On May 30, 2018, Vermont Governor Phil Scott signed bill H.707, titled “An Act Relating to the Prevention of Sexual Harassment” (the “Act”). Effect on July 1, 2018, the Act provides expansive protections for employees and prospective employees, as well as some groundbreaking employer obligations and potential penalties for violations of the law.

Among its key provisions, the Act:

  • Applies to all persons “hired to perform work or services,” thereby covering independent contractors and unpaid interns;
  • Prohibits employers from requiring any employee or prospective employee, as a condition of employment, to sign an agreement that waives “a substantive or procedural right or remedy available to the employee with respect to a claim of sexual harassment.” In effect, this provision bans employment agreements requiring that sexual harassment claims be resolved through arbitration;[1]
  • Prohibits employment agreements that prevent or restrict an employee or prospective employee from “opposing, disclosing, reporting, or participating in an investigation of sexual harassment;”
  • Requires that all sexual harassment settlement agreements contain specific statements (discussed below) describing when a claimant-party has the right to disclose information about his or her allegations and the settlement;
  • Mandates that a sexual harassment settlement agreement may not prohibit the claimant-party from working for the employer “or any parent company, subsidiary, division, or affiliate of the employer;”
  • Directs the development of a public education and outreach program, including the establishment of a hotline and web portal for the reporting of sexual harassment complaints to the Vermont Human Rights Commission or the Attorney General’s Office;
  • Requires the Attorney General’s Office to develop a streamlined reporting system;
  • Provides the Attorney General broad powers to investigate and enforce the law, including, among other things, the authority to conduct an inspection of an employer’s records, and in certain circumstances (described below), require the employer to conduct employee training; and,
  • Directs the Office of Legislative Affairs to develop “mechanisms” for essentially voiding non-disclosure agreements in prior settlements where, in a separate, later claim, the alleged harasser is “adjudicated by a court or tribunal of competent jurisdiction to have engaged in sexual harassment or retaliation in relation to a claim of sexual harassment.”

Further, consistent with existing law, which mandates that employers must adopt an anti-harassment policy, the new Act reiterates that employers:

  • Must provide all new hires with a copy of their written policies on sexual harassment, and again distribute copies to all employees if the policies are revised; and
  • Are encouraged, but not required, to provide sexual harassment prevention training to all employees as well as supervisors and managers.

Inclusion of Required Statement in Sexual Harassment Settlements

As noted above, the Act imposes limits on the extent to which a sexual harassment settlement agreement can require confidentiality. Under the new law, employers must expressly state in such settlement agreements that the agreement does not prohibit or restrict the claimant from:

  • Testifying, assisting, or participating in an investigation of a sexual harassment claim conducted by any state or federal agency:
  • Complying with a discovery request or testifying in a proceeding concerning a claim of sexual harassment; and
  • Exercising “any right” the claimant has under State or federal labor relations laws “to engage in concerted activities with other employees for the purposes of collective bargaining or mutual aid and protection.”

The statement also must make clear that the claimant “does not waive any rights or claims that may arise after the date the settlement agreement is executed.”

The State’s Powers to Audit Employers and Enforce the Law

As stated above, the Act grants the Attorney General broad authority to conduct inspections and collect data. Specifically, the Act authorizes the Attorney General’s Office, on 48 hours’ notice to the employer, to “enter and inspect any place of business, question any person who is authorized by the employer to receive or investigate complaints of sexual harassment, and examine an employer’s records, policies, procedures, and training materials related to the prevention of sexual harassment.” This authority includes the right to examine all documents related to sexual harassment claims, including the number and details of such complaints and their resolution.

If, after inspection, the Attorney General’s Office or the Human Rights Commission determines that action is “necessary to ensure the employer’s workplace is free from sexual harassment,” either office can, among other remedies, order the employer to provide annual sexual harassment education and training for up to three years.

Finally, the previously described directive to the Office of Legislative Affairs to explore “mechanisms” which would allow the Attorney General to void non-disclosure agreements in prior settlements after a subsequent finding of sexual harassment in a separate case would be a significant development in this area of the law should it actually be developed and implemented.

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[1] Arguably, mandatory arbitration of sexual harassment claims already was banned in Vermont under another law, which bars arbitration agreements that prevent a person from “seeking or obtaining the assistance of the courts in enforcing his or her constitutional or civil rights.” It should be noted that this arbitration ban, along with others, such as the one recently enacted in New York, may be preempted by the Federal Arbitration Act. With the increase in these kinds of laws, it is likely that, at some point, there will be a court challenge to at least one of them on preemption grounds.

