Tag: New York

It’s Election Time: Time Off to Vote, Political Activities, and Political Speech in the Workplace

With Election Day quickly approaching, it is the right time for employers to refresh themselves on the various protections that may exist for their employees when it comes to voting and other political activities. Below is an overview of employees’ rights related to voting and other political activities leave, as well as protections for political speech and activity both in and outside the workplace.

Voting Leave Laws

Approximately thirty states require that employers provide their employees with some form of time off to vote. Twenty-one of these states require that the leave be paid. The exact contours of these laws – such as the amount of leave, notice requirements, and whether there is an exception when the employee has sufficient time outside of working hours to vote – vary by state. For example:

  • In New York, employers must provide leave to employees who do not have sufficient time outside of working hours to vote. An employee is deemed to have sufficient time to vote if the polls are open for four consecutive hours before or after the employee’s shift. Employees who do not have such a four-hour window are eligible to take the amount of leave that will – when added to their voting time outside working hours – enable them to vote, up to two hours of which must be without loss of pay. Employees may take time off for voting only at the beginning or end of their shift, as designated by the employer, unless otherwise mutually agreed to between the employee and employer. Employees are required to notify their employer that working time off to vote is needed between two and ten working days before the election.
  • Similarly, in California, employees are entitled to sufficient time off to vote, up to two hours of which must be paid. Unless the employer and employee agree otherwise, the employee must take the leave at the beginning or end of the employee’s shift, whichever allows the most time to vote and the least time off from work. Employees are required to provide notice that time off to vote is needed at least two working days before the election.
  • In the Washington, D.C., employees are entitled to up to two hours of paid leave to vote in either an election held in D.C. if the employee is eligible to vote in D.C., or in an election held in the jurisdiction in which the employee is eligible to vote. Employees must submit requests for leave a reasonable time in advance of the election date. Employers may specify the hours during which employees may take leave to vote, including requiring employees to vote during the early voting period or vote at the beginning or end of their shift during early voting or election day.
  • In Illinois, employers must provide two hours of paid voting leave to employees whose shifts begin less than two hours after the opening of the polls and end less than two hours before the closing of the polls. Employees must provide notice of the need for leave before the day of the election.
  • In Maryland, employees are entitled to up to two hours of paid voting leave, unless the employee has at least two non-working hours to vote while the polls are open. Employees must furnish proof to their employers that they either voted or attempted to vote, which can be in the form of a receipt issued by the State Board of Elections.

Certain states, includingNew York, California, and Washington, D.C., require that employers post a notice of an employee’s right to take leave in a conspicuous location before the election. Sample notices have been published by the New York State Board of Elections, the California Secretary of State, and D.C. Board of Elections.

Other Political Leave Laws

Some states require that employers provide leave for political-related reasons beyond just voting. For example:

  • Alabama, Delaware, Illinois, Kentucky, Nebraska, Ohio, Virginia, and Wisconsin require that certain employers provide unpaid leave for employees to serve as election judges or officials on Election Day. In Minnesota, employees are entitled to paid leave for this reason; however, employers may reduce an employee’s salary or wages by the amount the employee receives as compensation for their service as an election judge.
  • Minnesota and Texas require that certain employers provide employees with unpaid leave to attend party conventions and/or party committee meetings.
  • Connecticut, Iowa, Maine, Nevada, Oregon, South Dakota, and Vermont require that certain employers provide employees with an unpaid leave of absence to serve as elected members of state government. In Iowa, employees are also entitled to leave to serve in a municipal, county, or federal office.
  • In Vermont, employees may take unpaid leave to vote in annual town hall meetings.

Some of these laws only apply to larger employers. For example, in Nevada, employers with at least fifty employees are required to provide leave for employees to serve as members of the state legislature. State laws also vary with respect to the amount of notice that employees must provide to their employers in order to be eligible for leave.

Political Speech in the Workplace

In our current political climate, many employers are concerned with what steps they can take regarding political speech and activity in the workplace. When these discussions or activities occur during working hours, they have the potential to negatively impact performance, productivity, or even possibly cross the line into bullying or unlawful harassment.

When employees publicly attend political rallies or support causes on social media, they may also (intentionally or not) create an actual, or perceived, conflict of interest with their employer. The complicated question of what exactly employers can do around employee political speech and activity is governed by various sources of law, some of which is discussed below.

