One of the outcomes of the #MeToo movement is that state legislatures are revisiting the use of arbitration agreements, confidential settlement agreements, and jury waivers, as well as the scope of anti-discrimination and anti-harassment laws, in the employment setting. Most recently, on March 12, 2018, the New York State Senate passed a bill (Senate Bill S7848A) which includes a ban on confidential settlements and mandatory arbitration clauses of sexual harassment claims. This bill is now headed for the Assembly, and if passed (which appears likely) it will make its way to the desk of Governor Andrew M. Cuomo, who is likely to sign it in some form.
If enacted, Senate Bill S7848A would have a significant impact on New York State employers, especially in the public sector. The legislation applies to the state, counties, cities, towns, villages, school districts, and political subdivisions, as well as private entities that contract with the state. One of the highlights of the legislation is the prohibition on the use of confidential settlement agreements for sexual harassment lawsuits, absent court approval. Also, the bill amends New York Public Officers Law and would prohibit the use of taxpayer dollars to fund settlements or judgments for sexual harassment claims. Additionally, the bill provides for a prohibition of the use of mandatory arbitration of sexual harassment claims. The legislation discusses the development of model sexual harassment policies and training by the NYS Department of Labor for both private and public employers. The bill also seeks to broaden the scope of protection of non-employees such as contractors and vendors under the New York State Human Rights Law to assert claims for sexual harassment. Finally, the bill would also require private contractors with New York State and its agencies to provide two hours of annual sexual harassment training to their employees and certify to the state on an annual basis that they has done so and that they have a widely disseminated sexual harassment policy.
Across the river, the New Jersey Legislature is contemplating a similar bill, which is even more comprehensive. Senate Bill S3581 goes one step further, banning jury waivers, arbitration clauses, and non-disclosure provisions of all claims asserted under the New Jersey Law Against Discrimination (pre-suit or in litigation). Further, this bill would prohibit “any employment contract or agreement which has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment” as unenforceable and against public policy. Unlike other states, New Jersey’s proposed bill expands these protections beyond claims of sexual harassment. There are limited exceptions under collective bargaining agreements. Likewise, this legislation, if passed, would significantly alter the employment litigation landscape for New Jersey employers.
It is more imperative than ever that employers review their anti-harassment policies and workplace training on discrimination and harassment laws. Counsel should evaluate all settlement and arbitration agreements. Companies should stay apprised of legal developments at the municipal, state, and local levels on this issue, as more states are likely to propose and potentially pass similar legislation.
Our team of skilled practitioners stands at the ready to assist businesses with drafting and revision of critical policies and agreements, as well as to provide training and assessment of practices for handling (and avoiding) allegations of harassment and discrimination in the workplace. For more information, contact: