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.

2020 Election Results for NY Employers Cover Slide

What the 2020 Election Results Mean for New York Employers (Webinar Recap)

On January 26, 2021, I presented a complimentary webinar called “What the 2020 Election Results Mean for New York Employers”. For those who couldn’t attend the live webinar, I’m happy to make it available for you to watch at your convenience.

In the webinar, I discuss:

  • Still Coping with COVID
  • Biden Administration Priorities
  • Anticipated New York Legislation
  • Unemployment
  • Union Activity

Without making concrete predictions, we can anticipate what the general tone of new administrative and legislative priorities will look like. Under Democratic-led executive and legislative branches, both the New York State and federal governments are likely to expand worker protections, and hence employer obligations, in 2021.

The groundwork is already in place for further developments related to the coronavirus pandemic. But the initiatives won’t end there. We expect the long-term impact on the workplace of the 2020 elections to be significant.

Don’t have time to watch the whole webinar right now? Click here to download the slides from the webinar.

Why You Should Watch “What the 2020 Election Results Mean for New York Employers”

New York employers have already been facing ever-increasing legal obligations regarding the workforce. This trend will continue in 2021 and may go much further than before. Beyond Albany, the federal government is now also poised to shift rights to employees. This will further establish the critical function of maintaining human resources compliance for all New York employers.

Among the administrative and legislative priorities in Washington will be renewed support for the labor movement. The 2020 election results will inevitably revitalize union organizing efforts as well as empower unions in collective bargaining. Any private-sector employers with unions or at any risk of unionization should be aware of this shift and prepare now to best position the company in its labor relations.

Other areas of focus will include leave laws, minimum wage, and worker health and safety. Staying on top of these changes will be a huge task for employers in 2021. Watch this webinar to prepare yourself for what’s to come.

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NYC Criminal Conviction During Employment

NYC Adds Protections for Employees with Criminal Arrests or Convictions During Employment

New York City joined the ranks of municipalities with a “ban-the-box” law in 2015. The original law prohibited employers with 4 or more employees from asking about an applicant’s pending arrest or criminal conviction record until after making a conditional job offer. Recent amendments to the New York City Fair Chance Act will add new protections for employees with arrests or convictions during employment.

The New York City Council passed the local law on December 10, 2020. Mayor Bill DeBlasio did not sign or veto the law in the time allowed. As a result, the amendments became law on January 10, 2021. The changes will take effect on July 28, 2021.

NYC’s Ban-the-Box Law

In addition to New York laws favoring the re-employment of individuals with criminal records, covered New York City employers must follow the city’s Fair Chance Act when hiring new workers.

Like other ban-the-box ordinances, the 2015 NYC law forced employers to remove questions about criminal histories from job applications. It further precluded employers from inquiring about an applicant’s criminal conviction record until after a conditional offer of employment.

The law separately prohibited employers from searching public databases for information about an applicant’s criminal record (e.g., “background check”) before a conditional offer of employment.

For more on similar laws in other New York cities, read my earlier post Checking in on New York Ban-the-Box Laws.

Criminal Convictions During Employment

The NYC Fair Chance Act will no longer only affect hiring decisions. It will also protect employees convicted during employment.

As with pre-employment convictions, an employer must evaluate the various legally-established factors and determine whether one of the following applies before taking adverse action:

  • there is a direct relationship between the criminal conviction and the employment held by the person; or
  • the continuation of the employment would involve an unreasonable risk to property or to the safety or welfare of specific individuals or the general public.

Pending Arrests and Criminal Accusations

The amendments also add new protections for employees with pending arrests or accusations of criminal wrongdoing. Employers similarly must consider the “fair chance factors” to decide whether adverse action may be taken either because there is a direct relationship between the alleged wrongdoing and the job or employment would involve an unreasonable risk to property or people’s safety.

Fair Chance Factors for Convictions and Arrests During Employment

When considering discipline for existing employees based on convictions or arrests during employment, employers must consider all of these factors:

  • the policy of New York City to overcome stigma toward and unnecessary exclusion of persons with criminal justice involvement in the areas of licensure and employment;
  • the specific duties and responsibilities necessarily related to the employment held by the person;
  • the bearing, if any, of the criminal offense or offenses for which the applicant or employee was convicted, or that are alleged in the case of pending arrests or criminal accusations, on the applicant or employee’s fitness or ability to perform one or more such duties or responsibilities;
  • whether the person was 25 years of age or younger at the time of occurrence of the criminal offense or offenses for which the person was convicted, or that are alleged in the case of pending arrests or criminal accusations;
  • the seriousness of such offense or offenses;
  • the legitimate interest of the public agency or private employer in protecting property, and the safety and welfare of specific individuals or the general public; and
  • any additional information produced by the applicant or employee, or produced on their behalf, in regards to their rehabilitation or good conduct, including history of positive performance and conduct on the job or in the community, or any other evidence of good conduct.

These factors are similar, but not identical, to the factors that apply in making hiring decisions based on a criminal conviction record.

Decisionmaking Process

Before taking any adverse employment action against a current employee based on a criminal conviction or pending arrest, an employer must:

  1. Request information from the employee regarding the fair chance factors.
  2. Consider the impact of the factors on the direct relationship and unreasonable risk analysis.
  3. Give the employee a written copy of such analysis with supporting documents and the employer’s reasons for taking the employment action.
  4. Allow the employee a reasonable time to respond before taking adverse action.

Specific Employer Rights

Temporary Suspensions

Employers may place employees on unpaid leave “for a reasonable time” while completing the process the law requires before taking adverse employment actions.

