New York Labor and Employment Law Report

In 2018, Governor Cuomo signed a State Budget bill that included various provisions addressing sexual harassment in the workplace.  Among those provisions was a prohibition on including in any written contract a clause requiring the submission of sexual harassment claims to arbitration, except where inconsistent with federal law.  On June 26, 2019, the U.S. District Court for the Southern District of New York held, in Latif v. Morgan Stanley & Co. LLC, that this New York law prohibiting mandatory arbitration of sexual harassment claims is inconsistent with the Federal Arbitration Act and is therefore invalid.

Read More >> Federal Court Holds That New York Law Prohibiting Mandatory Arbitration of Sexual Harassment Claims Is Invalid

On June 19, 2019, the New York State Assembly and Senate passed legislation that makes sweeping changes to the New York Human Rights Law.  This legislation will have a significant impact on the litigation of discrimination and harassment claims filed with the Division of Human Rights and in court.  It is expected that Governor Cuomo will sign the legislation soon.  The legislation does not apply retroactively, so only future claims under the Human Rights Law will be affected.

Read More >> New York Legislature Passes Significant Amendments to the New York Human Rights Law

On June 3, 2019, the United States Supreme Court unanimously ruled in the case of Fort Bend County, Texas v. Davis that the requirement under Title VII of the Civil Rights Act ("Title VII") to file an administrative charge with the Equal Employment Opportunity Commission ("EEOC") is a non-jurisdictional claim-processing rule. In other words, the Court held that a plaintiff's failure to file an EEOC charge does not automatically preclude a federal court from exercising jurisdiction over the complaint; instead, an employer must "promptly" raise the defense that the plaintiff failed to satisfy the procedural requirement of filing an EEOC charge. An employer's failure to raise such a defense promptly could result in forfeiture of the defense, and a federal court may exercise jurisdiction over the complaint despite the plaintiff's failure to file an EEOC charge.

Read More >> U.S. Supreme Court Rules That Title VII's Requirement to File an EEOC Charge Before Commencing a Federal Court Lawsuit is Not a Jurisdictional Rule

On January 15, 2019, the New York legislature passed the Gender Expression Non-Discrimination Act (“GENDA”).  GENDA, which faced more than a decade of impasse in the State Senate, was signed by Governor Cuomo on January 25, 2019.

Read More >> New York Passes GENDA: Discrimination Now Prohibited Based on Gender Identity or Expression

In 1980, the New York Court of Appeals (the highest court in New York) held that the prohibition against "marital status" discrimination contained in the New York State Human Rights Law includes only discrimination based on the status of being married or not married, and does not prevent an employer from taking an adverse employment action against an employee based on the identity or occupation of a person's spouse.  In that case, Manhattan Pizza Hut, Inc. v. New York State Human Rights Appeal Board, the Court upheld the employer's decision to discharge the plaintiff because her husband was employed as her supervisor in violation of the employer's anti-nepotism policy.  In a recent decision, however, the First Department Appellate Division adopted a more expanded definition of marital status discrimination under the New York City Human Rights Law.

Read More >> The First Department Appellate Division Adopts An Expanded Definition of Marital Status Discrimination Under the New York City Human Rights Law

