The New York State Senate and Assembly on June 19 passed Bill 8421 (the Bill), which lowers the standard for an employee to prevail when raising harassment claims, limits a potential employer defense against harassment claims, increases protections against discrimination available to nonemployees, and places further constraints on the availability of employers and employees to agree to nondisclosure agreements in the settlement of discrimination claims. Notably, most of these changes apply to harassment on all protected bases, not just sex, and some apply to all claims of discrimination, not just harassment. Employers should review their antiharassment and antidiscrimination policies—among other important steps—to ensure compliance with the new law.

The new Bill amends the New York State Human Rights Law (NYSHRL), General Obligations Law and Civil Practice Law and Rule (CPLR) in several important respects and generally brings the NYSHRL much more in line with the standards and requirements of the New York City Human Rights Law (NYCHRL).

Governor Andrew Cuomo supports the Bill and already indicated he will sign it into law shortly. Some of these changes mirror those previously proposed in the 2019 state budget, which are summarized in our previous LawFlash, but were removed from the final enacted version of the budget.

Eliminated Employer Threshold

The NYSHRL will now apply to all private employers irrespective of number of employees, and state and some local government employers as well. Formerly, most provisions in the NYSHRL applied only to private employers of four or more employees, although this threshold was previously removed for sexual harassment claims. This amendment to the NYSHRL shall take effect 180 days after the Bill is signed by Governor Cuomo.

Lowered Harassment Standard

The Bill makes it easier for employees to establish illegal harassment under the NYSHRL.

  • Removal of the severe and pervasive standard. The definition of unlawful harassment under the NYSHRL will expand to cover any time an individual in a protected category or who has filed a complaint regarding discrimination is subjected to “inferior terms, conditions or privileges of employment because of the individual’s membership in one or more” protected categories. Notably, the Bill specifically states that such an action constitutes harassment “regardless of whether such harassment would be considered severe or pervasive under precedent applied to harassment claims.” The Bill does, however, provide an affirmative defense when employers can demonstrate that “the harassing conduct does not rise above the level of what a reasonable victim of discrimination with the same protected characteristic would consider petty slights or trivial inconveniences.”
  • No comparators required. The amended NYSHRL further states that “[n]othing in this section shall imply that an employee must demonstrate the existence of an individual to whom the employee’s treatment must be compared.” In other words, an employee does not need to show he or she was treated worse than a similarly situated comparator.
  • Removal of the Faragher-Ellerth defense. The amended NYSHRL removes a significant employer defense in that “[t]he fact that [an individual] did not make a complaint about the harassment to [an employer] shall not be determinative of whether [the employer] shall be liable” for harassment as defined above. This defense, frequently referred to as the “Faragher-Ellerth” defense, was previously rejected from application to sexual harassment claims under the NYCHRL, but the new Bill expands this rejection to all claims of harassment under the NYSHRL.

Effectively, the New York State harassment claim standards will mirror the existing ones in New York City. Notably, these amendments take effect 60 days after the Bill is signed.

Application of NYSHRL to Nonemployees

The Bill also amends the NYSHRL provisions regarding employer liability for sexual harassment of nonemployees to apply to any unlawful discriminatory practice. Thus, under the revised NYSHRL, employers may be found liable for permitting any unlawful discrimination against a nonemployee who is “a contractor, subcontractor, vendor, consultant or other person providing services pursuant to a contract in the workplace . . . when the employer, its agents or supervisors knew or should have known that such non-employee was subjected to an unlawful discriminatory practice in the employer’s workplace, and the employer failed to take immediate and appropriate corrective action.” The new amendments maintain the prior NYSHRL language allowing courts to take into account how much control an employer has over the discriminating party in determining liability and specifically states that “the extent of the employer’s control and any other legal responsibility which the employer may have with respect to the conduct of the person who engaged in the unlawful discriminatory practice should be considered.” This amendment takes effect 60 days after the Bill is signed.

