What Business Owners Must Do to Ensure Your Non-Compete is Enforceable in New York

As a business owner, it is likely you have spent a number of years creating, developing, and fostering a formula to make your business highly competitive.  After expending such efforts to give your business its competitive edge, you want to protect your company’s from the threat of a former employee using stolen business methods to start their own business or to bring your company’s proprietary information to one of your competitors.  Many employers will have employees sign a non-compete agreement before they can start working in order to protect the company’s trade secrets and proprietary information.  However, there are many common mistakes made when drafting non-compete agreements that will render the contract unenforceable.

If a former employee brings a legal action seeking to void a non-compete agreement or if an employer seeks to enforce the agreement after learning the former employee violated it, a court will evaluate the non-compete agreement by taking into consideration the following factors:

  • Is there a legitimate interest the employer is trying to protect with the non-compete agreement?
  • Does the non-compete agreement include a geographic restriction? What is the scope of the geographic restriction?
  • Does the non-compete agreement include a temporal restriction stating how long the agreement will last?
  • Does the non-compete agreement preclude the employee from performing a different type or scope of work from what they were hired to do by the employer?
  • Does the employer provide any consideration, such as additional benefits or compensation, in return for having the employee sign the non-compete agreement?
  • Was the employee terminated without cause or did the employee voluntarily resign?

Business owners must understand that New York maintains a strong public policy that individuals have the right to pursue livelihood and work.  A non-compete agreement will not be enforced if the only purpose is to simply restrict competition.  A company’s non-compete agreement must further the employer’s legitimate goal, such as protecting customer lists or other specified confidential knowledge the employee gained only while working for the business that would inevitably be used to benefit a competitor.

Under New York law, a non-compete agreement will only be enforced if: (1) the scope of the agreement is no greater than is required to protect the employer’s legitimate interest; (2) the agreement does not impose an undue hardship on the employee; and (3) the agreement is not injurious to the public.  Courts will weigh the factors stated above when determining whether a non-compete agreement is enforceable.

There are a variety of reasons why a court would render a non-compete agreement unenforceable.  One common reason non-compete agreements are found unenforceable arises when the agreement causes undue hardship to the employee because it lacks a reasonable geographic and temporal scope in relation to the information the employer is trying to protect.  A non-compete agreement will likely be enforced to the extent it is necessary to prevent an employee’s disclosure or solicitation of trade secrets, to prevent an employee’s use of the employer’s confidential customer information, or where the services performed by the employee were deemed unique or special to the employer.

For example, it is unlikely a non-compete agreement would be enforceable where it includes a broad geographic restriction spanning an entire state, if the duration of the restriction is to last more than one or two months.  This restriction would cause the employee an undue hardship because it would essentially cause the employee to move to another state in order to find a job.  It is also unlikely a court would hold an agreement to be enforceable where the geographic restriction prevents the employee from working in a region where the employer does not conduct business.  If the employer does not do business in the region where the employee is restricted from working, the agreement does not seek to protect the employer’s interest.

Reasonable restrictions may be enforceable when the employer is clearly trying to restrict the employee from using trade secrets, proprietary information, or specialized information to which the employee was only exposed to because of their employment, and that is not generally known in the industry.  In addition, the geographic and time restraints must be reasonable in relation to the information sought to be protected.  Reasonable geographic and time restrictions will depend on the industry of the company and existing state precedent.  In New York, reasonable time restrictions have been found to range from six months to two years.  A reasonable geographical restraint will generally be enforced on a case-by-case basis, and requires the court to consider the length of the temporal restriction and the activities the employee is restricted from performing.

It is also important whether the employee voluntarily resigned or was terminated without cause.  When an employee’s employment is terminated without cause due to downsizing or operational restructuring, the employee should not be restrained from seeking new employment, as that squarely violates New York’s public policy.  An essential trait of a non-compete agreement is that the employee has the choice to leave their job when the employer is still willing to continue to employ the employee.

