Numerous states over the past few months have passed laws, or have legislation in the works, that seek to prevent sexual harassment in the workplace, and that means stringent new compliance obligations for companies.
Among the many mandates states are starting to impose include the specific requirement that companies have in place a sexual harassment prevention policy and training program. Some states are now also prohibiting companies from requiring nondisclosure agreements concerning sexual harassment as a condition for employment; requiring new disclosure requirements for sexual-harassment related settlements; and expanding the scope of protected employees to include non-employees, such as independent contractors and interns.
Among the states that have enacted, or are currently working to pass, some form of sexual harassment legislation are New York, California, Connecticut, Maryland, Delaware, Colorado, Arizona, Tennessee, Vermont, and Washington.
New York and California are among those with the strongest and most stringent proposed sexual harassment laws in the nation. “If you’re following New York or California, you’re doing as much or more than you need to be doing in almost every state,” says Joshua Zuckerberg, a partner at law firm Pryor Cashman.
For example, effective Oct. 9, any company with operations in New York—regardless of size—must adopt a sexual harassment prevention policy and implement a training program, following required minimum standards.
“It’s a big deal. This is not just an incremental, technical change in the law,” Zuckerberg says. “This is going to be a seismic shift for all employers of any size in New York State.” It’s going to require all companies located in New York to do more and spend more on sexual harassment compliance, training, and internal investigations, all while likely increasing liability and litigation in this area, he says.
To ensure that companies create a workplace free of sexual harassment, both New York and California have implemented minimum requirements in the form of information materials, which companies are encouraged to reproduce and distribute to their employees.
If they choose not to distribute the materials provided, New York and California employers must, at a minimum, include the following components in their sexual harassment policy:
Language addressing the illegality of sexual harassment, and how it is defined by federal, state, and (where applicable) local law;
Examples of prohibited conduct that would constitute unlawful sexual harassment;
Internal, as well as external, avenues for reporting sexual harassment; and
A description of legal protections and external remedies informing victims of their rights of redress.
Large, multinational companies with mature ethics and compliance programs may find that they already have many of these provisions in place. The difference is that “now it’s the state dictating in fairly specific terms what your policy should look like,” Zuckerberg says.
New York law requires that employers include in their sexual harassment policy a complaint form for employees to report alleged incidents of sexual harassment. Employers are encouraged to download the model complaint form provided and share it with their employees. If an individual orally makes a complaint, employers should encourage the individual to complete the complaint form in writing or prepare a complaint form based on that oral report.
Companies in New York must also take steps to preserve documents, e-mails, or phone records relevant to the allegations, and interview all parties involved, including any relevant witnesses. They are also expected to create a written documentation of the investigation (such as a letter, memo or e-mail.
Investigations of any complaint should be completed within 30 days. “It makes it that much more serious, and that much more urgent,” Zuckerberg says. “Companies can’t put allegations off. They have to make sure they do a thorough investigation, promptly,” he says. They must also promptly notify the individual who raised the complaint of the final determination and inform them of their right to file an external complaint or charge.
New York laws also places a significant amount of emphasis on the responsibilities of managers and supervisors. “Managers and supervisors are requiredto report any complaint that they receive, or any harassment that they observe to [person or office designated],” the draft sexual harassment policy states. The draft policy further states that, “employees of every level who engage in sexual harassment, including managers and supervisors who engage in sexual harassment or who knowingly allow such behavior to continue, will be penalized for such misconduct.”
Furthermore, an increasing number of states—like New York and Vermont—expand the scope of sexual harassment protections to include employees andnon-employees alike, includinginterns (paid or unpaid) contractors, subcontractors, vendors, consultants, or anyone else providing work or services for the company. For many years, companies have relied on the notion that employment laws applied only to employees. “Now, the state is making it clear that anti-harassment laws apply to anybody who provides services to the employer,” Zuckerberg says.
