In the wake of the "Me Too" movement, both the State of New York and New York City have joined the growing number of state and local legislatures that have passed new laws designed to prevent sexual harassment in the workplace. Both the New York State budget for fiscal year 2019 (the budget), by amending a number of existing laws, and New York City's Stop Sexual Harassment in NYC Act (NYC act) impose obligations on employers to provide annual sexual harassment training. The budget also prohibits sexual harassment of non-employee service providers (such as consultants), using nondisclosure clauses in settlements of sexual harassment claims, and mandating arbitration of such claims. With the requirement to provide training to New York City employees taking effect on April 1, 2019, and now that the New York City Human Rights Commission has posted its online training module, it is the ideal time for New York employers to implement the required training programs and conduct a fulsome review of their sexual harassment prevention policies and practices. This alert describes the obligations imposed under the budget and NYC act and the steps employers should take to comply with these laws.

New York State Budget

The five principal components of the budget are as follows:

1. Requirement to Adopt a Sexual Harassment Policy 
   
   The budget amends the New York Labor Law to require employers of any size to either adopt the state's model sexual harassment/prevention policy or institute their own policy that meets or exceeds the minimum standards set forth in Section 201-g of the Labor Law (reflected in the state's model policy), including a standard complaint form and procedures for a prompt and confidential investigation of sexual harassment complaints.
2. Requirement to Provide Sexual Harassment Training
   
   The budget also amends the Labor Law to require employers to provide interactive training to employees on issues of sexual harassment. Employers must provide this training to existing employees by October 9, 2019, and to new hires as soon as possible. Employees must thereafter receive the training at least once every calendar year. These training requirements apply to all employees who work a portion of their time in New York State.
3. Protections for Non-Employees
   
   The budget amends the New York State Human Rights Law to make it an unlawful discriminatory practice for an employer to permit sexual harassment of "non-employees" (e.g., contractors, vendors or consultants) at its workplace. Under the amended law, an employer may be liable if its agents or supervisors "knew or should have known" that the non-employee was exposed to sexual harassment in the employer's workplace and "failed to take immediate and appropriate corrective action."
4. Limitations on Confidentiality Clauses Relating to Sexual Harassment
   
   The budget also amends the New York Civil Practice Law and Rules (CPLR). Employers are now prohibited from including nondisclosure provisions in any settlement agreement or other resolution of any claim "the factual foundation for which involves sexual harassment," unless the "condition of confidentiality is the complainant's preference." 
   
   For such a nondisclosure provision to be enforceable in light of this amendment to the law, the provision must be the complainant's preference, and the complainant must be given 21 days to consider the provision similar to the requirements for a knowing and voluntary waiver under the Age Discrimination in Employment Act (ADEA). If the condition of confidentiality remains the complainant's preference after the 21-day consideration period, it must be memorialized in an agreement separate from the settlement agreement and must be signed by all parties. Similar to the ADEA, upon execution of this agreement, the complainant shall have seven days to revoke it.
5. Limitations on Arbitration Clauses Relating to Sexual Harassment
   
   The budget amends Section 7515 of the CPLR and prohibits employers from including mandatory arbitration provisions to resolve sexual harassment claims in employment-related contracts entered into on or after July 11, 2018, the day in which this provision of the budget took effect.

NYC Act

While the NYC act was signed into law in May 2018, its annual training requirement only took effect on April 1, 2019. Under the NYC act, private employers with 15 or more employees must conduct annual sexual harassment training for their New York City employees who work at least 90 days and more than 80 hours in a calendar year. New hires should be provided with such training as soon as possible after commencing employment. Employers can meet the training requirement by providing their employees with the training module posted online by the New York City Commission on Human Rights or by creating their own interactive training that meets the minimum standards promulgated in the NYC act. In addition, employers must post the Stop Sexual Harassment Act Notice to employees in both English and Spanish, and distribute the NYC Commission on Human Rights' Stop Sexual Harassment fact sheet to new hires within the first week of their employment.

The NYC act also expands the scope of the New York City Human Rights Law in cases of gender-based harassment to increase the statute of limitations from one year to three years and expand protections to all employees, regardless of the size of their employer.

Conclusion

It is vital for employers to understand their obligations under the budget and NYC act so they can take the necessary steps to ensure compliance. Covered employers should review their training programs, policies, notices, and employment-related agreements to ensure compliance with the new laws. Employers also should consult legal counsel when adopting sexual harassment policies and devising sexual harassment training programs.

Wilson Sonsini Goodrich & Rosati's employment and trade secrets litigation practice is actively following developments in New York and around the country with respect to developments in laws aimed at preventing sexual harassment in the workplace. For more information, please contact Marina Tsatalis, Matt Gorman, or another member of the firm's employment and trade secrets litigation practice.