Diane M. Perri Roberts wrote a guest column that appeared in the April 23 issue of the Buffalo Law Journal. In “Sexual harassment law – a changing landscape,” Ms. Perri Roberts explains New York State’s new laws instituting changes regarding sexual harassment policies in the workplace.
The full article is available on the Buffalo Law Journal website.
Arbitration
The new laws, which will start to be phased in on July 11, will prohibit the use of mandatory, binding arbitration for alleged unlawful discriminatory practice based on sexual harassment. Additionally, unless the complainant specifies otherwise, nondisclosure agreements are also prohibited in sexual harassment settlement agreements. Ms. Perri Roberts also pointed out that, when considering these new laws, it is important to recall the changes to the federal tax code, enacted in December of 2017, which restrict an employer’s ability to deduct settlement payments to claimants asserting sexual harassment claims and legal costs associated with them.
The new provision prohibits mandatory, binding arbitration agreements. The provision does not, however, make mention of arbitration agreements that do allow awards to be reviewed by an independent court. There is also an exception that could allow a mandatory arbitration provision if both parties agree to it. The language of this provision could be invalidated if the FAA challenges it in court unless Congress modifies the FAA to track the sexual harassment laws passed in a number of states.
Nondisclosure
According to the new laws, Ms. Perri Roberts says, sexual harassment complainants can now make their preference the determining factor on whether a settlement agreement or other resolution of a sexual harassment claim will contain terms and conditions preventing disclosure of the claim’s circumstances and details. The complainant has 21 days to consider these terms and conditions before agreeing and an additional seven days after signing a written agreement to revoke that permission. The law does not prohibit employers from seeking to include these provisions, but the decision on their ultimate inclusion rests with the complainant.
Tax deductions
In the article, Ms. Perri Roberts explains that it is still unclear whether employers can make a tax deduction if the complainant prefers nondisclosure. The new tax code also requires that amounts associated with a sexual harassment claim be separated from claims of a different nature in order to distinguish various settlement payments. If this does not happen, employers may not be able to deduct any of the settlement payment. Employers may also be unable to deduct legal fees associated with arbitration proceedings leading to a settlement under new federal tax code provisions.
Future policies
The New York State Department of Labor and Division of Human Rights are developing a model sexual harassment prevention policy and training program, as all employers will be required to have these programs in place later in the year. Check back for the next installment of this series, which will detail the specifics of what those programs and policies should include once that information becomes available.
About Diane M. Perri Roberts
Diane M. Perri Roberts focuses her practice in the areas of Employment and Commercial Litigation. She represents businesses in various matters in federal and state court as well as in mediations and arbitrations. Ms. Perri Roberts also defends employers before the EEOC, the NYS Division of Human Rights, and OSHA. She has been recognized in Super Lawyers and Legal Elite of WNY.
