Bill Banning Confidential Settlements and Mandatory Arbitration for Sexual Harassment Claims Passes New York Senate
On March 12, 2018, the New York State Senate passed S-7848A, a bill that, if enacted, would significantly change the legislative landscape for sexual harassment claims in the state. Most notably, S-7848A would: (i) prohibit mandatory arbitration agreements for sexual harassment complaints; (ii) ban confidential sexual harassment settlements unless the confidentiality provision is separately considered and consented to by the complainant; (iii) create a statutory definition of “sexual harassment”; and (iv) expand state-law protections against sexual harassment to independent contractors.
S-7848A sets forth a new, statutory definition for “sexual harassment,” which has previously only been defined in the state by courts. Specifically, S-7848A defines “sexual harassment” as:
[U]nwelcome sexual advances, requests for sexual favors, or other verbal or physical conduct of a sexual nature if such conduct is made either explicitly or implicitly a term or condition of employment, or submission to or rejection of such conduct is used as the basis for employment decisions affecting an individual’s employment, or such conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile or offensive work environment, even if the complaining individual is not the intended target of sexual harassment.
S-7848A expressly prohibits employers from requiring employees to submit claims arising out of alleged sexual harassment to arbitration, instead requiring that such claims be heard in court. The bill would also block New York courts from accepting settlement agreements between employers and employees that prevent a settling employee from disclosing the factual information relating to the alleged sexual harassment. However, S-7848A does allow courts to accept confidentiality provisions in a sexual harassment settlement where: (i) the complainant is provided 21 days to consider the confidentiality provision and separately consents to it; and (ii) the court has considered the “potential impact on the public” of the confidentiality provision and determined that the complainant’s consent was not the result of “intimidation, coercion, retaliation or threats.”
Under current New York law, only employees are permitted to pursue state-law sexual harassment claims against their employers. S-7848A, however, would expand this right of action to independent contractors.
While S-7848A still requires approval from the New York Assembly and governor, its passage would significantly impact employer liability and exposure to sexual harassment claims in the future. We will continue to monitor S-7848A, and will provide additional information as it becomes available.
*Richard Sui contributed to this article