Intentional Misrepresentations

The law also permits employers to discipline applicants and employees from making intentional misrepresentations about their arrest or conviction history. This carveout doesn’t apply if the misinformation was provided in response to an inquiry prohibited by the law. And, in the case of apparent misrepresentation, the employer must give the individual a copy of the documents demonstrating an intentional misrepresentation and allow them reasonable time to respond.

Exceptions

The New York Fair Chance Act will now apply to all employers regarding employees in NYC with only some exceptions for police, law enforcement agencies, and public employees subject to certain other disciplinary procedures.

The law also does not require employment when another law prohibits it based on the nature of the conviction and/or job.

Preparing to Comply

Employers have until July 28, 2021, to become familiar with these new employee protections and plan accordingly. Employees who engage in crimes before then will remain subject to discipline without these protections. However, once the law takes effect, employers will need to follow the mandatory evaluation process before acting based on employee criminal activity. Though many criminal acts may still warrant dismissal or other discipline, employers will need to request information from employees and document their reasons for taking any resulting action. This process will be a significant change in many employers’ disciplinary practices.

 

New York City provides more information about the Fair Chance Act here.

For more updates on escalating restrictions on New York employers, follow Horton Law on LinkedIn.

 

WARN Notice Obligations

COVID-19 Not an Absolute Defense to WARN Notice Obligations

The COVID-19 pandemic led many employers to reduce their workforces suddenly in 2020. Often, large layoffs occurred with little or no advance notice. Consequently, many employees asserted claims under the federal Worker Adjustment and Retraining Act (WARN Act) and/or similar state laws. Though ultimate liability depends on many factors, a recent federal court decision involving the Enterprise car rental company suggests that employers can’t completely avoid WARN notice obligations just because COVID-19 introduced unprecedented business circumstances.

WARN Notice Requirements

The WARN Act requires employers with at least 100 employees to give up to 60 days’ advance notice to employees (or their unions) and various government entities before implementing certain reductions in force. Notice is required in advance of “plant closings” and “mass layoffs.”

A “plant closing” occurs where an employment site (or one or more facilities or operating units within an employment site) will be shut down, and the shutdown will result in an “employment loss” for 50 or more employees during any 30-day period.

A “mass layoff” occurs where there is to be a group reduction in force that does not result from a plant closing, but will result in an employment loss at the employment site during any 30-day period for (a) 500 or more employees, or (b) 50-499 employees if they make up at least 33% of the employer’s active workforce.

The term “employment loss” means (i) an employment termination, other than a discharge for cause, voluntary departure, or retirement, (ii) a layoff exceeding 6 months, or (iii) a reduction in hours of work of individual employees of more than 50% during each month of any 6-month period.

WARN Notice Exceptions

Employers must give the full 60 days’ notice unless a statutory exception applies.

Faltering Company

This limited exception only applies in the case of plant closings, not mass layoffs. To qualify for the faltering company exception, a company must have been actively seeking capital or business that it had a realistic opportunity to obtain with a good faith belief that giving WARN notice would have precluded the employer from obtaining the capital or business. In addition, the capital or business sought must have been sufficient to avoid or postpone the plant closing.

Unforeseeable Business Circumstances

This exception applies when business circumstances were not reasonably foreseeable when the 60-day notice would have been required.

The employer should be able to point to “some sudden, dramatic, and unexpected action or condition outside the employer’s control”. Federal regulations emphasize that foreseeability should focus on the employer’s “commercially reasonable business judgment”. A company is not required “to accurately predict general economic conditions that also may affect demand for its products or services.”

Natural Disaster

The WARN notice obligations are also mitigated in cases of natural disasters. WARN regulations define “natural disasters” to include “floods, earthquakes, droughts, storms, tidal waves or tsunamis and similar effects of nature.”

For this exception to apply, the employer must show that the reduction in force was a “direct result of a natural disaster.”

Enterprise WARN Act Litigation

In April 2020, the Enterprise rental car company began layoffs with little notice to employees. Some affected employees sued under the WARN Act in the U.S. District Court for the Middle District of Florida. (Benson v. Enterprise Leasing Co., Case No. 6:20-cv-891)

Enterprise made a motion to dismiss the case based on both the “natural disaster” and “unforeseeable business circumstances” exceptions. In January 2021, the court denied the motion, allowing the case to continue.

Notably, the court did not reach the question of whether COVID-19 qualifies as a natural disaster under the WARN Act. However, the judge reasoned that it at least wasn’t clear that the layoff was a “direct result” of COVID-19. Instead, he decided, “This is an indirect result–more akin to a factory that closes after nearby flooding depressed the local economy. Defendants’ facilities or staff didn’t disappear overnight, suddenly wiped out.”

Accordingly, the judge shifted his focus to the unforeseeable business circumstances exception. He acknowledged that the defense “may apply,” but did not warrant dismissal of the case at this early stage. He emphasized that this exception may justify a reduced notice period, but doesn’t necessarily eliminate WARN notice obligations altogether. In this case, one employee received no notice and the other only six days’ notice. Thus, it remains to be litigated whether Enterprise could have given more notice before beginning the layoffs.

Cautionary Tale for Employers

The Enterprise case in Florida will turn on the facts and circumstances of that case. However, the denial of a motion to dismiss serves as a reminder to employers. Litigation is costly and often unpredictable. It is best to carefully consider, with legal experts, the applicability of any potential exception before undertaking reductions in force that could trigger the WARN Act.

COVID-19 might reduce some employers’ WARN notice obligations, but it likely does not eliminate them entirely. The unforeseeable business circumstances exception probably has become harder to rely on now that the pandemic is so far underway. Unfortunately, the adverse economic impact, including layoffs and business closings, is likely to continue, meaning further WARN Act implications.

 

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