Reminder: New York Election Law Notices Should Be Posted Today
October 25, 2016
New York Labor and Employment Law ReportNew York LawReminder: New York Election Law Notices Should Be Posted TodayOctober 25, 2016
New York’s Election Leave Law requires employers to post a voting leave notice at least ten (10) working days before "every election." This year, the general election will be held on November 8, 2016. Therefore, employers must, if they have not already done so, post a notice no later than today, October 25, 2016.
A sample of the notice required under the New York Election Law can be found on the New York State Board of Elections web site. This notice must be posted at least ten (10) working days before the election “conspicuously in the place of work where it can be seen as employees come or go to their place of work” and must remain in place until the polls close on Election Day. The Election Law requires the notice to be posted before “every election” – not just general elections – so employers should consider whether to keep this notice posted throughout the year.
In addition to posting the notice, employers should also make sure to afford employees voting leave when obligated to do so. Under New York Election Law § 3-110, registered voters are entitled to take up to two (2) hours of paid time off from work if they do not have “sufficient time" outside of their working hours to vote. If the registered voter has four (4) consecutive hours either between the opening of the polls and the beginning of the working shift, or between the end of the working shift and the closing of the polls, it will be assumed that the voter has sufficient time to vote. (For general elections, the polls in New York State open at 6:00 a.m. and close at 9:00 p.m.).
However, the voter is not automatically entitled to take paid time off to vote if he or she does not have four consecutive hours at the beginning or at the end of the working shift. The voter must still show that the time he or she has at the beginning or at the end of the working shift is not sufficient to vote. If the voter can make such a showing, the voter will be entitled to take only as much paid time off (up to a maximum of two (2) hours) that, when added to the voting time the voter has outside working hours, will enable the individual to vote. Furthermore, New York’s Election Leave Law requires employees to notify the employer at least two (2) working days, but not more than ten (10) working days, prior to the election of the need for voting leave. For this year’s general election, requests for time off to vote should be made between Tuesday, October 25, 2016 and Friday, November 4, 2016. The employer may designate that this paid leave be taken off at the beginning or the end of the working shift, unless there is another mutually-agreed upon time.
New York State DOL Issues Regulations on Payroll Debit CardsSeptember 19, 2016
On September 7, 2016, the New York State Department of Labor adopted regulations governing the payment of employee wages by any method other than cash or check, including direct deposit and payroll debit cards. The purpose of the new rules, which will become effective on March 7, 2017, is to ensure that workers who are paid via payroll debit cards have access to their wages in full without being subjected to hidden fees.
At least seven business days before taking action to pay employees via payroll debit cards, employers must satisfy certain notice requirements and obtain employees’ informed consent. For example, employers must provide employees with:
New York\'s Fantasy Sports Law at WorkAugust 19, 2016
On August 3, 2016, Governor Andrew Cuomo signed a law legalizing fantasy sports in New York. The timing is critical to the industry, as it may enable major fantasy sports providers to reopen operations in New York by the beginning of the National Football League season in September. Football is easily the most popular U.S. sport for fantasy sports.
It’s hard to anticipate the full impact of the new law on New Yorkers’ level of participation in fantasy sports. But it’s safe to predict that many thousands of them will be back in the game soon. Most of these participants are employees somewhere, and many will be tempted to research or set their lineups during work time instead of performing their regular jobs. With this in mind, here’s a fantasy sports primer for New York employers.
Overview of Fantasy Sports
Americans have participated in fantasy sports for more than 30 years. Originally, the concept was for a group of friends, perhaps co-workers, to get together at the beginning of the season for a particular professional sports league and select a team of players from among those actually playing in the league. Each fantasy team earns points based on the real-life performance of their “players.” Then, in essence, whichever team has the most points over the course of the season wins the fantasy league.
The internet facilitated the expansion of fantasy sports, making it much easier to administer leagues, including those with participants from various geographic locations.
Over the past few years, a new breed of fantasy sports has rapidly emerged. So-called “daily” fantasy sports (popularly abbreviated as “DFS”) contests have been developed to enable people to pick a new team or teams as often as each day, rather than be stuck with the same players over the course of a whole season. Technically, the name of this sub-category of fantasy sports is something of a misnomer. DFS has developed to have contests ranging from only a small subset of a particular league’s games in a single day to a number of games spread out over a whole week. But the key distinction is that the winner is determined based on a much shorter period than an entire season.