Out-of-state entities with the power to dictate a New York employer's hiring and retention policies take notice:  you can be subject to liability under the New York Human Rights Law ("NYHRL") if you "aid and abet" discrimination against individuals who have a prior criminal conviction, even if you are not the direct employer of those individuals.  In Griffin v. Sirva, Inc., the New York Court of Appeals held that while liability under Section 296(15) of the NYHRL (which prohibits employment discrimination based on prior criminal convictions) is limited to an aggrieved party's employer, liability can extend beyond a direct employer under Section 296(6) of the NYHRL "to an out-of-state non-employer who aids or abets employment discrimination against individuals with a prior criminal conviction." In Griffin, the plaintiffs were employees of Astro, a New York moving company.  The plaintiffs had prior criminal convictions for sexual offenses against children.  After the plaintiffs were hired, Astro entered into a moving services contract with Allied, a nationwide moving company based on Illinois.  As a result of that contract, a large majority of Astro's work was thereafter performed on behalf of Allied. The contract required Astro to adhere to Allied's Certified Labor Program guidelines, one of which required that employees who perform work in a customer's home or place of business pass a criminal background check.  Under Allied's guidelines, employees with prior sexual offense convictions automatically failed the screening.  Pursuant to the contract with Allied, Astro would have been subject to escalating penalties if it used unscreened labor.  Accordingly, the plaintiffs were screened and when their convictions were identified, Astro fired them. The plaintiffs filed suit in the U.S. District Court for the Eastern District of New York against both Astro and Allied, alleging that their terminations based upon their prior criminal convictions violated the NYHRL.  Allied, which was not the plaintiffs' direct employer, moved for summary judgment on the NYHRL claims.  The District Court granted its motion, holding that:  (1) Section 296(15) of the NYHRL applies only to employers and that Allied was not the plaintiffs' employer; and (2) Section 296(6) of the NYHRL (the "aiding and abetting" provision) could not be used to impose liability on Allied because Allied did not participate in firing the plaintiffs. The plaintiffs appealed the District Court's decision to the Second Circuit Court of Appeals, which posed the following three questions to the New York Court of Appeals regarding the interpretation of Section 296(15) and 296(6) of the NYHRL:  (1) Does Section 296(15) of the NYHRL, prohibiting discrimination in employment on the basis of a criminal conviction, limit liability to an aggrieved party's "employer"?  (2) If liability under Section 296(15) is limited to an aggrieved party's employer, what is the scope of the term "employer" for purposes of that provision?  (3) Does Section 296(6) of the NYHRL extend liability to an out-of-state non-employer who aids or abets employment discrimination against individuals with a prior criminal conviction?  The Court answered the first question by holding that liability under Section 296(15) is limited to an aggrieved party's employer.  The Court answered the second question by holding that common law principles of an employment relationship should be applied, "with greatest emphasis placed on the alleged employer's power to 'to order and control' the employee in the performance of his or her work."  The Court answered the final question by holding that an out-of-state non-employer who engages in conduct that aids or abets employment discrimination against individuals with a prior criminal conviction -- for example, by imposing contractual terms on a New York employer prohibiting the use of employees with certain types of criminal convictions from performing work under the contract -- can be held liable under Section 296(6) of the NYHRL if the employer is determined to have violated Section 296(15) of the NYHRL by complying with the terms of the contract. While the plaintiffs' appeal to the Second Circuit regarding the dismissal of their claims against Allied was pending, their claims against Astro (their direct employer) proceeded to a jury trial.  The jury found that Astro did not violate the NYHRL by firing the plaintiffs due to their prior criminal convictions.  Therefore, in this particular case, it does not appear that Allied will be subject to liability.  However, the interpretation of Section 296(6) of the NYHRL set forth by the New York Court of Appeals can certainly be used in future cases to impose liability on an out-of-state non-employer who imposes contractual terms on a New York employer that cause the New York employer to violate Section 296(15) of the NYHRL.

On May 18, the New York State Division of Human Rights adopted a new regulation prohibiting employment discrimination based on an individual’s relationship or association with a member of a protected category covered by the New York Human Rights Law.  The proposed rule was published in the State Register on March 9.  The agency did not receive any public comments regarding the proposed rule, and adopted the rule without making any changes. According to the Division, the purpose of the new regulation is to confirm long-standing precedent supporting anti-discrimination protection for individuals based on their relationship or association with members of a protected class.  The new regulation applies to employment discrimination and all other types of discrimination protected under the New York Human Rights Law, including housing, public accommodations, access to educational institutions, and credit.  In order to prove a claim of employment discrimination in this context, an individual must prove that he or she was subjected to an adverse employment action based on the individual's known relationship or association with a member of a protected class. This latest expansion of the protections afforded by the New York Human Rights Law underscores the importance of basing all employment decisions on legitimate reasons that can be supported by objective facts, and documenting the legitimate reasons for those decisions.  Supervisors should also be trained to apply workplace policies and standards fairly and uniformly among all employees, to further reduce the risk of discrimination claims.