Availability of Punitive Damages and Attorney Fees

The NYSHRL will explicitly allow for the awarding of punitive damages in cases of employment discrimination related to private employers, and for the awarding of reasonable attorney fees in cases of employment discrimination generally. This amendment takes effect 60 days after the Bill is signed and brings the NYSHRL in line with potential damages available under the NYCHRL.

Nondisclosure Preference Agreements Extended to All Discrimination Settlements

The Bill expands the scope of the limitations on nondisclosure agreements—put in place last year for sexual harassment claims—to apply to all types of harassment and discrimination. Specifically, “no employer, its officers or employees shall have the authority to include or agree to include in any settlement, agreement or other resolution of any claim, the factual foundation for which involves discrimination[,] any term or condition that would prevent the disclosure of the underlying facts and circumstances to the claim or action unless the condition of confidentiality is the complainant’s preference.” Further, any confidentiality terms or conditions “must be provided in writing to all parties in plain English, and, if applicable, the primary language of the complainant.” Similar to how sexual harassment claims are handled now, the employee can agree to the confidentiality provisions only after taking 21 days to consider them and executing a separate preference agreement signed by all parties, which the employee can revoke within seven days of execution.

Previously, the preference agreements and the unwaivable 21-day period only applied in cases involving facts or circumstances of sexual harassment, and the confidentiality language did not need to be provided in writing in the primary language of the employee.

Additionally, nondisclosure agreements entered into between employers and employees or potential employees as of January 1, 2020, that prevent the disclosure of factual information related to “any future claim of discrimination” are deemed void and unenforceable unless the agreement includes language specifically notifying the employee that it does not prohibit him or her from speaking with law enforcement, the Equal Employment Opportunity Commission, the New York State Division of Human Rights, a local commission on human rights, or an attorney retained by the employee or potential employee.

This amendment takes effect 60 days after the Bill is signed.

Ban on Mandatory Arbitration of Discrimination Claims

The Bill extends the prohibitions on mandatory arbitration of sexual harassment claims to apply to discrimination and harassment claims generally. Thus, the law purports to prohibit mandatory arbitration clauses that require the parties to arbitrate claims of discrimination, “except as inconsistent with federal law.” This amendment takes effect 60 days after the Bill is signed.

Distribution of Sexual Harassment Policies

In last year’s expansive update on sexual harassment laws, employers were required to provide a copy of their sexual harassment policy to all employees upon commencement of employment. The Bill expands this requirement by now requiring employers to provide their sexual harassment policy and written training materials at each annual required sexual harassment training. These materials must be provided in English and in the employee’s primary language, provided that New York State publishes a template policy in that language. This amendment takes effect immediately after the Bill is signed.

Extended Statute of Limitations to File NYSHRL Sexual Harassment Claim

The Bill amends the NYSHRL to provide for a three-year statute of limitations for sexual harassment claims, whether filed in an administrative agency or in court. This amendment extends the applicable statute of limitations for administrative agency filings, which previously must have been submitted within one year of the harassing behavior. This amendment is limited to sexual harassment claims and the Bill does not extend the one-year statute of limitations for other claims. This amendment takes effect one year after the Bill is signed.

Liberal Construction

Finally, the Bill adds new language into the NYSHRL stating that the NYSHRL should be construed liberally for its remedial purposes, irrespective of how similarly worded federal civil rights laws are construed. This amendment also clarifies that exceptions and exemptions should be construed narrowly.

Implications for Employers in New York State

Employers should immediately review their antiharassment and antidiscrimination policies, codes of conduct, and training materials to ensure that they are compliant with the expanded state law. Employers also should consult with counsel regarding their template settlement agreements for harassment and discrimination claims to ensure that these documents, including any confidentiality language they include, are compliant with the updated NYSHRL.

Finally, employers should consider taking proactive steps to ensure compliance with the law and to foster a work environment where harassment and discrimination are less likely to occur. These steps may include reviewing and revising reporting and investigation procedures, auditing investigation files, implementing new approaches to state-mandated training (such as respectful workplaces, bystander intervention, and implicit bias training), and conducting workplace cultural assessments.