.

The new rule encourages employers to offer perks and benefits to its employees by clarifying any uncertainty regarding the agency’s rules, especially since the agency has not made a “significant update” to its regular rate of pay rules in 50 years. The DOL hopes these updates will encourage employers to offer additional and innovative benefits to its workers without the fear of costly litigation for unpaid overtime.

Calculating Regular Rate of Pay

Under the Fair Labor Standards Act (“FLSA”), non-exempt employees are entitled to one-and-one half times their regular rate of pay for all hours worked over 40 hours in a workweek. The regular rate of pay includes “all remuneration for employment,” except payments specifically excluded by the FLSA, divided by the total hours worked.

The new rule excludes the following benefits from an employee’s regular rate of pay:

  • Wellness programs, onsite specialist treatment, gym access, and fitness classes;
  • Parking benefits, such as parking spaces; however, commuter subsidies, such as public transportation benefits, are not excludable.
  • Emergency childcare services, but not routine childcare services;
  • Payments for unused paid leave, including paid sick leave or paid time off;
  • Office coffee and snacks to employees;
  • Payments to certain penalties required under state and local scheduling laws;
  • Reimbursements for cellphone plans, credentialing exam fees, organization membership dues, and travel, even if the travel is not incurred solely for the employer’s benefit;
  • Contributions to benefit plans for accident, unemployment, legal services, or other events that could cause future financial hardship or expense;
  • Certain tuition benefits;
  • Certain sign-on bonuses and certain longevity bonuses;
  • Discretionary bonuses; and
  • Call-back pay, unless the call-back shifts are anticipated or prearranged.

With respect to tuition benefits, these benefits can be excluded from an employee’s regular rate of pay as long as the tuition benefit program is available to employees regardless of the hours worked or services rendered, are optional, and are directed at particular educational and training opportunities outside the employer’s workplace.

The DOL also clarified that sign-on bonuses are excludable from the regular rate of pay if they are not subject to a clawback provision, or if they have a clawback provision, the clawback provision is not pursuant to a collective bargaining agreement or city ordinance. Likewise, longevity bonuses are excludable as long as the bonus is not directly dependent on hours worked, production or efficiency. However, a longevity bonus based on tenure or length of service is excludable.

Moreover, the DOL provides comprehensive guidance on discretionary bonuses that are excludable from an employee’s regular rate of pay. Specifically, the DOL noted that a bonus is discretionary and therefore excludable, regardless of its designation, if the fact that the bonus is to be paid and the amount determined are at the sole discretion of the employer at or near the end of the period to which the bonus corresponds and the bonus is not paid pursuant to any prior contract, agreement or promise.

The new rule becomes effective on January 15, 2020.

Takeaway for Employers

Employers should review the benefits and perks provided to non-exempt employees and determine whether the rule excludes these benefits and perks from the employee’s regular rate of pay. Additionally, employers should exercise caution in categorizing certain benefits as excludable solely based on its title or label. As discussed above, whether certain benefits, such as discretionary bonuses, should be included in the regular rate requires a fact-specific determination.

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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 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