Because the results of DFS contests are based on so few games within a sport, they more closely resemble betting on particular games. As a result, this type of fantasy sports has drawn legal attack in a number of states even though the traditional season-long fantasy games have been generally tolerated with little challenge. In fact, since 2006, a federal law has seemingly carved out fantasy sports from prohibitions on internet gambling. However, the Unlawful Internet Gambling Enforcement Act does not itself make fantasy sports of any variety legal under state laws.
Scope of the New Fantasy Sports Law
Fundamentally, the New York law specifically declares that “interactive fantasy sports are not games of chance.” In other words, the Legislature has found that, based on the skill involved in these games, playing them is not gambling in New York.
The law is not technically limited to DFS. Rather, it encompasses more traditional fantasy sports games as well, even though the earlier-created season-long fantasy sports have not been subject to much scrutiny in the past.
Now, any person or entity that wishes to operate any fantasy sports contests in New York where entry fees are paid must register with the New York State Gaming Commission. The law provides for temporary permits to be issued to operators who had already been providing fantasy sports games prior to November 10, 2015 (when the New York State Attorney General had declared daily fantasy sports to be illegal).
Significantly, this law specifically prohibits the following people from playing fantasy sports where an entry fee is paid:
When Reclassifying Employees from Exempt to Non-Exempt, Don't Forget the Wage Theft Prevention Act NoticesJuly 21, 2016 Employers in New York are familiar with the requirement, imposed by the Wage Theft Prevention Act, that every new hire must be provided with notice of their rate of pay (including overtime rate of pay if applicable), how the employee will be paid (i.e., by the hour, shift, day, etc.), the regular payday, and information regarding the employer. Employers are obligated to provide an additional written notice anytime that information changes, unless the employee's wage rate is increased and the next pay stub reflects the increase. Each time notice is given, the employer is required to obtain a signed acknowledgment from the employee, and must keep that signed acknowledgement on record for six years. Upcoming changes to the white collar exemptions under the Fair Labor Standards Act may implicate a need to issue new notices if employees are reclassified from exempt to non-exempt. As the law currently stands, employees must earn a minimum salary of $455.00 per week ($23,660 per year) to qualify for one of the white collar exemptions (administrative, executive, or professional) under the FLSA. New York currently has a higher salary threshold of $675.00 per week ($35,100 per year) for an employee to qualify for the administrative or executive exemptions. The current threshold for employees to meet the "highly compensated employee" exemption under the FLSA is $100,000 per year. Starting on December 1, 2016, however, these thresholds will rise substantially. The increased salary threshold for the administrative, professional, and executive exemptions will be $913.00 per week ($47,476 per year). The new threshold for the highly compensated employee exception will be $134,004 per year. These thresholds are set to increase every three years after that, with the first increase taking effect on January 1, 2020. This change will force many employers to reclassify employees who are currently exempt, but do not meet the new salary threshold, as non-exempt. Any such reclassification will affect the rates those employees are paid, how they are paid, and their eligibility for overtime pay. Given this impact, what legal obligation will the reclassification trigger? You guessed it -- the WTPA’s notice requirement. Accordingly, employers should be mindful of this notice requirement when reclassifying employees in order to comply with the updated regulations, or when making any other changes to employee’s rates or method of payment. Although the "pay stub exemption" may apply in some limited instances, the best practice is to provide employees with formal written notice that complies with the WTPA when making any such changes. New York State DOL (Yet Again) Issues Draft Regulations on Payroll Debit Cards and Other Wage Payment IssuesJuly 12, 2016
After a nearly eight-month delay, the New York State Department of Labor once again published draft Regulations governing the payment of employee wages via payroll debit cards, direct deposit, and other means. As we previously reported, these proposed Regulations would impose several new requirements for New York employers, even for those who merely pay employees by direct deposit. These proposed Regulations – now NYSDOL’s third version – are currently open for public comment.