As we have reported in earlier posts, the U.S. Equal Employment Opportunity Commission (“EEOC”) has previously taken the position that discrimination on the basis of “sexual orientation” is prohibited under Title VII of the Civil Rights Act of 1964.  Although not explicitly listed as a protected category under Title VII, the EEOC views sexual orientation discrimination as a form of “associational discrimination” on the basis of sex because it involves an employee being treated differently based on his or her association with a person of the same sex. The EEOC first asserted its position with respect to sexual orientation discrimination in April 2012, in Macy v. Holder, a case in which the Bureau of Tobacco, Firearms and Explosives withdrew an offer of employment after an applicant revealed that she was in the process of transitioning from male to female.  Later that same year, the EEOC issued its Strategic Enforcement Plan, in which the EEOC made “coverage of lesbian, gay, bisexual and transgender individuals under Title VII’s sex discrimination provisions” a top priority.  In July 2015, the EEOC issued another decision against the Federal Aviation Administration in which it held that discrimination based on sexual orientation constituted a form of sex discrimination. On March 1, 2016, the EEOC took its position one step further by filing lawsuits in the U.S. District Court for the Western District of Pennsylvania against Scott Medical Health Center and in the U.S. District Court for the District of Maryland against Pallet Companies, d/b/a IFCO Systems NA, alleging discrimination based on sexual orientation under Title VII. In the suit against Scott Medical Health Center, the EEOC alleges that a gay male employee allegedly suffered harassment in the workplace due to his sexual orientation.  The complaint alleges that the employee’s supervisor referred to him using anti-gay epithets and made offensive comments about his sexuality and sex life.  The complaint further alleges that although the employee complained of how he was treated, his manager refused to take any corrective action, forcing him to resign from his position. In the suit against IFCO Systems, the EEOC alleges that a supervisor harassed a gay female employee because of her sexual orientation.  The complaint alleges that the employee’s supervisor made comments about the employee’s orientation and appearance, and made sexually suggestive gestures toward her.  The complaint further alleges that the employee complained about the harassment but was terminated shortly after making the complaint. In a press release announcing the two lawsuits, the EEOC stated that these two suits “solidify its commitment to ensuring that individuals are not discriminated against in the workplace because of their sexual orientation.” Despite the EEOC’s continued assertions that Title VII encompasses sexual orientation as a protected category, there is no dispute that the plain language of Title VII does not expressly prohibit discrimination on the basis of sexual orientation.  Of course, employees in New York are nevertheless protected against discrimination based on sexual orientation, because the New York Human Rights Law already includes such protection.  If defense counsel challenges the EEOC’s interpretation, the federal district courts will have the opportunity to establish a precedent regarding whether this protection also exists under Title VII.

When an employee or former employee files a discrimination charge with the Equal Employment Opportunity Commission ("EEOC"), the first step in the investigation is generally the EEOC's request for a position statement from the employer in response to the charge.  Although many employers depend on their labor and employment counsel to gather the necessary information and submit the position statement on their behalf, some employers choose to handle the submission of the position statement themselves.  Employers that submit their own responses should be aware that the EEOC has published new procedures for how it will handle the release of information contained in employer position statements to the charging party.  The EEOC's new procedures and a Q&A for employers can be found on the EEOC's web site here. According to these new procedures, the EEOC will begin releasing employer position statements and “non-confidential attachments” to the position statements to a charging party upon request during the EEOC’s investigation.  The charging party will be permitted to submit a response to the EEOC investigator.  Notably, the EEOC procedures advise charging parties that they can submit this response in writing or they can simply call the investigator to discuss their response.  Employers will not be able to receive a copy of the charging party’s response, even if it is submitted in writing. Historically, a charging party’s ability to obtain the employer’s position statement and/or exhibits varied depending upon the individual procedures of each EEOC District Office.  These new nationwide procedures are intended to make the EEOC’s approach uniform across all offices. Under these new procedures, an employer that submits a position statement is directed to refer to, but not identify, the information it considers “confidential” and to provide that information in a separate attachment that will not be shared with the charging party.  Justification must be included to explain the segregation of this information.  This “confidential” information includes, and must be labeled as, one of the following:

• sensitive medical information (except for the charging party’s medical information);
• social security numbers;
• confidential commercial or financial information;
• trade secret information;
• non-relevant personally identifiable information of witnesses, comparators, or third parties, such as social security numbers, dates of birth in non-age cases, home addresses, phone numbers, etc.; or
• any references to charges filed against the employer by other charging parties.

These new procedures apply to all EEOC requests for employer position statements on or after January 1, 2016.

As we reported in a blog post last month, although neither the federal nor state law expressly prohibits discrimination on the basis of gender identity or expression, Governor Cuomo bypassed the legislative process and urged the New York State Division of Human Rights to issue regulations that will interpret the state’s anti-discrimination prohibitions to cover transgender individuals.  Just this week, the New York State Division of Human Rights adopted those regulations.  The regulations, which became effective on Wednesday, make discrimination or harassment against transgender applicants and employees unlawful, and require employers to accommodate transgender individuals who have been diagnosed with a medical condition referred to as “gender dysphoria” – a medical condition related to an individual having a gender identity different from the sex assigned to him or her at birth. In addition, the New York City Commission on Human Rights recently issued a guidance document on what constitutes discrimination against transgender people under the New York City Human Rights Law.  The Commission’s guidance provides numerous examples of employer actions that violate the NYCHRL, including failure to use an individual’s preferred name, pronoun or title, denying transgender employees the use of restrooms consistent with their gender identity, and even enforcing dress codes that make differentiations based on sex or gender.  The Commission’s recent guidance also announces much more strict penalties for transgender discrimination.  Under the NYCHRL, civil penalties can range from $125,000 to $250,000 for violations that are deemed to be “willful, wanton or malicious.”  The Commission announced that, among other factors, it will consider the lack of an adequate discrimination policy as a factor in assessing penalties. Employers should review and revise their EEO and anti-harassment policies in light of these recent changes.  Employers should also consider taking steps to educate and train their employees regarding these new requirements.

After several unsuccessful attempts to pass the Gender Expression Nondiscrimination Act, which would have extended the nondiscrimination protections in the New York Human Rights Law to transgender individuals, Governor Cuomo took the unprecedented step of directing the New York State Division of Human Rights to issue regulations that would protect transgender applicants and employees in New York. The proposed regulations, which were published in the New York State Register on November 4, 2015, make discrimination and harassment on the basis of gender identity or the status of being transgender a form of sex discrimination prohibited under state law.  The proposed regulations would also make “gender dysphoria” a protected disability under state law, prohibit harassment on the basis of one’s gender dysphoria, and obligate employers to provide accommodations to employees diagnosed with gender dysphoria.  The regulations define “gender dysphoria” as a “recognized medical condition related to an individual having a gender identity different from the sex assigned to him or her at birth.” The 45-day comment period recently ended, which clears the way for the Division of Human Rights to adopt the regulations.  However, it is anticipated that the Division will wait until early 2016 to begin enforcing the Human Rights Law with respect to transgender applicants and employees.  The anti-discrimination statute in New York City and several other city ordinances already extend protection to transgender individuals.  In addition, earlier this year, the Department of Justice and the EEOC began interpreting the sex discrimination prohibition in Title VII of the Civil Rights Act to cover discrimination against transgender individuals.  The Office of Federal Contract Compliance Programs also issued a final rule prohibiting federal contractors from discriminating against employees or applicants based on their sexual orientation or gender identity. A great deal of litigation is likely to occur in this area in the upcoming year, not only to challenge the application of the various federal and state laws to transgender individuals, but also to address complex and sensitive issues including how employers will need to handle issues of confidentiality, employee benefits, accommodations for restroom access, and other issues that might arise for employees transitioning from one gender to another.  Employers would be well-advised to begin to review their employee handbooks and other employment policies and practices to prepare for these expanded protections for transgender employees and applicants.

New York employers take notice:  an amendment to New York’s equal pay law (S.1/A.6075) was signed by Governor Cuomo on October 21, 2015.  The law amends Labor Law Section 194, which prohibits pay differentials based on gender in jobs requiring “equal skill, effort and responsibility” which are “performed under similar working conditions.”  The bill was passed by the Assembly in April, and by the Senate in January, and the changes are significant. The amendment to Labor Law Section 194 is one of eight laws aimed at gender equality issues that Cuomo signed last week.  Of interest to employers, several of the other laws also touch on employment issues.  Those other laws:

• Extend the prohibition on sexual harassment to all employers, including those with less than four employees (S.2 / A.5360);
• Allow employees to obtain attorneys’ fees when they prevail in sex discrimination lawsuits (S.3 / A.7189);
• Add “familial status” to the list of protected traits under the New York State Human Rights Law (S.4 / A.7317); and
• Add a requirement to the Human Rights Law that employers must provide reasonable accommodations to all pregnant employees, not just those with a pregnancy-related disability (S.8 / A.4272).