Additionally, for employers with designated tax statuses, certain political speech can give pose risk to an organization’s tax-exempt status. Many tax exempt-organizations are subject to significant restrictions on lobbying and political activities. For example, 501I(3) organizations risk losing their tax-exempt status if they engage in political campaign activities or if a substantial part of its activities involves lobbying. Speech by an employee that constitutes political campaign or lobbying activity risks being attributed to an organization if an employee’s speech is seen as representative of the organization and being ratified by the organization. For example, if an employee urges their social media followers to contact their state representative about proposed legislation, this risks carrying the inference that the employee was speaking on behalf of the organization.

Employee “Free Speech”

There is no general right to “free speech” in a private sector workplace. Because the U.S. Constitution is primarily concerned with state actors, the First Amendment does not prevent private employers from prohibiting or restricting political speech in the workplace. Therefore, subject to certain exceptions discussed below, private sector employers are generally able to enact prohibitions around discussing politics at work and discipline employees for violating such policies.

However, as noted, an employer’s ability to restrain political speech in the workplace comes with some restrictions. At the federal level, Section 7 of the National Labor Relations Act (“NLRA”), which applies to both unionized and non-union employees, protects certain “concerted activities” of employees for the purposes of “mutual aid or protection.” Political speech or activity that is unrelated to employment, such as an employee distributing pamphlets generally encouraging co-workers to vote for a candidate or support a political party, would not likely be covered or protected by the NLRA. The NLRA therefore does not universally prevent employers from prohibiting political discussions or activities in the workplace.

However, political speech may be protected by the NLRA when it relates to the terms or conditions of employment, such as communicating about wages, hours, workplace safety, company culture, leaves, and working conditions. Therefore, an employee encouraging co-workers to vote for a candidate because the candidate supports an increase in the minimum wage might claim to come under the protection of the NLRA.

State laws may also place certain limitations on employer attempts to restrict employee political speech. For example, Connecticut law prohibits employers from taking adverse action against employees for exercising their First Amendment rights, provided that such activity does not interfere with the employee’s job performance or the employment relationship.

Lawful Outside Activity/Off-Duty Conduct

Many states have laws that prohibit adverse action against employees based on lawful activities outside the workplace, which may include political activities. For example:

  • In approximately a dozen states, employers are prohibited from preventing employees from participating in politics or becoming candidates for public office. New York Labor Law § 201-d prohibits employers from discharging or otherwise discriminating against employees because of their “political activities outside of working hours, off of the employer’s premises and without use of the employer’s equipment or other property, if such activities are legal.” Political activities include (1) running for public office, (2) campaigning for a candidate for public office, or (3) participating in fund-raising activities for the benefit of a candidate, political party, or political advocacy group. Similar laws exist in California, Louisiana, and Minnesota, among other states.
  • Other states – including Delaware, Florida, Massachusetts, and New Jersey– prohibit employers from attempting to influence an employee’s vote in an election. In Florida, “[i]t is unlawful for any person … to discharge or threaten to discharge any employee … for voting or not voting in any election, state, county, or municipal, for any candidate or measure submitted to a vote of the people.” A dozen or so states approach this issue in a more limited fashion by prohibiting employers from attaching political messages to pay envelopes.
  • At least two states, Illinois and Michigan, prohibit employers from keeping a record of employee’s associations, political activities, publications, or communications without written consent.
  • Washington, D.C. prohibits discrimination in employment on the basis of political affiliation. Despite its seemingly broad scope, this statute has been interpreted to only protect political party membership and not (1) membership in a political group, or (2) other political activities, such as signing a petition.

These laws vary considerably from state to state, so it is important for employers to consult the laws when considering policies or rules around employee political activity.

* * *

As the election approaches and early voting takes place, employers should review the applicable laws for each jurisdiction in which they operate and ensure that their policies and practices are compliant. Employers should also ensure that managers are well versed in the employer’s policies around voting and political speech and activities so that they can properly respond as situations arise.

© 2024 Proskauer Rose LLP.
For more on Workplace Speech, visit the NLR Labor Employment section.

Whistleblower Tax Fraud Lawsuit Against Bitcoin Billionaire Settles for $40 Million

MicroStrategy’s founder is alleged to have falsified tax documents for ten years. The settlement resolves the first whistleblower lawsuit filed under 2021 amendments to the DC False Claims Act.

Key Takeaways
On June 3, the District of Columbia Office of the Attorney General announced the $40 million settlement with Michael Saylor
It is the largest income tax recovery in D.C. history
The settlement, which resolves a qui tam lawsuit filed under the DC False Claims Act, underscores the power of whistleblowers in combatting tax fraud
On June 3, the District of Columbia Office of the Attorney General (OAG) made a landmark announcement. The billionaire founder of MicroStrategy Incorporated, Michael Saylor, settled a tax fraud lawsuit for a staggering $40 million. This case, stemming from a qui tam whistleblower suit filed under the District’s False Claims Act, marks a significant milestone in the fight against tax fraud. The OAG declared this as the largest income tax recovery in D.C. history, underscoring the importance of this case.