The most recent version is almost identical to the version last proposed in October 2015, with NYSDOL making only two substantive changes: (1) the newly-proposed Regulations make clear that the requirement to provide employees with a “list of locations” -- where they can access and withdraw their wages -- only applies to the use of payroll debit cards; and (2) the newly-proposed Regulations remove language included in the October 2015 version, which provided that, when paid by check, employees must have at least one means of no-cost local access to the full amount of wages through check cashing or deposit of a check at a financial institution (but NYSDOL nevertheless stated that employers must still “ensure that employees are able to access their wages in order for payment to be effective in accordance with the requirements of Section 191 of the Labor Law”). Notably, NYSDOL reiterated that the proposed Regulations will not be effective until six months after they are published and adopted in final form.
The reason for the eight-month delay on the part of the NYSDOL in issuing these revised draft Regulations is unclear, but it is expected that final rule-making will now proceed in a timely manner.
Employment Law's "Hulk"-Like Superhero -- The Faithless Servant Doctrine -- Just Got StrongerJune 6, 2016 One of the many joys of parenthood is the opportunity to relive one’s childhood. To a parent who grew up on the old-school comic books, the steady roll-out by Marvel Studios of big budget super-hero movies offers a unique bonding opportunity with one’s children, which can take place over a uniquely unhealthy massive bowl of movie theater popcorn (with the glee from the experience outweighing the fear of the hyper-caloric intake). My kids frequently ask me about my favorite superhero. To me it is undoubtedly Hulk, a character who metes out just-desserts -- an admirable goal for a management-side employment lawyer (the side of angelic innocence). Hulk is not Hulk unless provoked. As Bruce Banner he is a quintessential good guy, just like all of us in the world of Human Resources. That brings us to Hulk’s relationship with employment law. We need a Hulk when our employees steal from us, harass other employees, take our trade secrets, and secretly compete against us. But in the real world where does one find a muscle-bound green skinned superhero that is pretty much indestructible? Enter the faithless servant doctrine. In New York, the faithless servant doctrine is more than one hundred years old. This doctrine, a subspecies of the duty of loyalty and fiduciary duty, requires an employee to forfeit all of the compensation he/she was paid from his/her first disloyal act going forward. The doctrine applies to a wide-array of employee misconduct, including unfair competition (Maritime Fish Products, Inc. v. World-Wide Fish Products, Inc., 100 A.D.2d 81, 474 N.Y.S.2d 281 (1st Dep't 1984)), sexual harassment (Astra USA Inc. v. Bildman, 455 Mass. 116, 914 N.E.2d 36 (2009)), insider-trading (Morgan Stanley v. Skowron, 2013 WL 6704884 (S.D.N.Y. 2013)), theft (William Floyd Union Free School District v. Wright, 61 A.D.3d 856, 877 N.Y.S.2d 395 (2d Dep’t 2009)), and off-duty sexual misconduct (Colliton v. Cravath, Swaine & Moore, LLC., 2008 WL 4386764 (S.D.N.Y. 2008)). As the faithless servant doctrine becomes more well-known, the full breadth of its power continues to be litigated. Specifically, just how much damage can this doctrine inflict? Disloyal employees have argued that forfeiture under the doctrine should be limited to a so-called “task-by-task” apportionment. Under this argument, if an employee earns for example $200,000 a year and steals $20,000 over five months in four separate transactions, the remedy is a return of the stolen funds and a salary forfeiture of a day’s pay on each of the four days of misconduct. But, whatever superficial appeal this argument may have, once the employee steals we enter Hulk’s world, and Hulk does not deliver justice with surgical precision. Rather, in the immortal words of Captain America, Hulk “smashes.” In William Floyd Union Free School District v. Wright, 61 A.D.3d 856, 877 N.Y.S.2d 395 (2d Dep’t 2009) (argued by the author of this article), the Second Department rejected the task-by-task apportionment argument, holding: “Where, as here, defendants engaged in repeated acts of disloyalty, complete and permanent forfeiture of compensation, deferred or otherwise, is warranted under the faithless servant doctrine.” The forfeiture in that case included all salary and deferred compensation, including paid health and life insurance in retirement. Turning back to our hypothetical, the faithless servant doctrine requires not only the return of the $20,000 stolen, but also forfeiture of all of the salary paid to the employee after the first theft and any related deferred compensation, such as contractual payments owed upon retirement. Despite the William Floyd decision, disloyal employees have tried in earnest to limit the scope of the forfeiture. On June 2, 2016, the Third Department added strength and vigor to the faithless servant doctrine in a case where an employee committed repeated acts of theft. In City of Binghamton v. Whalen (also argued by the author of this article), the Court reaffirmed the strict application of the faithless servant doctrine: “We decline to relax the faithless servant doctrine so as to limit plaintiff’s forfeiture of all compensation earned by the defendant during the period of time in which he was disloyal.” The Court specifically noted that the faithless servant doctrine is designed not merely to compensate the employer, but also to create a harsh deterrent against disloyalty by employees. The Court ordered the disloyal employee to pay back $316,535.54 (which was all of the compensation earned by the employee during the nearly six-year period of disloyalty), and held that the employer was relieved of the obligation to provide the disloyal employee with health insurance benefits earned through his employment. The City of Binghamton decision solidifies the Hulk-like power of the faithless servant doctrine -- a remedy that serves up justice with “smashing” deterrent impact. Division of Human Rights Adopts Regulation Prohibiting Discrimination Based on Relationship or AssociationJune 3, 2016 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. New York Increases the Minimum Wage and Enacts Paid Family LeaveApril 12, 2016
On April 4, 2016, Governor Cuomo signed legislation, as part of the 2016-2017 state budget, enacting a $15.00 minimum wage plan and a 12-week paid family leave benefit.