Not all non-compete agreements will be deemed unenforceable when the court finds a defect relating to a geographic or time restriction.  In many instances, courts may “blue pencil” the agreement to limit the geographical area, decrease the duration of the agreement, and reduce the scope of the employee’s restricted activity in order to make the agreement enforceable.  However, courts are not required to blue pencil an overly-broad agreement.  Hence, the agreement may include a “blue pencil clause.”  This clause would state the parties intend that the agreement will be enforced to the maximum extent permitted by law, and that should a reviewing court find the agreement is overbroad, the court may blue pencil the clause to make the agreement enforceable.

One exception to the requirement that a non-compete agreement must be reasonable is when the employee chooses not to compete and in return, receives certain contractual benefits, including deferred compensation and benefits.  However, when the employee is terminated without cause, the employer has already made the decision for the employee and any non-compete agreement the employer tries to enforce will likely be found to be unreasonable.

Employers should thoroughly review their non-compete agreements to ensure that they are reasonable in duration, geographic scope, and aim to reasonably protect the employer’s legitimate interest.

PMP is available to review or create your non-compete agreements.

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‘Trans-form’ Your Workplace to be More Inclusive of Transgender and Non-Conforming Employees

Although employers don’t intentionally create a hostile work environment for transgender and non-conforming (TGNC) employees, often the outcome is a hostile work environment due to a lack of understanding and education.  Many TGNC employees experience unnecessary barriers that make working harder than it needs to be on a daily basis.  When it comes to any marginalized group such as TGNC employees, true inclusion does not arise from creating a more diverse workplace; it’s about ensuring the organization treats all employees equitably when it comes to employees everyday work experiences.  Here are 9 simple ways to make your workplace more inclusive of TGNC employees.

