In June 2019, the New York State Legislature, embracing the #MeToo and #TimesUp movements, voted to pass Bill A08421 which Governor Cuomo, a staunch supporter, is expected to sign. In doing so, the state moved just an inch to the right of California in passing the most sweeping changes to its statutory discrimination and harassment law in more than a generation. As a result of these sea changes, the playing field has been substantially tilted in favor of the plaintiff, which, we predict, will lead to the state court system being inundated with filings at the expense of New York’s federal courts.
The new law, outlined below, triples the length of the statute of limitations for all discrimination and harassment cases from 1 year to 3; permits unlimited punitive damages, and requires a mandatory award of attorneys’ fees and costs to the prevailing party, while preventing any such claims from being sent to arbitration. Consequently, the already “entrepreneurial” plaintiff’s bar has a new potent weapon in its arsenal, which will no doubt lead to an exponential increase in settlement demands (and resulting settlements).
The substantive changes made by the new law of import to employees and employers alike, and which took effect on August 19, 2019, is summarized below:
• NYSHRL Applies to All Employers. The New York State Human Rights Law, N.Y. Exec. Law § 292 et seq. (“NYSHRL”) now applies to all private employers within New York State, and expressly prohibits harassment based on any protected characteristic, not just sexual harassment. Specifically, employers are prohibited from subjecting any individual to harassment “because of an individual’s age, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, sex, disability, predisposing genetic characteristics, familial status, marital status, domestic violence victim status, or because the individual has opposed” forbidden practices.
• Statute of Limitations Now Increased to 3 Years. The new law now triples the time given to a plaintiff to file an administrative complaint as a precursor to filing a case in court, from 1 year to 3 years.
• Faragher/Elerth Defenses Are Dead, and The Employee’s Failure to Report is No Defense At All. Under the new law, employees are not required to report internally before bringing a claim for harassment. And an employee does not need to demonstrate the existence of a “comparator.”
• The Federal High “Severe and Pervasive” Standard is Out the Window, and Replaced with the Very Low “Petty Slight/Trivial Inconvenience” Standard. The new law also expressly eliminates the long-established federal standard for pleading and proving harassment and discrimination claims in New York. Previously in New York, plaintiffs had to plead and prove that the harassment was “severe or pervasive,” a very high standard and a boon to the defense bar. That has now been watered down to requiring only that the plaintiff plead and prove any conduct that subjects an employee to “inferior terms, conditions or privileges of employment because of an individual’s membership in one or more of the[]protected categories.” In addition, an employee will have to merely show that the alleged conduct is just above a “petty slight or trivial inconvenience” to prevail.
• No Harassment or Discrimination Claim May be Subject to Mandatory Arbitration or a Non-Disclosure Agreement. In October 2018, the NYSHRL was amended to prohibit mandatory arbitration of sexual harassment claims and to prohibit the use of non- disclosure agreements, but only applied to the settlement of sexual harassment claims. The new law extends these protections to all claims of discrimination or harassment based on any protected characteristic. However, we note that there is a carve-out in the anti-arbitration provision that invites federal litigation as to its validity and enforceability. It provides that the prohibition against mandatory arbitration cannot be inconsistent with prevailing federal law (which includes the FAA). We expect that the federal courts, including the Second Circuit, will decide the matter, but those rulings are no doubt a year or 2 away at the earliest.
• Attorney’s Fees are Now Mandatory. Under the new law reasonable attorneys’ fees are now mandated to be awarded to the prevailing party for all claims for employment discrimination.
• Unlimited Punitive Damages Apply to All Discrimination Cases. Finally, the new law now allows for punitive damages in all employment discrimination actions.
The attorneys of Zumpano Patricios & Popok are ready to assist employers and employees in matters arising out of New York’s game- changing discrimination and harassment laws, including those arising out of existing employment contracts, handbooks and policies. Please contact the firm’s senior employment trial (and arbitration) strategist, Michael S. Popok at mpopok@zplaw.com to discuss your most sensitive employment law matters.