Minimum Wage Increase
The legislation includes a historic increase in the minimum wage (currently $9.00 per hour) that will ultimately reach $15.00 per hour for all workers in New York State. The increases vary based on employer size and geographic location as follows:
How Would a Noncompete Hold in the Star Wars Universe?February 25, 2016
The following article was first published in Employment Law 360 on February 24, 2016.
Being both an employment law geek and a "Star Wars" geek, I can’t help but watch the "Star Wars" movies through the troublesome lenses of my employment lawyer glasses, nor can I practice employment law without various “Yodaisms” running through my mind (e.g., “Do or do not. There is no try.”). Having watched all of the "Star Wars" movies, it occurred to me while watching "Star Wars: The Force Awakens," that the most fundamental source of disturbances in the Force are key characters — employees, if you will, for the purposes of this article — joining competitor masters (employers) with catastrophic results. Darth Vader, Count Dooku and Kylo Ren all started their careers with the Jedi before leaving to a competitor.
But what if they couldn’t? How would a New York court view a noncompete agreement in the context of the Jedi Order? Below is my best estimate as to how it would play out, at least in the lower court.
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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LUKE SKYWALKER’S JEDI ACADEMY,
Plaintiff,
-against- Index No. 2016/R2D2
KYLO REN, THE FIRST ORDER AND SNOKE,
Defendants.
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Miller, J.
This case comes before the Court on Plaintiff’s motion for a preliminary injunction: (1) enjoining defendant Kylo Ren from working for Defendants Snoke and the First Order; and (2) enjoining the Defendants from using Plaintiff’s trade secrets and usurping its customer relationships. For the reasons stated below, subject to Plaintiff’s posting of a sufficient undertaking, the Court grants the motion for a preliminary injunction.
Facts
The Court assumes the parties’ familiarity with the facts and will state them only briefly here. Plaintiff at all times relevant to this proceeding operates a Jedi Training Academy for the purpose of teaching its pupils (Padawans) how to use the “light-side” of the Force. Defendant Kylo Ren is a former employee of the academy who was terminated for various alleged acts of misconduct (discussed, infra). During the course of his employment, Ren signed a noncompete agreement in which he agreed not to compete against the academy for a period of one year following his separation.
Notwithstanding the noncompete agreement, immediately upon his termination, Ren commenced employment with Snoke and the First Order. The parties stipulate that Snoke and the First Order are direct competitors of the academy and the constituency it serves. The present litigation ensued. The parties agreed to venue this matter in New York County, as it is apparently the only venue in which individuals from the “bar scenes” from "Star Wars IV" and "Star Wars VII" can blend in without feeling self-conscious. New York law controls this matter despite the choice of law provision regarding “Intergalactic Law” because that law is too employer-friendly. See Brown & Brown Inc. v. Johnson, 25 N.Y.3d 364 (2015).
Standard for Issuing an Injunction
The standard for obtaining a preliminary injunction is well-known. The moving party must show the following: (1) the likelihood of ultimate success on the merits; (2) threat of irreparable injury absent the granting of the preliminary injunction; and (3) that the equities are balanced in its favor. See McLaughlin, Pivin, Vogel Inc. v. W.J. Nolan & Company Inc., 114 A.D.2d 165, 172 (2d Dep’t 1986).