  1. Don’t make TGNC employees educate you. Whether you’re a manager, supervisor or co-worker, you must understand that it is not the responsibility of a visibly TGNC employee to answer your questions about all things TGNC despite the fact that you have good intentions behind your curiosity. It is important to respect all employees’ privacy.  If your organization is looking to become more TGNC-inclusive, consider hiring a TGNC person as a diversity consultant.  Other ways to educate yourself and your employees is to build TGNC examples into sexual harassment or respectful workplace training.  Including TGNC examples in how your company trains its employees by clearly communicating how you expect your employees to behave that will pave the way to make the workplace more inclusive.
  2. Try to become gender neutral in all aspects of the workplace. Moving towards gender neutrality will create a workplace where people of all genders can authentically express their gender identities. Using more inclusive language in employee handbooks and notices, such as “people of all genders” or simply “employees” as opposed to binary language, such as “men and women,” is another way to impose gender neutrality in the workplace.  Additionally, employers should revise dress codes to avoid gender stereotypes.  If your company’s uniforms must have a “male” or “female” version, let employees dress according to the gender they identify with, or provide a gender-neutral option that all employees are permitted to wear.
  3. Acknowledge and use the employee’s preferred name, gender, and pronoun. To the greatest extent possible, company directories, email addresses, and business cards should include the employee’s preferred name and gender. When addressing a TGNC employee, employers, supervisors and co-workers should also use the employee’s preferred pronoun and avoid misgendering.  Misgendering occurs when you call a TGNC person by their old name after they changed their name, or using pronouns that don’t match the TGNC person’s chosen gender identity.  Employers may want to offer the option of including the employee’s preferred gender pronoun in their email signature to let others know of their preferred gender pronoun.  Employers should also establish ways to deal with a discrepancy on any legal documents and do the best they can to use the employee’s preferred name, gender, and pronoun.  It might be easier to think about the information your company really needs for documentation purposes, and to refer to an employee’s legal name only when necessary.
  4. Respect everyone’s confidentiality and privacy. All supervisors, managers, colleagues and co-workers should understand that it is obviously inappropriate to ask a TGNC employee about their transitioning or surgical status. Although it may be an intriguing topic to discuss, employees must understand TGNC people are in no way obligated or expected to disclose their personal information to you.  Should a TGNC employee choose to share their personal information with a supervisor, the supervisor should have the conversation in a private place where the TGNC employee may speak freely.  Supervisors and managers should make sure they do not disclose their personal feelings on the topic, and to take care not to share any private details, including medical decisions, that the TGNC employee did not authorize to be heard.
  5. Model an inclusive and safe work environment. Creating a safe and more inclusive workplace simply requires employers, supervisors, and managers to think about how they talk about marginalized or minority groups. One way to do this is to always assume there is a TGNC person in the room and to make sure all conversations involving TGNC people or any other minority is respectful and appropriate for the workplace.  The way a supervisor or manager speaks about a certain group of people sets an example for employees to follow.
  6. Plan for transitions before they happen. Implementing policies and procedures to help employees who transition on the job can relieve a lot of anxiety and reduce the amount of speed bumps for the employee. Developing clear guidelines for supervisors and managers to support an employee going through a transition is necessary.  Supervisors should be instructed to start by listening and let the employee guide the conversation.  Managers and supervisors should express their willingness to help develop and brainstorm ways in which you can support them throughout this process.  It might mean that you communicate the necessary information to others on behalf of the employee with their permission, or you help the employee come out to a small number of coworkers as necessary.  Supervisors can let the employee know that there are set procedures for how employment records are changed and how their transition is communicated to staff that are required to be notified.
  7. Allow employees to use their preferred-gender restroom. To ensure an inclusive workplace, allow TGNC employees to use gender-segregated restrooms that correspond to their gender identity. Other options may include permitting employees to use gender-neutral single-occupancy restrooms.  Any unnecessary bathroom restriction can result in an employee avoiding using the restroom at work, which is dangerous and unhealthy.  Any way to help alleviate anxiety for TGNC employees will significantly improve conditions in the workplace.
  8. Include TGNC employees in decision-making involving TGNC staff. It is shocking how many employers will create TGNC policies without consulting their TGNC employees. It should come as no surprise that a policy will likely be ineffective when that policy is developed by those it does not affect or apply to.  It may be a good idea for employers to enlist outside expertise from TGNC groups for guidance and direction when drafting policies or making decisions involving TGNC employees.
  9. Adopt, display and follow through with a formal non-discrimination policy. To assure employees and customers know that your company seeks to create an inclusive work environment, develop a formal non-discrimination policy and display it proudly in the workplace and on your company website. Such policies let all marginalized groups, including TGNC individuals know that they are welcome to apply for employment without fear of discrimination and that employees may show up to work every day without fear of harassment or discrimination.  Displaying the policy can serve as a reminder of how all employees are expected to treat one another and that there are severe repercussions for violating the policy.  To ensure everyone adheres to this non-discrimination policy, employers must consistently enforce this policy.  Although an employee’s concern may seem insignificant or appear to indicate that a minor mistake was made, one incident may be indicative of a larger problem.  Take and investigate all concerns and complaints seriously in order to maintain a safe and inclusive environment for all employees.

Take and investigate all concerns and complaints seriously in order to maintain a safe and inclusive environment for all employees.

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New York’s Suffolk County Imposes Salary History Ban Takes Effect June 30, 2019

On November 20, 2018, the Suffolk County Legislature passed the Restrict Information Regarding Salary and Earnings Act (“RISE” Act) by a vote of 17-0.  As stated in the RISE Act’s legislative intent section, the New York State Department of Labor (NYSDOL) issued a report in April 2018 which found that women in Suffolk County earn 78.1% of what their male counterparts earn, compared to the State-wide percentage of 86.8%.  Since employers often use salary history to determine a prospective employee’s wages or salary, an applicant’s prior salary can thus perpetuate the inequitable pay scale that women face with each successive job.

The RISE Act aims to close the pay gap between men and women by restricting employer’s access to a potential employee’s salary history.

