Author: Scott Horton

Scott has been practicing Labor & Employment law in New York for almost 20 years. He has represented over 400 employers and authored 100s of articles and presentations and wrote the book New York Management Law: The Practical Guide to Employment Law for Business Owners and Managers. Nothing on this blog can be considered legal advice. If you want legal advice, you need to retain an attorney.

New York Retail Worker

New York Retail Worker Safety Act Enacted

On September 5, 2024, Governor Kathy Hochul signed the New York Retail Worker Safety Act into law. The law introduces comprehensive measures aimed at reducing workplace violence in retail settings. Depending on the size of their workforce, employers in the retail industry will need to implement specific measures to comply with the new law.

Covered Employers

The New York Retail Worker Safety Act applies to any non-governmental employer with at least 10 retail employees.

A retail employee is someone who works in a store that sells consumer commodities at retail. Stores that are primarily engaged in the sale of food for consumption on the premises do not qualify.

Key Requirements of the New York Retail Worker Safety Act

The new law includes policy and training requirements for all covered retail employers in New York. Large employers must also implement silent response buttons.

Workplace Violence Prevention Policy

All covered employers must establish a comprehensive workplace violence prevention policy that identifies potential risks and outlines strategies to mitigate them. Employees must receive a copy of the policy at the time of hire and at every required workplace violence prevention training. The New York State Department of Labor (NYS DOL) will create a model workplace violence prevention policy to guide employers. Employers should use the templates as models for compliance.

Written Notice Requirement

Employers must provide their employees with written notice of the workplace violence prevention policy both when they are hired and during each training session.

Training Requirements

The law introduces mandatory training for all retail employees, with specific training timelines depending on the size of the employer.

    • Employers with 50 or More Retail Employees must provide workplace violence prevention training to all employees upon hire and then annually.
    • Employers with 10-49 Retail Employees must also provide workplace violence prevention training. But it only needs to be conducted upon hire and once every two years, instead of annually.

This training must be interactive and address a variety of safety topics critical to retail environments. It must include the following elements:

  1. Information on the requirements of the New York Retail Worker Safety Act.
  2. Examples of how employees can protect themselves in the event of workplace violence from customers or coworkers.
  3. De-escalation techniques to manage and reduce potentially violent situations.
  4. Active shooter drills to prepare for extreme scenarios.
  5. Emergency procedures that are specific to the retail environment.
  6. Instruction on the use of security alarms, silent response buttons, and other emergency devices.
  7. Training on supervisors’ additional responsibilities, including overseeing workplace-specific emergency procedures.
  8. Education on areas where there have been previous security incidents.

The NYS DOL is tasked with developing a model training program that employers can reference or adopt. This should help streamline compliance for employers by providing them with a ready-made framework for training their workforce. However, employers may create their own training program as long as it meets DOL standards.

The policy, training, and notice requirements take effect June 2, 2025.

Silent Response Button Requirement

Beginning January 1, 2027, employers with 500 or more retail employees statewide must provide a silent response button (or panic button) to all retail employees. These buttons allow employees to discreetly alert local authorities in the event of an emergency, such as violent incidents involving customers or coworkers.

Key Changes from the Original New York Worker Safety Bill

Upon her signing, Governor Hochul and the Legislature reached an agreement to modify the following aspects of the Act. These changes are expected to be included in a forthcoming amendment that should be in place before the law otherwise takes effect.

  • In-Store Emergency Notification Mechanism (Silent Response Button)
    The original bill required employers with 500 or more employees nationwide to provide panic buttons. The final version of the law now applies this requirement only to employers with 500 or more employees in New York State.
  • Training Frequency for Smaller Employers
    In the original bill, all employers had to provide annual training. This timing will change, allowing employers with 10-49 retail employees to provide training every two years, instead of annually. This modification somewhat reduces the administrative burden for smaller businesses.

Looking Ahead

With the New York Retail Worker Safety Act now law, retail employers should begin reviewing their existing safety protocols and prepare for the upcoming deadlines. Employers with 10 or more retail employees should be ready to adopt workplace violence prevention policies and training programs by June 2, 2025. Those with 500 or more employees should also begin planning for the installation of silent response buttons before the January 1, 2027 deadline.

However, employers will likely need to wait until the NYS DOL issues the model templates for both workplace violence prevention policies and the training programs. Those templates will likely further establish the required (or at least recommended) elements of compliance with the law.

 

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Model Freelancer Contract

NYS Model Freelancer Contract

New York State’s Freelance Isn’t Free Act took (FIFA) effect on August 28, 2024. As required by the Act, the New York State Department of Labor has developed a model freelancer contract. Although the model agreement meets the legal requirements, it has serious limitations. Accordingly, most hiring parties should consider modifying the model contract or drafting their own FIFA-compliant agreement.

Freelance Isn’t Free Act Overview

New York’s FIFA addresses non-employment relationships between a “hiring party” and a “freelance worker.” Under this law, only individuals and single-person organizations can qualify as a “freelance worker.”

When a hiring party engages a freelance worker, there must be a written contract between them.

By law, the contract must contain the following information:

  • Name and mailing address of both the hiring party and the freelance worker
  • Itemization of all services to be provided by the freelance worker
  • Value of the services to be provided
  • Rate and method of compensation
  • Date or mechanism of determining when payment will be made
  • Date by which a freelance worker must submit a list of services rendered to allow the hiring party to process timely payment

Hiring parties that don’t ensure there is a compliant contract in place risk various penalties. But the biggest risks aren’t just not having a written contract.

Purpose of the Freelance Isn’t Free Act

More than insisting on a written contract, FIFA is designed to give non-employees compensation protections similar to those of employees. Instead of typical breach of contract damages, FIFA allows freelancers to recover enhanced penalties as are available for unpaid wage claims. Consequently, hiring parties face significant liability risk when they don’t pay a freelancer in full and on time.

Click here for more on the FIFA requirements.

Components of the Model Freelancer Contract

The DOL’s model freelancer contract contains 25 numbered sections. These include identification of the parties, compensation terms, and various provisions referring to the freelance worker’s rights under FIFA. It appears the latter content goes beyond what the law actually requires.

Such additional provisions include those with the following headers:

  • Prohibition Against Waiver
  • Prohibition Against Retaliation and Discrimination
  • Violations

The template also includes the following provisions that may not be desirable (at least as written) in all contexts:

  • Intellectual Property Rights
  • Revisions
  • Termination
  • Indemnification
  • Insurance Required
  • Other Business Activity
  • Late Payment
  • Limitations on Liability
  • Confidential Information

The NYS DOL template “Freelance Worker Agreement” is available here.

Model Freelancer Contract Doesn’t Avoid Employment Relationship

By using the model freelancer contract as written, hiring parties would not only be telling freelancers how to pursue claims against them, but may also unwittingly jeopardize the independent contractor nature of the relationship.

The model contract states that “Nothing in this Agreement shall indicate the Freelance Worker is a partner, agent, or employee of the Hiring Party.” But it doesn’t specifically acknowledge that the freelancer is not an employee! Plus, the check-box, fill-in-the-blank format of other sections could result in terms that may support an employment classification.

Remember, a hiring party and worker can’t simply decide whether they have an employment relationship or not. That is always a question that could be determined by a court or government agency for various purposes after the fact. And the laws often operate on the assumption of an employment relationship (with the attendant legal consequences). Typically, the burden is on the hiring party to demonstrate that no employment exists, regardless of what the worker intended when entering into the arrangement.

Other aspects of the template agreement could also unwittingly support an employment arrangement. For example, providing an hourly pay rate and certain insurance coverages may be more typical for employees.

Better Approaches to FIFA Compliance

Ultimately, using the DOL’s model freelancer contract is probably better than not satisfying the obligation to put the terms of a freelance engagement in writing. However, hiring parties should strongly consider preparing their own agreements (with appropriate legal advice). It’s probably fair to say the DOL’s template is designed to favor freelancers. Even if not, the one-size-fits-all approach is likely to lead to problems down the road for some hiring parties.

Remember, the Freelance Isn’t Free Act and other related employment/independent contractor provisions are intended to protect workers. Any ambiguity will be resolved to their benefit. Thus, it’s critical to be intentional and cautious in drafting your independent contractor agreements (whether subject to FIFA or not).

 

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FTC Non-Compete Ban Blocked

FTC’s Non-Compete Ban Blocked Nationwide

On August 20, 2024, the U.S. District Court for the Northern District of Texas enjoined the Federal Trade Commission’s (FTC) proposed non-compete ban. The decision, issued by U.S. District Court Judge Ada E. Brown, sets aside the FTC’s Non-Compete Rule.  So, the FTC cannot attempt to enforce the rule when it is scheduled to take effect on September 4, 2024.

The case is captioned as Ryan LLC (Plaintiff) and Chamber of Commerce of the United States of America, Business Roundtable, Texas Association of Business, and Longview Chamber of Commerce (Plaintiff-Intervenors) v. Federal Trade Commission, Civil Action No. 3:24-CV-00986-E.

Basis for Injunction

Judge Brown found two legal deficiencies in the promulgation of the FTC’s non-compete rule.

Exceeding Statutory Authority

The court found that the FTC exceeded its statutory authority under the Federal Trade Commission Act (FTC Act). The ruling emphasized that the FTC does not have the power to issue substantive rules that broadly prohibit non-compete agreements across all industries and employment levels. The FTC’s authority to prevent unfair methods of competition does not extend to the creation of sweeping, substantive regulations such as this Non-Compete Rule.

Arbitrary and Capricious Action

The court also determined that the FTC’s rule was arbitrary and capricious. The ruling criticized the FTC for imposing a one-size-fits-all ban on non-compete agreements without adequately considering less restrictive alternatives or providing a rational basis for the rule. Plus, the FTC’s reliance on certain studies was insufficient to justify such a broad prohibition. The judge noted that no state had enacted a rule as far-reaching as the FTC’s proposed regulation.

According to Judge Brown, “In sum, the Rule is based on inconsistent and flawed empirical evidence, fails to consider the positive benefits of non-compete agreements, and disregards the substantial body of evidence supporting these agreements.”

Status Quo Preserved

With the proposed non-compete ban blocked, employers may continue using non-competes to the extent allowed under applicable state law. Note that some states, such as California, already largely prohibit the enforcement of non-compete clauses.

While this ruling halts the FTC’s current efforts, it does not entirely close the door on federal regulation of non-competes. The FTC may attempt to appeal the decision (though the relevant appellate courts are not expected to reach a different conclusion). Alternatively, the FTC may revise its approach with a more limited non-compete ban. Some individual state legislatures will probably revisit potential non-compete bans as well.

 

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