News Flash: Dramatic New Duties for Employers Related to Sexual Harassment: New Requirements under Federal, NY State, and NY City Laws

Arent Fox will continue to monitor the status of all upcoming guidance materials and will keep clients appraised of any new developments. In the meantime, we have prepared an overview of the key changes applicable to for-profit and not-for-profit employers over the next year, as well as the tricky questions that the new requirements have yet to answer.

Federal: Tax Deductions: Effective Dec. 22, 2017, employers are no longer able to deduct as business expenses any settlement amounts related to sexual harassment if such settlement is subject to a non-disclosure agreements, nor deduct any attorneys’ fees “related to” such settlement or payment.

Open Question: It is unclear whether the law refers only to defense counsel’s fees, or is also intended to encompass the complainant’s attorneys’ fees.

New York State – For ALL Employers, Regardless of Number of Employees

1. Sexual Harassment of Non-Employees (e.g. vendors): Effective April 1, 2018, employees are prohibited from sexually harassing non-employees, such as vendors, delivery people, or outside consultants. 
2. Settlements Related to Sexual-Harassment Allegations:
   1. Effective June 30, 2018, employers may not “include or agree to include” non-disclosure agreements unless such a provision is the “complainant’s preference.”
      
      Open Question: It is unclear whether an employer’s proposal to include a non-disclosure agreement is a per-se violation of the law. It is also unclear how courts will interpret whether the provision was the complainant’s “preference,” beyond the usual analysis of examining whether the complainant agreed to the provision of his/her own free will.
       
   2. Complainants must have 21 days to consider the provision, and 7 days after execution to revoke their acceptance.
   3. Employers are also prohibited from including mandatory arbitration clauses in any employment contract, except where permitted by federal law. For example, if the Federal Arbitration Agreement applies, claims may ultimately be arbitrable.
3. Anti-Sexual Harassment Policies: Effective Sept. 28, 2018, all sexual harassment policies must include a standard complaint form, in addition to a handful of other requirements that will be further delineated by the NY State Department of Labor and NY State Division of Human Rights.
   
   Open Question: While it is anticipated that the requirements will be set out before the effective date, it is not clear by when employers must have the policy in place to be in compliance.
    
4. Anti-Sexual Harassment Trainings: Effective Sept. 28, 2018, all employers (including those with fewer than 15 employees) must establish annual, interactive anti-sexual harassment trainings for all employees (not just supervisors or managers). The trainings must incorporate a list of requirements to be published by the DOL and DHR.
5. Reporting Sexual Harassment in Bids: Effective Jan. 1, 2019, where competitive bids for government contracting are required by law, each bid must include the following statement: “By submission of this bid, each  bidder  and  each  person  signing  on behalf  of  any  bidder  certifies,  and in the case of a joint bid each party thereto certifies as to its own  organization,  under  penalty  of perjury,  that  the  bidder  has  and  has  implemented a written policy addressing sexual harassment prevention in the  workplace  and  provides annual  sexual  harassment  prevention training to all of its employees.” The law further provides that, in situations where competitive bids are permitted, but not required, the employer may choose whether to include this statement.
   
   Open Question: It is not clear whether trainings must have taken place by September 28, or if it simply means that the first annual training must take place before September 28, 2019. We anticipate further clarification from the DOL in the coming months. The State law also does not specify if the training must be in person, or if an online interactive training could satisfy the law’s requirements.

New York City

1. Definition of “Employer”: Effective April 11, 2018, employers with fewer than 4 employees may be sued for “gender-based harassment.” Previously, only employers with at least 4 employees could be sued for that reason.
2. Anti-Sexual Harassment Trainings: Effective April 1, 2019, employers with at least 15 employees (including interns) must provide annual, interactive anti-harassment trainings for all employees (including interns), after the employee has worked with that employer for at least 90 days.
   
   Open Question: As of now, the trainings for NYC employers may be either online or in-person, as long as they remain interactive. However, if the DOL and DHR require all NY State employers to provide in-person trainings, NYC employers will still need to satisfy NY State requirements.
    
3. Anti-Sexual Harassment Posters: Effective Aug. 9, 2018, all employers will need to display anti-sexual harassment rights and responsibilities posters in common areas, in both English and Spanish. The City will design and make these posters available in the coming months.
   
   Open Question: It is unclear whether August 9 is the date by which the City must design and publish the posters, or the date by which employers must print and display the posters (assuming the posters are available before August 9).

 
Given the above, it is clear that effective anti-harassment trainings are more important than ever for employers. It is no long sufficient for employers simply to conduct trainings to avoid legal exposure. Rather, it is crucial that these trainings have an impact on actually reducing and eliminating exposure to claims of workplace sexual harassment.
 
Arent Fox has developed anti-harassment policies and customized, stimulating trainings for both managers and staff that utilize vignettes and attendee engagement to highlight recognizing, addressing, and preventing workplace sexual harassment.