Effective June 30, 2019, employers with four (4) or more employees in Suffolk County may not:

  • Inquire, in any form of application or otherwise, about a job applicant’s wage or salary history, including but not limited to, compensation and benefits.
  • Rely on the salary history of an applicant for employment in determining the wage or salary amount for such applicant at any state in the employment process including the offer or contract.

Suffolk County employers should note that the RISE Act expressly excludes any actions taken that are (1) pursuant to any federal, state or local law which requires the verification or disclosure of an applicant’s salary for employment purposes, or (2) pursuant to a collective bargaining agreement.

Violations under the RISE Act may result in an award of compensatory damages to the individual, payment to the County general fund, and civil fines and penalties in an amount not to exceed $50,000 ($100,000 if the violation is found to be willful, wanton or malicious).

What must employers do to ensure their pre-employment practice comply with this new legislation?  It is a good idea to instruct hiring managers not to engage in any discussion involving an applicant’s compensation history during the interviewing process.  Additionally, employers should review all job application forms to determine that their hiring practices do not require applicants to submit any information regarding their salary history.  Employers should also verify that their procedures to check references of job applicants do not result in obtaining an applicant’s salary history.

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Protect Your Company By Playing It Safe When Hiring Interns

As we enter into the start of summer, college students now begin their summer internship programs. It is time for employers and businesses to review their internship program policies. College students rely on summer internships to gain valuable professional experience and in exchange, companies provide unpaid internships as an opportunity to let students learn from behind the scene and get a foothold into a new industry. But is an unpaid internship legal?

Employers must ensure when creating an internship program without providing compensation that they comply with local, state and federal laws governing whether participants of their unpaid internship programs are interns or employees. Here’s how you may determine if your business’ unpaid internship program is legal.

As of January 2018, the U.S. Department of Labor (DOL) announced its switch from the old six factor test to the new primary beneficiary test to determine if an intern for a private sector for profit business is considered an employee under the FLSA. The primary beneficiary test includes seven flexible elements that will be applied to each case individually. The seven elements of the primary beneficiary test include:

1. Whether the intern and employer clearly understand there is no expectation of compensation. If there is any promise of compensation, whether expressed or implied, it suggests that the intern is an employee.
2. The degree to which the internship program provides training as would be comparable to that which would be provided in an educational environment, including hands-on and clinical training provided by educational institutions.
3. If the internship is connected to the intern’s formal education institution by receiving academic credits or the integration of coursework.
4. If the employer accommodates the intern’s academic commitment by following the academic calendar.
5. Whether the length of the internship program is limited to a period in which the program provides the intern with beneficial learning.
6. The extent to which the work the intern performs complements rather than displaces the work paid employees perform, while affording significant educational benefits to the intern.
7. If both the employer and intern understand that the internship program will be conducted without leading to a job offer once duration of the internship has expired.

How are these elements applied? Under what circumstances under the FLSA will the internship not be compliant, if it doesn’t meet all factors? If it does meet some, but not all? Employers should note that no single factor of this test is determinative, but the core issue to decide whether an intern would be deemed an employee under the FLSA is whether the internship program is primarily benefitting the student or the employer.

New York has also enacted separate criteria in addition to the federal standards to determine whether an intern working for a for-profit business is subject to the New York State Minimum Wage Act and Wage Orders. Generally, an intern will only be considered exempt from the requirements of Minimum Wage Act and Orders if the intern is not in an employment relationship. Under New York labor standards an employment relationship does not exist if all of the following criteria are met:

1. Although the training includes actual operation at the employer’s facilities, the training the intern receives must be similar to training provided in an educational program (e.g., the program builds on a classroom or academic experience, not the employer’s operations; the intern is not performing routine work of the business on a regular basis and the business does not depend upon the work of the intern).
2. The training must be for the benefit of the intern and any benefit to the employer must be merely incidental.
3. The work the intern performs does not displace regular employees and the intern works under close supervision (e.g., intern’s job shadows an employee to learn certain functions, under the constant supervision of regular employees). It should be noted that interns will be viewed as employees if the business would need to hire more staff or require existing employees to work more hours to do the interns’ work.
4. The activities of interns do not provide an immediate advantage to the employer and on occasion, the employer’s operations may actually be impeded.
5. The intern is not necessarily entitled to a job once the internship has ended and the intern is free to accept a job elsewhere in the same field.
6. Interns must be notified in writing, prior to the start date of the internship, that they will not receive any compensation and are not considered employees for minimum wage purposes.
7. All clinical training is performed at the direction and under the supervision of people who are experienced and knowledgeable of the activity.
8. Interns cannot receive employee benefits including, but not limited to, health and dental insurance, retirement or pension credit, and free or discounted goods and/or services from the employer.
9. The training is general and will prepare interns to work in any similar business. The program may not be specifically designed for a job with the employer that offers the program.
10. The employer’s screening process for accepting interns into its program is not the same as for employment and does not appear to be for that purpose. The screening may only use criteria relevant for admission to an independent education program.
11. Any postings, solicitations, or advertisements for the internship must clearly discuss training or education, instead of employment, although an employer may indicate a qualified graduate may be considered for employment.

Essentially, if employers still want to proceed with an unpaid internship program, they must make sure the program includes a strong educational component. Employers must understand that merely being associated with a university or other institution of education does not make an unpaid internship legally sound.

Here are some key tips employers must consider if they choose to offer an unpaid internship program:

1. Create a formal internship program that includes scheduled start and end dates.
2. Institute a method to maintain a record of the hours worked.
3. Be certain the internship program is not merely a substitute for paid, regular employees or as a trial period.
4. Include in all posting, advertisements or solicitations that applicants eligible for college credit are preferred.
5. Provide an offer letter in writing to the intern stating the internship is unpaid and that a job is not guaranteed.

Be sure to review and update your company’s policies regarding unpaid internship programs to be certain they comply with federal and state standards.

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SSA “No-Match” Letters Strike Again

The Social Security Administration (SSA) has once again begun the practice of sending “no-match letters” to employers.  The SSA sends no-match letters (or more formally known as Employer Correction Requests) to employers with at least one employee whose filed W-2 contains a Social Security number and name combination that does not match the SSA’s records.  The purpose of sending the no-match letter is to advise employers that certain corrections must be made to enable the SSA to properly post employees’ earnings to the employees’ corresponding SSA records.  The no-match letter will provide the employer with the employees’ names and Social Security numbers that do not match SSA’s records.

The SSA began its practice of sending no-match letters in 1993.  However, the SSA stopped sending no-match letters in 2012.  Now that the SSA has reinstated its practice of sending no-match letters, and based on the current presidential administration’s pledge to increase workplace immigration enforcement, employers should consider it a top priority to contact an attorney to help if they receive such a letter.  Although discrepancies leading the SSA to find a “no-match” can arise from ordinary events, such as a marital name change, unreported name changes, typographical errors, and incomplete or inaccurate employer records, such inconsistencies may be indicative of an employee using a false identity.

Employers must know how to appropriately respond to a no-match letter.  For example, employers may violate the Immigration and Nationality Act’s anti-discrimination provisions should the employer request unnecessary or excessive documentation from employees relating to the verification of an employee’s eligibility to work in the U.S.  An employer may also be liable for an improper action such as firing or suspending an employee because he or she was flagged in a no-match letter.  It is important for employers to know that an employer may not require employees to physically show their Social Security card for purposes of wage reporting.  Employers should also be wary of how they respond to a no-match letter, since employers may be vulnerable to lawsuits based on discrimination for an over-encompassing response.  Hence, employers should adopt a written policy outlining the procedure for responding to no-match letters and the process to maintain records of the responses.

While the SSA recognizes that a “no-match” is not a conclusive finding that an employee is not authorized to work in the U.S., no-match letters alert employers of a possible issue.  Should an employer receive a no-match letter, it would behoove the company to consider the ramifications of failing to respond to the letter.  In the case of an I-9 audit by Immigration and Customs Enforcement (ICE), employers will be asked to produce any records relating to the receipt of a no-match letter and evidence as to how the employer responded.  ICE will consider a response addressing the no-match issues as evidence of good faith compliance in the event of an audit or raid.

How can employers take proactive measures to protect themselves as a result of the return of no-match letters?  Employers should first check their records to ensure they have accurately entered the employee-provided information.  Then, should they find a discrepancy, ask the employee to verify their Social Security number, spelling of their name, or if they changed their name.  This will enable employers to proactively address a no-match letter should they receive one.  For steps beyond this, legal counsel should be sought.

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News Alert: Employers Must Provide 2017 and 2018 Pay Data by September 30, 2019

Employers, including federal contractors and subcontractors, with 100 or more employees have until September 30, 2019 to cull together and submit their pay and hours data from both 2017 and 2018 to the United States Equal Employment Opportunity Commission (EEOC).  On April 25, 2019, a federal judge in Washington D.C. ruled that employers are required to submit their pay/hours data as Component 2 of the EEO-1 form in order to reflect how much the employer paid employees of different ethnicities, races, and sexes to supplement the EEOC’s compilation of employers’ demographic data.

This decision follows the United States District Court for the District of Columbia’s prior ruling in March 2019 in National Women’s Law Center, et al., v. Office of Management and Budget, et al., Civil Action No. 17-cv-2458 (D.D.C.) to restore the Obama administration’s efforts to eliminate race- and gender- based pay gaps by implementing the EEOC’s data collection.  In 2017, the Trump administration rolled back the pay data requirement due to the burden that the pay data paperwork placed on employers.

The requirement and deadline to submit the pay data were previously uncertain, but the EEOC proposed the September deadline when it appeared the District Court was going to reinstate employers’ pay data reporting obligation.  Despite the fact that the EEOC stated it was not equipped to collect the data, the EEOC decided it could meet the September deadline if aided by a third-party vendor.

What does this mean for employers?

Employers must now comply with the EEO-1 reporting requirements, which consist of two components: a demographic survey and a “snapshot” of employee pay data.  Employers should be familiar with Component 1, which is not affected by the District Court’s ruling.  Employers are required to submit their 2018 EEO-1 Component 1 demographic data by May 31, 2019.

Employers are now also required to file their EEO-1 Component 2 data for calendar years 2017 and 2018 by September 30, 2019.  Although the process is fairly straightforward, it could be a time-intensive task for employers who have not yet begun to gather their pay data.  Employers will be required to report the total-year W-2 wages (Box 1) and total-year hours worked for the employees reported in the Component 1 data filed for 2017 and 2018.

It is unknown what the EEOC will do with all of the Component 2 data employers submit.  As a precaution, employers should review all pay data prior to filing it to the EEOC.  Should employers become aware of any discrepancies, employers should speak with managers and supervisors to account for any inconsistencies.

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Review Your Handbooks, New York City Lactation Laws Went Into Effect

Two new laws passed by the New York City Counsel went into effect on March 18, 2019 regarding employers’ requirements to provide lactation rooms and accommodations for employees.  These new laws apply to employers with four or more employees in New York City and they require employers to provide lactation rooms to employees upon request, state the minimum standards the lactation room must comply with, and require employers to develop and implement new lactation policy and notice requirements.

These new laws now require NYC employers to provide two specific accommodations to employees who want to express breast milk during the work day: (1) a room where employees may express breast milk and (2) a refrigerator for employees to store breast milk during the workday.  The laws require employers to have a room for lactation that complies with the statutory standards (absent undue hardship) and develop and distribute a written lactation policy.

As per the legislation, a “lactation room” must be sanitary (not a restroom) and must be free from intrusion and shielded from the view of others.  The room must also contain at least one electrical outlet, a surface for employees to place personal items (i.e., a breast pump, etc.), and a chair.  The lactation room should be located near the employee’s workplace and near running water so employees may wash their hands and/or clean breast pump parts.