This post was written with assistance from Alison Gabay, a 2018 Summer Associate at Epstein Becker Green.

Featured on Employment Law This Week: Second Circuit: Title VII Covers Sexual Orientation Discrimination.

“Legal doctrine evolves.” Those words from the Second Circuit spoke volumes as the court ruled that Title VII of the Civil Rights Act prohibits sexual orientation discrimination, overturning their own long-standing precedent. The court ruled in favor of a skydiving instructor who claimed he was fired for telling a client he was gay.

The majority opinion began by looking at whether sex is a motivating factor in the alleged unlawful practice. And, in this case, looking at sexual orientation discrimination, the court concluded that sex is a factor and inextricably linked to sexual orientation, and therefore sexual orientation acts as a proxy for sex. The Second Circuit now joins the Seventh Circuit in finding that Title VII does protect against sexual orientation discrimination, and deepens a circuit split with the Eleventh Circuit, which went the other way last year.

Watch the segment below and read our recent post.

Ever since the National Labor Relations Board (“NLRB”) issued its August 2015 decision in Browning-Ferris Industries of California, Inc., holding two entities may be joint employers if one exercises either direct or indirect control over the terms and conditions of the other’s employees or reserves the right to do so, the concept of joint employment has generated increased interest from plaintiffs’ attorneys, and increased concern from employers. Questions raised by the New York Court of Appeals in a recent oral argument, however, indicate that employers who engage another company’s workers on an independent contractor basis would be wise to guard against another potential form of liability, for aiding and abetting acts that violate various anti-discrimination statutes, including both the New York State (“NYSHRL”) and New York City Human Rights Laws (“NYCHRL”) and the New Jersey Law Against Discrimination (“NJLAD”).

On March 28, 2017, the New York Court of Appeals heard oral arguments in Griffin v. Sirva, Inc., to answer three questions that had been certified by the U.S. Court of Appeals for the Second Circuit: (1) does the NYSHRL’s prohibition of employment discrimination based on workers’ criminal records limit liability to an aggrieved party’s “employer”; (2) if so, is the scope of the term “employer” limited to a worker’s direct employer, or does it include other entities who exercise a significant level of control over the direct employer’s discrimination policies and practices; and (3) does the portion of the NYSHRL that prohibits aiding and abetting the discriminatory acts of another apply to a non-New York entity that requires its New York agent to discriminate in employment based on a worker’s criminal history.

Griffin illustrates a concern faced by employers in a variety of industries, who subcontract certain types of work to employees of a separate business entity on an independent contractor basis. Among other tasks, companies may engage contractors to provide cleaning services, security, delivery of goods, installation of purchases or, as in Griffin, packing and moving services.  Such subcontracted services may be performed in a variety of settings, ranging from the company’s premises to its customers’ homes.  With increasing concerns regarding workplace violence, companies often choose to conduct their own criminal background checks on these contract workers, either personally or through an outside vendor, in an attempt to protect the company’s employees, customers, and property. This concern is particularly heightened when, as in Griffin, the contract workers in question will be performing services in the homes of a company’s customers.

In these types of scenarios, a question often arises regarding whether the company that engaged the contractors can be liable for violating state or city laws prohibiting discrimination based on criminal convictions, by virtue of requiring the background check, even though that company was not the workers’ direct employer. In resolving this question, courts typically rely on the concept of joint employment, analyzing the extent to which the company is involved in the hiring or firing of the contractors, or in exerting control over their working conditions. Presumably anticipating this sort of analysis, the parties in Griffin (including the State of New York, which filed an amicus curiae brief and was permitted to participate in oral argument) focused their briefing and arguments on whether a company that performs background checks on its contract workers should be deemed an employer under the NYSHRL.  Through its questions at oral argument, however, the court appeared to indicate that there may be a simpler resolution in this type of case, which does not require addressing the complex question of whether the company requiring the background checks is the workers’ employer or joint employer.

In addition to directly prohibiting discrimination based on criminal history, the NYSHRL states that it is “an unlawful discriminatory practice for any person to aid, abet, incite, compel or coerce the doing of any of the acts forbidden under [the NYSHRL], or to attempt to do so.” “Person” is defined as including “one or more individuals, partnerships, associations, corporations, legal representatives, trustees, trustees in bankruptcy, or receivers.” Based on this expansive language, several judges seemed to indicate that the NYSHRL’s “aiding and abetting” provision was sufficiently broad to encompass third parties who conduct background checks on contractors, regardless of whether such entities would otherwise be considered the contract workers’ employer or joint employer.  Assuming the “aiding and abetting” provision covers such conduct, multiple judges noted that imposing liability under that provision would be simpler than wrestling with the joint employment issue.  Further, the judges expressed concern that expanding liability under the main section of the NYSHRL to non-employers would render the “aiding and abetting” provision superfluous.

