New York State employers must adopt more stringent anti-sexual harassment policies and procedures under amendments to existing state laws embedded in the state budget signed into law by Governor Andrew Cuomo on April 12, 2018. These amendments become effective over the next year and include provisions that will

• prohibit certain confidentiality terms in settlements of sexual harassment claims unless the complainant requests confidentiality;

• prohibit mandatory arbitration of sexual harassment complaints;

• protect non-employees from sexual harassment in the workplace; and

• require uniform sexual harassment policies and annual anti-harassment training for employees.

Further changes include (a) additional requirements imposed on contractors bidding on state projects and (b) a new right for public employers to recover a public employee’s proportionate share of a judgment for sexual harassment paid to a prevailing plaintiff.

New York City employers will also need to comply with additional requirements soon as Mayor Bill de Blasio is expected to sign into law 11 bills collectively entitled the Stop Sexual Harassment in NYC Act, passed by the City Council on April 11, 2018. For now, New York State employers should prepare for the changes outlined below.

Non-employee Protections: Effective immediately, employers must afford sexual harassment protections to contractors, subcontractors, vendors, consultants or other persons providing services in the employer’s workplace pursuant to a contract. Liability for sexual harassment claims made by such non-employees may be imposed if the employer, or its agents or supervisors knew, or should have known, that a non-employee was being sexually harassed in the employer’s workplace and failed to take remedial action.

Bar on Mandatory Arbitration: For written contracts entered into on or after July 11, 2018, New York employers will be prohibited from imposing mandatory arbitration of sexual harassment complaints. This change exempts collective bargaining agreements and does not affect mandatory arbitration outside of sexual harassment claims. Furthermore, in an apparent acknowledgment that there will be preemption arguments based on the Federal Arbitration Act, the legislation noted that this prohibition of mandatory arbitration of harassment claims will not apply “where inconsistent with federal law.” It remains to be seen how any such preemption challenges will fare in court.

Non-disclosure Clauses: Starting July 11, 2018, certain confidentiality agreements or nondisclosure clauses related to the settlement or resolution of sexual harassment complaints will be barred unless requested by the complainant. Specifically, the new legislation prohibits employers from including clauses that seek to prevent “the disclosure of the underlying facts and circumstances of the claim or action” within settlements of sexual harassment claims. However, a confidentiality provision requested by the complainant is permissible if that provision is provided to all parties, and the complainant has had 21 days to consider the terms and is given a seven-day revocation period after signing. This 21/7-day mechanism will be familiar to employers since it mirrors the review and revocation provisions for waivers of federal age discrimination claims, as set forth in the federal Older Workers Benefit Protection Act.

Mandatory Training: Effective October 9, 2018, New York employers must adopt and distribute written policies prohibiting sexual harassment and hold annual sexual harassment prevention training for all employees. The New York State Department of Labor and New York State Division of Human Rights will develop model policies and training programs for employers to use. Employers wishing to develop their own policies and programs must adopt ones equivalent to or exceeding the minimum standards set by the agency models.

Certification Requirement for State Contractors: Beginning January 1, 2019, every bid submitted to New York State or any public department or agency that requires competitive bidding must include a certification stating that the bidder implemented the written sexual harassment policy and annual training requirements discussed above. The state, public department or agency may also impose the certification requirement at its discretion in the absence of required competitive bidding. The certification must be signed under penalty of perjury, and bids that do not contain this certification will not be considered absent good reason provided via a signed statement.

Recovery from Liable Public Employees: Effective immediately, public employers may recover a public employee’s proportionate share of a monetary judgment for sexual harassment paid to a prevailing plaintiff. Public employees found personally liable for sexual harassment must reimburse their public employer within 90 days of the employer’s payment of a judgment. If the public employee fails to pay the required reimbursement, the public employer may obtain a judgment to garnish the employee’s wages.

Next Steps for New York Employers

Given these significant changes in the legal landscape created by these new legislative initiatives, employers with employees in New York State should begin implementing these new requirements by (i) creating reporting procedures for non-employees to report sexual harassment; (ii) training managers to monitor whether non-employees are facing sexual harassment in the workplace; (iii) making changes to employment agreements containing mandatory arbitration clauses insofar as sexual harassment claims are concerned; and (iv) reviewing and possibly modifying confidentiality provisions in their form settlement agreements. Moreover, New York employers should also revise their harassment prevention policies once the minimum guidelines have been set and then schedule sexual harassment prevention training for all employees on an annual basis.