If an employer’s dedicated lactation room is also a space used for another purpose, the room shall be solely used as a lactation room when an employee needs to express breast milk.  Employers are obligated to provide notice to employees that employees who need to use the multi-purpose room to express breast milk will be given priority over employees using the room for other reasons.  Employers may want to use a room with a door that locks or to place a sign on the door stating the room is occupied and its occupants are not to be disturbed.

If an employer cannot provide a multi-purpose space or dedicated room available for lactation because providing one would pose an undue hardship on the employer, the employer is required to engage in a cooperative dialogue to ensure employees will be able to express breast milk at work.  Such accommodations may include creating a temporary lactation space, expressing breast milk in a shared space, expressing breast milk at the employee’s work station, or allowing longer breaks for employees to express breast milk.

Regardless of whether an employer has a dedicated room for lactation, employers may not unreasonably limit the amount of time or the frequency that an employee expresses breast milk.  If an employer provides compensated breaks, employees who use their break time to express breast mill will be compensated to the same extent and in the same way that other employees are compensated for break time.

The New York City Commission on Human Rights (CCHR) recently released three model lactation accommodation policies for employers located at the CCHR’s website: https://www1.nyc.gov/site/cchr/law/lactation.page.  The lactation policy that employers must implement must include a statement that employees have a right to request a lactation room and identify the process for doing so.  When drafting a lactation policy, employers must ensure they comply with the following statutory requirements:

  • Specify the means by which an employee may submit a request for a lactation room;
  • Require that the employer responds to a request for a lactation room within a reasonable amount of time that does not exceed five business days;
  • Provide a procedure to follow when two or more employees need to use the lactation room or dedicated space at the same time, including contact information for any follow up required;
  • State that the employer shall provide reasonable break time for an employee to express breast milk; and
  • State that the employer will engage in a cooperative dialogue with employees if the request for a lactation room poses an undue hardship on the employer.

The CCHR has provided a model lactation accommodation request form located on its website.

Employers should note that failure to maintain a lactation accommodation may result in penalties, fines or damages assessed by the CCHR.

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New York City Council Passes Bill Banning Pre-Employment Marijuana Drug Testing

It’s time for New York City employers to reconsider their pre-employment drug testing policies.  On April 9, 2019, the New York City Council (“Council”) passed a bill by a 40-to-4 vote that would prevent most employers from requiring pre-employment drug testing for marijuana.  This bill is the city’s latest efforts in a series of steps to legalize marijuana.

If this drug-screening bill is signed into law by Mayor Bill De Blasio, drug testing job applicants for marijuana as a condition of employment would become an unlawful discriminatory practice, and New York City would join Washington D.C., which also bars employers from testing for marijuana before a job offer is extended.  It should be noted that this bill appears to prohibit drug testing for marijuana at any point before an applicant is hired.

Employers should note that certain categories of employment, primarily areas of employment involving public safety, would be exempt from the law, including: (i) law enforcement personnel; (ii) positions requiring the supervision or care of medical patients, people with disabilities, or children; and (iii) individuals working on construction sites.  Applicants for positions subject to federal or New York State’s jurisdiction, meaning federal and state employees, or pilots, truck drivers and contractors, would also be exempt from this law.  In addition, the bill also sets forth that the Commissioner of Citywide Administrative Services would be permitted to make exceptions for positions of employment with the potential to significantly impact the health or safety of employees or members of the public.  Further, collective bargaining agreements containing pre-employment drug-testing provisions and federal and state regulations, grants or contracts requiring pre-employment drug-testing provisions would be unaffected by the new law.

Proponents of the bill argue that pre-employment drug testing for marijuana not only invades a potential applicant’s privacy but also impedes employment when there is little evidence to support the correlation between future employee performances and passing a pre-employment drug test.  Those who oppose the bill view the legislation as overreaching and unreasonably interfering with the private employers’ discretion when hiring screening potential job applicants.

If Mayor De Blasio signs the bill into law, the law will take effect one year following its enactment.