The laws are slated to take effect on Tuesday, January 19, 2016. The premise of the pay equity amendment is simple and appealing:  the same day’s pay for the same day’s work.  At first glance, this is not big news.  The state labor law and federal law already require equal pay without regard to gender.  However, this law tightens and strengthens Section 194 in ways that will undoubtedly impact many New York workplaces. First, under existing law, an employer can defend a pay discrimination claim by showing that the difference in pay is justified by a seniority system, a merit system, a system measuring earnings based on quantity or quality of work, or “any other factor other than sex.”  This catch-all was viewed by many as a loophole and hindered the success of many pay discrimination claims.  The new law replaces the “any other” defense with the following:  "a bona fide factor other than sex, such as education, training, or experience."  This bona fide factor must be job-related and consistent with business necessity.  Notably, the burden is on the employer to prove the existence of this bona fide factor; it is not on the complaining employee to prove discriminatory motive (as in other types of employment discrimination litigation). As any employer can attest, many factors other than sex go into compensation decisions.  Under the old law (and still under federal law), these other factors typically held up to the test of “any other factor other than sex.”  It is not clear which factors will hold up under the new law.  For example, are market forces still a defense?  In a competitive market for talent, an employer might pay a new hire more than employees currently performing the same job simply because the market demands it.  Perhaps the candidate has an offer from a competitor that the employer must match to attract the candidate.  Often, internal compensation lags behind external market.  Whether market forces will be considered “a bona fide factor other than sex, such as education, training, or experience” remains to be seen. Moreover, even if an employer establishes a “bona fide factor” to justify a gender pay difference, an employee can still prevail under the new law by showing that:  (a) the bona fide factor has a disparate impact on one sex; (b) alternative employment practices exist that would serve the same business purpose and not produce the pay differential; and (c) the employer refused to adopt the alternative practice.  The lack of clarity over what will be considered a “bona fide factor” will undoubtedly result in a wave of litigation. Second, the Pay Equity Act gives employees the right to openly inquire about, disclose and discuss their wages.  Employers cannot prohibit these conversations.  Rather, the employer may only establish and distribute a written policy containing “reasonable workplace and workday limitations on the time, place and manner” for pay discussions.  The law states that an example of a reasonable limitation would be a rule that an employee may not disclose a co-worker’s pay without the co-worker’s permission.  The law contains some recognition that certain employees must still maintain confidentiality of pay information:  an employer may prohibit an employee with access to other employees’ pay information as part of their job from disseminating that information to others who do not have the same access. This right to openly discuss pay is new to New York law, but it is consistent with the National Labor Relations Board’s position that an employee’s right to openly discuss wages is protected by the National Labor Relations Act. Third, the law contains dramatically higher penalties than other state employment discrimination and wage/hour laws.  Employers who are found to have willfully violated the Equal Pay Act are subject to liquidated damages in the amount of 300% of the wages owed.  In other words, in addition to making the employee whole for any unlawful difference in pay, there is an additional potential penalty of three times those wages.  Other provisions of the New York Labor Law provide for liquidated damages of “only” 100%. As stated above, the law takes effect on January 19, 2016.  Therefore, employers should act quickly to evaluate any potential exposure.  Now is the time to review pay rates to ensure any gender differences can be justified based on the factors in the statute.  Consider whether these factors are job-related and consistent with business necessity.  Additionally, employers should review their written policies, particularly confidentiality policies, to ensure they do not contain restrictions on the right to share or discuss compensation information, and revise as necessary.  Similarly, supervisors should be made aware that they may not prohibit conversations about pay.  Finally, consider the pros and cons of adopting a new policy setting reasonable limits on the time, place and manner of pay discussions.