Enforceability of the Noncompete
The Court of Appeals has espoused a three-pronged test for determining whether a restrictive employment covenant will be enforced. An agreement will be enforced if it: (1) is no greater than is required for the protection of the legitimate interest of the employer, (2) does not impose undue hardship on the employee, and (3) is not injurious to the public. BDO Seidman v. Hirshberg, 92 N.Y.2d 382, 388-89 (1999). Legitimate employer interests include protection of trade secrets and customer relationships.
Ren argues that, as a threshold matter, because he was terminated without cause, the noncompete cannot be enforced against him. Post v. Merrill Lynch, Pierce, Fenner & Smith Inc., 48 N.Y.2d 84, 88 (1979). There is currently a split in the appellate divisions on this issue. The Second Department follows the rule against enforcement where an employee was terminated without cause. Grassi & Co., CPAs PC v. Janover Rubinroit LLC, 82 A.D.3d 700, 702 (2d Dep’t 2011); Borne Chemical Co. Inc. v. Dictrow, 85 A.D.2d 646 (2d Dep’t 1981). Conversely, the First Department is more wary in its application of the rule. Bell & Co. PC v. Rosen, 2012 N.Y. Misc. LEXIS 6230 (N.Y. Cnty. Sup. Ct. Nov. 8, 2012), aff’d, 979 N.Y.S.2d 564 (1st Dep’t 2014).
The Fourth Department has also held on numerous occasions that involuntary termination without cause will not necessarily preclude enforcement of a noncompete. Eastman Kodak Co. v. Carmosino, 77 A.D.3d 1434, 1436 (4th Dep’t 2010); Wise v. Transco Inc., 425 N.Y.S.2d 434 (4th Dep’t 1980).
This Court need not resolve this conflict because the Court finds that Ren has stolen trade secrets. Consequently, the Court can and will issue a preliminary injunction on this issue irrespective of the existence of a valid noncompete. See, e.g., Churchill Communications Corp. v. Demyanovich, 668 F. Supp. 207, 211 (S.D.N.Y. 1987) ("Of course, an employee’s use of an employer’s trade secrets or confidential customer information can be enjoined even in the absence of a restrictive covenant when such conduct violates a fiduciary duty owed by the former employee to his former employer.").
Trade Secrets
A trade secret is defined as "any formula, pattern, device or compilation of information which is used in one's business, and which gives [the owner] an opportunity to obtain an advantage over competitors who do not know or use it." North Atlantic Instruments Inc. v. Haber, 188 F.3d 38, 49 (2d Cir. 1999); see also Ashland Management Inc. v. Janien, 82 N.Y.2d 395, 407 (1993) (discussing six-factor test). Plaintiff argues that as an employee of the academy, Ren was entrusted with access to all manner of trade secrets, including how to use various mind tricks, construct a lightsaber and turn into a “force ghost.” Further, Ren was provided with lists of individuals sympathetic to the cause of the rebellion (customer lists).
Ren argues that despite the mystique of the Jedi, nothing they do rises to the level of a trade secret. According to Ren, a cursory Google search will reveal how to do mind tricks and any elementary school student with a computer and a basement can construct their own lightsaber (albeit poorly shaped). We disagree with this analysis.
While Ren is correct that an employer has the burden of demonstrating that "it took substantial measures to protect the secret nature of its information," (see Geritrex Corp. v. Dermarite Industries LLC, 910 F. Supp. 955, 961 (S.D.N.Y. 1996)), Plaintiff has met its burden. Only a select few are provided with its secrets, its secrets are only revealed in secure locations, and any computerized lists are password-protected, encrypted and stored in the vaults of droids. Further, the trade secrets cannot, as Ren contends, be so easily learned or reverse engineered. Ren’s own incomplete lightsaber reveals that guarded secrets are still needed to complete it.
In any event, the record is clear that Ren took physical copies of the academy’s confidential information, namely sympathizer lists, a partially working lightsaber, and force ghost manuals.
It is well-settled that "an employee’s illegal physical taking or copying of an employer’s files or confidential information constitutes actionable unfair competition." Advance Magnification Instruments Ltd. v. Minuteman Optical Corp., 135 A.D.2d 889 (3d Dep’t 1987).