While it is premature to predict how the Court of Appeals may ultimately rule in Griffin, particularly given the recent unexpected death of one of the court’s seven members, Judge Sheila Abdus-Salaam, companies who engage workers on an independent contractor basis should be aware that potential joint employment issues may not be their only concern with regard to such workers. Regardless of whether a company exerts sufficient control over its contract workers to be deemed a joint employer, if the company operates in a jurisdiction whose anti-discrimination laws allow for “aiding and abetting” liability, that provision may serve as an alternative basis of potential liability for a company that conducts criminal background checks on contract workers engaged through a separate business entity.  Specifically, because the NYSHRL, NYCHRL, and NJLAD each include broad provisions that prohibit any person or entity from aiding, abetting, inciting, compelling, or coercing any acts that violate those laws, businesses that operate in New York State, New York City, or New Jersey should ensure that any background check requirement imposed on another entity’s workers complies with all applicable “ban-the-box” and anti-discrimination laws (e.g., NY State Correction Law Article 23-A, the NYC Fair Chance Act, and the NJ Opportunity to Compete Act), in order to avoid potential liability under the applicable “aiding and abetting” provisions in those jurisdictions.

Our colleagues Brian W. Steinbach and Judah L. Rosenblatt, at Epstein Becker Green, have a post on the Heath Employment and Labor blog that will be of interest to many of our readers in the retail industry: “Mayor Signs District of Columbia Ban on Most Employment Credit Inquiries.”

Following is an excerpt:

On February 15, 2017, Mayor Muriel Bowser signed the “Fair Credit in Employment Amendment Act of 2016” (“Act”) (D.C. Act A21-0673) previously passed by the D.C. Council. The Act amends the Human Rights Act of 1977 to add “credit information” as a trait protected from discrimination and makes it a discriminatory practice for most employers to directly or indirectly require, request, suggest, or cause an employee (prospective or current) to submit credit information, or use, accept, refer to, or inquire into an employee’s credit information. …

Read the full post here.

The New York City’s Human Rights law (“NYCHRL”) prohibits employment discrimination against specified protected classes of employees and applicants including:

Employers Should Care About This: New York City’s Amendment on Caregiver Discrimination race, color, creed, age, national origin, alienage or citizenship status, gender, sexual orientation, disability, marital status, partnership status, any lawful source of income, status as a victim of domestic violence or status as a victim of sex offenses or stalking, whether children are, may be or would be residing with a person or conviction or arrest record.

If this list wasn’t long enough, on May 4, 2016, NYCHRL will add “caregivers” to the protected classes including, anyone who provides ongoing medical  or “daily living” care for a minor, any disabled relative or disabled non-relative who lives in the caregiver’s household.

The law defines “caregiver” as a person who provides direct and ongoing care for a minor child or a person with a disability who: (1) is a covered relative, or a person who resides in the caregiver’s household; and (2) relies on the caregiver for medical care or to meet the needs of daily living.

“Covered relatives” include children (adopted, biological or foster), spouses, domestic partners, parents, siblings, grandchildren, grandparents, children or parents of the caregiver’s spouse or domestic partner, or any individuals in a “familial relationship” with the caregiver.

The NYCHRL prohibits employers from discriminating against caregivers with respect to hiring, compensation, or the terms and conditions of employment. Thus, employers should not ask applicants about their status as a caregiver when making hiring decisions.

Importantly, employers may still (and should!) hold caregiver employees to the same attendance and performance standards as other employees.  Caregivers must still be able to perform the essential functions of their job, notwithstanding their role as a caregiver.

The law does not contain an affirmative requirement to accommodate caregivers, but employers should carefully consider any employee’s requests for time off due to caregiving responsibilities to ensure responses to such requests are being applied consistently and in accordance with any other potentially applicable laws. For example, caregiver employees may be eligible to take sick time under the New York City Earned Sick Time Act to fulfill caregiver duties for medical needs. In addition caregivers caring for medical needs may be entitled to Family and Medical Leave Act benefits.  Employers must also think about how their policies and practices affect caregivers and train managers on the new protections.

The New York Human Rights Commission has not yet issued formal guidance regarding this amendment. Until the Commission does so, the potential reach of the law remains unknown.  But employers should brace themselves for broad interpretations of this law and stay tuned to this blog for updates.