This article sets out the main obligations and potential liabilities on employers arising from New York State’s recent workplace sexual harassment legislation.

By: Eric Su, Valerie Ferrier

Firm: FordHarrison

Executive Summary

In the fiscal year 2019 budget, the New York State Legislature passed several new laws aimed at preventing workplace sexual harassment, including banning mandatory arbitration and requiring anti-harassment policies and training. These new laws, a response to the larger social conversation regarding sexual harassment, pass even more potential liability on to private employers and will require substantial changes to policies and practices.

The New York City Council recently passed its own suite of measures designed to prevent sexual harassment. Employers in New York City must therefore comply with two new sets of laws regarding sexual harassment. This article focuses on the New York State provisions.

Highlights of new sexual harassment laws for employers

Public employees required to reimburse state for sexual harassment payments

Employees of the state or public entities, including elected officials, who are found to have engaged in sexual harassment are required to reimburse the state or public entity for any payment made for ‘an adjudicated award.’ The law does not apply to pre-judgement settlements. The employees' pay can be withheld or a financial judgement enforced against them if they are no longer employees.

Employers liable for sexual harassment of non-employees

Employers may be held liable under the state Human Rights Law for an employee’s sexual harassment of a non-employee, such as a ‘contractor, subcontractor, vendor, consultant or other person providing services pursuant to a contract in the workplace’ if they ‘knew or should have known’ that the non-employee was being sexually harassed ‘in the employer’s workplace’ and failed to take ‘immediate and appropriate corrective action.’ The extent of the employer’s control over the harassing employee ‘shall be considered.’ The vague language in the law leaves room for interpretation by courts, and it remains to be seen how this law will be enforced.

Mandatory arbitration for sexual harassment prohibited

Employers cannot require employees to submit to arbitration for sexual harassment claims. Any findings of fact or decision reached in claims that are subject to arbitration cannot be protected from judicial review. Any prohibited clause in a contract will be null and void. This law only applies to arbitration agreements entered into after 11 July 2018 and does not apply to collective bargaining agreements.

Use of non-disclosure agreements for sexual harassment settlements limited

Any settlement of a sexual harassment claim may not include confidentiality provisions unless:

  • all parties are provided with the non-disclosure terms or conditions;
  • the complainant is given 21 days to consider the non-disclosure terms or conditions;
  • after agreeing to and signing the non-disclosure terms or conditions, the complainant is given seven days to revoke the agreement.

This law applies to any sexual harassment settlements, including private settlements, whether entered into before or during litigation.

Required sexual harassment policy and annual training

All employers in New York State will be required to implement an anti-sexual harassment policy and to conduct annual interactive sexual harassment training for all employees. The law requires the New York State Department of Labor to develop model policies and training programmes, which employers can adopt. Employers may instead develop their own policies and programmes, as long as they meet the minimum requirements set forth in the law.

Required sexual harassment certification in government bids

Any company bidding for a state contract will be required to certify, under penalty of perjury, that it has written sexual harassment policies and provides annual sexual harassment training to its employees. For non-competitive bids or any other sales to state agencies, the agency may choose to require the same certification.

Employers’ Bottom Line

The new state laws regarding sexual harassment will require a review of and possibly updates to many employers’ policies, procedures and practices. As the laws come into effect quickly over the next few months, and in light of the vagueness of some of the requirements, employers should review their current practices and take legal advice regarding any necessary revisions.