Further, "if there has been a physical taking or studied copying of confidential information, the court may in the proper case grant injunctive relief, not necessarily as a violation of a trade secret, but as an egregious breach of trust and confidence while in plaintiff’s service." Garbor GuyButler Corporation v. Cowen & Co., 155 Misc.2d 39 (N.Y. Cnty. Sup. Ct. 1992); see also Ecolab Inc. v. Paolo, 753 F. Supp. 1100, 1112 (E.D.N.Y. 1991) ("Moreover, even if this information did not independently rise to the level of a trade secret, [the former employees’] wrongful retention of the customer information would justify treating it as a trade secret."); Marcone APW LLC v. Servall Co., 85 A.D.3d 1693, 1696 (4th Dep’t 2011) (“In any event, even assuming, arguendo, that the misappropriated information is not entitled to trade secret protection, we conclude that the court properly determined that injunctive relief is warranted on the alternative ground of breach of trust by the individual defendants in misappropriating plaintiff’s proprietary information.”)
Irreparable Harm
"It is clear that irreparable harm is presumed where a trade secret has been misappropriated." Lumex v. Highsmith, 919 F. Supp. 624, 628 (E.D.N.Y. 1996). This is because a trade secret, once lost, is lost forever; its loss cannot be measured in money damages. North Atlantic Instruments Inc. v. Haber, 188 F.3d 38, 49 (2d Cir. 1999) (quoting FMC Corp. v. Taiwan Tainan Giant Industrial Co., 730 F.2d 61, 63 (2d Cir. 1984).
Scope of the Injunction
Ren is directed to return all hard copies of any trade secrets he has taken from the academy and destroy any electronic version of any trade secret in his possession. For a period of one year, Ren may work for Snoke and the First Order, but not in any capacity that requires the use of the Force. Plaintiff argues that under the Inevitable Disclosure Doctrine, Ren should be barred from working for the First Order in any capacity. The Court will address this argument after further briefing in the context of summary judgment on Plaintiff’s request for a permanent injunction. Ren may discuss joining the First Order with individuals and entities who are his own relatives, personal friends and/or “who, without solicitation, approach [him],” (Eastern Business Systems Inc. v. Specialty Business Solutions LLC, 292 A.D.2d 336, 338 (2d Dep’t 2002); see also Frank Crystal & Co. v. Dillmann, 84 A.D.3d 704 (1st Dep’t 2011); Weiser LLP v. Coopersmith, 74 A.D.3d 465 (1st Dep’t 2010)), or who wanted to leave the academy on their own accord. Data Systems Computer Centre Inc. v. Tempesta, 171 A.D.2d 724 (2d Dep't 1991).
The foregoing shall constitute the Order of this Court.
New York State Division of Human Rights Adopts Regulations Prohibiting Discrimination Against Transgender IndividualsJanuary 22, 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.
New York Adopts Tipped Worker and Fast Food Worker Minimum Wage RegulationsDecember 23, 2015
As we reported previously, the New York State Department of Labor (“NYSDOL”) proposed a series of new regulations earlier this year. These proposals included new regulations raising the minimum wage and reducing the maximum available “tip credit” for certain workers in the hospitality industry, and new regulations implementing the recommendation of Governor Cuomo’s Fast Food Wage Board to raise the minimum wage for fast food workers to $15.00 per hour. Today, both sets of regulations were formally adopted and published in the New York State Register.
These new regulations are effective on December 31, 2015, and contain no changes from what NYSDOL originally proposed earlier this year. For more information about these regulations, readers can access our prior blog article. Among other things, as of December 31, 2015, certain tipped workers who fall under New York’s Hospitality Industry Wage Order must be paid at least $7.50 per hour and may only receive a maximum “tip credit” of $1.50 per hour. Also, as of this same date, covered fast food workers must be paid at least $9.75 per hour if they are employed outside of New York City or at least $10.50 per hour if they are employed inside of New York City. These minimum wages for covered fast food workers are set to automatically increase annually, eventually reaching $15.00 per hour on December 31, 2018 in New York City and on July 1, 2021 in all other areas of New York.
There may be legal challenges to these recently-adopted regulations, in particular the regulations impacting employers in the fast food industry. We will continue to report any noteworthy developments here.
The Division of Human Rights Proposes Regulations to Expand Anti-Discrimination Protections to Transgender IndividualsDecember 23, 2015
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.
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