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Changes to the Paid Voting Time Law in New York State

On April 1, 2019, New York State passed a new yearly budget that includes a provision revising the amount of paid voting time employees may take to vote.

New York’s previous law on voting leave provided that if an employee had four consecutive hours either between the opening of the polls and the beginning of their working schedule, or between the end of their working schedule and the closing of the polls, they shall be deemed to have sufficient time outside of their working hours within which to vote and they did not require paid time off from work to vote.  If an employee’s work schedule did not permit them to have this four-hour window of time to vote, the employee could take up to two hours of paid time off either at the beginning or end of their schedule to vote.  In order to take the two hours of voting leave, the employee would need to notify their employer not more than ten nor less than two working days prior to the day of the election.

New York’s new voting leave law took effect immediately as of April 1, 2019, and includes several changes from the previous law.  First, the law now requires employers to provide up to three hours of paid time off that the employer will designate at the beginning or end of the employee’s working schedule, instead of granting only two hours of paid time off to vote be taken at the beginning or end of the employee’s working schedule.  Second, this new voting leave law removed the requirement that employees could not notify their employer to request voting leave prior to ten days before the election.  The new law now only requires that employees notify their employee of the need to take voting leave not less than two working days before the date of the election.  Perhaps the most important change to the previous law is that the new law eliminates the presumption that an employee has sufficient time to vote if they have four consecutive hours outside of their work schedule to vote.  This last change essentially guarantees employees requesting time off to vote must be granted ample paid time off to enable them to vote, up to a maximum of three hours.

Employers should note that the language of the law does not specify which elections qualify for paid voting leave under.  However, the broad language of this new law can undoubtedly be interpreted to include paid time off for employees to vote in all federal, state and local elections.  Employers must be sure to update their handbooks to comply with New York’s new voting leave law.

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A Welcomed Victory for the NY Home Care Industry

On March 26, 2019, the New York Court of Appeals issued a highly favorable decision for the New York home care industry.  The Court of Appeals reversed two Appellate Division decisions, Andryeyeva v. New York Health Care, Inc. and Moreno v. Future Care Health Services, Inc., and deferentially relied on the New York Department of Labor’s (NY DOL) interpretive guidance on the 13-hour rule for home health aides.  The Court of Appeals stated the Appellate Division failed to afford the NY DOL sufficient deference and held that sleep-in home health aides are only entitled to 13 hours of wages for a 24-hour shift, provided that they receive 8 hours for sleep breaks (5 hours must be uninterrupted) and 3 hours for meal breaks.

Prior to this decision, the NY DOL had not issued a permanent regulation on the 13-hour rule.  The NY DOL issued an emergency regulation in October 2017 which provided that sleep-in home health aides who work a 24 hour shift in accordance with federal Fair Labor Standards Act regulations are not required to be compensated for sleep times and meal periods.  The emergency regulation was in effect for 90 days, and the emergency regulation was renewed three times.  The NY DOL held a public hearing in July 2018 and accepted comments on the proposed regulation as part of the process to formally adopt the emergency regulation as a permanent regulation.  However, on September 26, 2018, the emergency regulation was nullified by the New York Supreme Court in Matter of Chinese Staff and Workers Assn. v. Reardon because the NY DOL could not cite to an “emergency” to justify issuing the regulation.  The NY DOL did not appeal this Supreme Court’s decision and has yet to issue a permanent 13-hour regulation.

The NY home care industry has anxiously awaited this Court of Appeals decision but can now expel a huge sigh of relief since the NY home care industry would likely crumble if the 13-hour rule was not upheld.  The courts deciding the numerous class action lawsuits filed against home care companies will be guided by this Court of Appeals decision as controlling case precedent.

NY home care employers should note that the Court of Appeals remanded to the lower the courts the issue of class certification claims involving home health aides who did not receive the required minimum time for sleep and meal breaks in their 24-hour shifts.  Hence, employers must ensure that they maintain accurate records of all meal and sleep periods for sleep-in home health aides.  PMP will continue to monitor this case and will provide updates on any further developments.

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