For New York employers, the State’s model sexual-harassment policy further clarifies that “unlawful sexual harassment is not limited to the physical workplace itself. It can occur while employees are traveling for business or at employer sponsored events or parties. Calls, texts, emails, and social media usage by employees can constitute unlawful workplace harassment, even if they occur away from the workplace premises or not during work hours.”
Concurrently, the New York City Commission on Human Rights has released an anti-sexual harassment poster in English and Spanish, both of which all NYC employers must display in a conspicuous location, “in employee breakrooms or other common areas employees gather,” effective immediately. The Commission also released an informational fact sheet that all NYC employers must distribute to new employees at the time of hire. Thus, companies with locations in New York must ensure they satisfy both city and state law requirements.
The requirements that will have the most direct and immediate impact from a compliance standpoint are the training obligations. New York, California, and Delaware are among a few states that now legislate sexual harassment training.
New York employers, for example, must provide all of their employees with sexual harassment prevention training by Jan. 1, 2019, which means companies must be on “a pretty focused rush to get that done,” Zuckerberg says. Thereafter, they must provide training to all new employees within 30 days after their hiring and, again, to all employees each calendar year. Even temporary and part-time employees must receive training, even if they work for the company for just one day.
Compliance officers are encouraged to use the model training materials available to them. “Employers should provide employees with training in the language that is spoken by their employees,” according to the draft policy.
Additionally, the training must be “interactive.” This means it must be web-based with questions asked of employees as part of the program; accommodate questions asked by employees; include a live trainer available during the session to answer questions; and/or require feedback from employees about the training and the materials presented.
“Sophisticated employers have been doing training of this nature for many years,” says Robert Whitman, a partner in the Labor and Employment Department at law firm Seyfarth Shaw. Not all follow the letter of the law, however. Thus, it’s important that compliance officers revisit their training to ensure it complies with the laws of that state.
The deadline to submit comments on the model policy, complaint form, and training materials was Sept. 12. “The state has received hundreds of very constructive and substantive comments from a wide range of individuals, advocates, industries, worker groups, businesses and business organizations,” the government’s website states. “The comments are being reviewed and necessary revisions being considered, with finalized documents expected to be released in the near future.”
Under California’s pending legislation, employers with five or more employees must provide, by Jan. 1, 2020, “at least two hours of classroom or other effective interactive training and education regarding sexual harassment to all supervisory employees, and at least one hour of classroom or other effective interactive training and education regarding sexual harassment to all nonsupervisory employees in California within six months of their assumption of a position.”
Delaware is another state that recently passed a similar law, requiring that companies with 50 or more employees in the state provide sexual harassment training to employees and supervisory employees every two years. The law takes effect on Jan. 1. 2019.
Mandatory arbitration clauses
Several states—New York, California, Vermont, Washington, and Maryland—have also passed legislation banning the use of mandatory arbitration clauses, effectively prohibiting companies from requiring that claims of sexual harassment be resolved through arbitration. Compliance officers and in-house counsel will want to assess whether arbitration provisions comply with the new requirements, or whether changes are required on a going-forward basis.
“That has the potential to increase the likelihood of litigation in this area, because a lot of times plaintiffs don’t want to have to arbitrate these claims. They’d rather be in court,” Zuckerberg says. “The fact that this legislation seeks to open the courtroom door on these types of claims is significant.”
That doesn’t mean those cases will be successful. “The difficulty that those provisions will face as a legal matter is that they are almost certainly preempted by federal law, which favors arbitration in general,” Whitman says. In fact, many federal court cases have struck down state laws that seek to limit the enforceability of arbitration agreements.
Each state’s sexual harassment requirements are quite explicit about what they require of companies, but each also has its own specific requirements. Compliance officers and in-house counsel will want to review each state’s individual sexual harassment laws, where necessary, to determine whether they will need to revise on a going-forward basis their sexual harassment policy, training, disclosure obligations, investigation protocols, and arbitration clauses accordingly.