The DC False Claims Act
This settlement is not just a victory for the District but also a testament to the power of whistleblowers. Under the 2021 extension of the D.C. False Claims Act, individuals have the power to file qui tam suits against large companies and suspected tax evaders. The 2021 amendments even offer monetary awards to those who report tax cheats. This settlement, the first settlement under these amendments, serves to put would-be tax cheats on notice.

As the District of Columbia expands its arsenal against tax fraud, other states should take note. The DC False Claims Act, now covering tax fraud, has become a powerful tool in the fight against financial misconduct. With the District joining the ranks of Delaware, Florida, Illinois, Indiana, Nevada, New York, and Rhode Island as states where false claims suits may be brought based on tax fraud claims, the fight against tax cheats looks promising.

The Case Against Saylor
In 2021, unnamed whistleblowers filed a lawsuit against Saylor, alleging that he had defrauded the District and failed to pay income taxes from 2014 to 2020. The OAG independently investigated these claims and filed a separate complaint against Saylor. The District’s lawsuit alleged that Saylor claimed to be a resident of Florida and Virginia to avoid paying over $25 million in income taxes. Another suit was filed against MicroStrategy, claiming it falsified records and statements that facilitated Saylor’s tax avoidance scheme.

The District’s allegations against Saylor paint a picture of a lavish lifestyle. Saylor is accused of unlawfully withholding tens of millions in tax revenue by claiming to live in a lower tax jurisdiction to avoid paying D.C. income taxes. The OAG’s investigation revealed that Saylor owned a 7,000-square-foot luxury penthouse overlooking the Potomac Waterfront and docked multiple yachts in the Washington Harbor. He purchased three luxury condominium units at 3030 K Street NW to combine into his current residence and a penthouse unit at the Eden Condominiums, 2360 Champlain St. NW. The Attorney General compiled several posts from Saylor’s Facebook, in which he boasted about the view from his D.C. residence.

Whistleblower Tax Fraud Lawsuit Against Bitcoin Billionaire Settles For $40 Million

Furthermore, the OAG found evidence that Saylor purchased a house in Miami Beach, obtained a Florida driver’s license, registered to vote in Florida, and falsely listed his residence on MicroStrategy W-2 forms. Attorney General Brian L. Schwalb stated, “Saylor openly bragged about his tax-evasion scheme, encouraging his friends to follow his example and contending that anyone who paid taxes to the District was stupid.”

The lawsuits allege that records from Saylor’s security detail provide Saylor’s physical location and travel from 2015 to 2020 and show that across six years, Saylor spent 449 days in Florida and 1,397 days in the District. Saylor allegedly directed MicroStrategy employees to aid his scheme to avoid paying District income taxes. The District claims that for the last ten years, MicroStrategy has falsely reported its income tax exemption on Saylor’s wages, claiming he was tax-exempt due to his residential status.

Saylor agreed to pay the District $40 million to resolve the allegations against him and MicroStrategy.

A copy of the settlement can be found here.

Copyright Kohn, Kohn & Colapinto, LLP 2024. All Rights Reserved.

by: Whistleblower Law at Kohn Kohn Colapinto of Kohn, Kohn & Colapinto

For more on Whistleblowers, visit the NLR Criminal Law / Business Crimes section.

Amendments to New York LLC Transparency Act Delay Effective Date, Among Other Changes

New York Governor Kathy Hochul last month signed into law amendments to the recently enacted New York LLC Transparency Act (as amended, the “NYLTA”), extending the NYLTA’s effective date from December 21, 2024, to January 1, 2026 (the “Effective Date”).

The NYLTA will require all limited liability companies (“LLCs”) either formed under New York law or foreign LLCs that seek to be authorized to do business in New York to submit certain beneficial ownership information to the New York Department of State. LLCs will be required to disclose their beneficial owners unless the LLC qualifies for an exemption from the requirements. New York LLCs and foreign LLCs registered to do business in New York should evaluate their structure with counsel that is familiar with the NYLTA (and the federal Corporate Transparency Act (the “CTA”)) to determine whether they will have a filing obligation under the new law.

For New York LLCs formed on or prior to the Effective Date, and foreign LLCs authorized to do business in New York on or prior to the Effective Date, the deadline to file the required beneficial ownership report or the statement specifying the applicable exemptions(s) from the filing requirement is January 1, 2027. For New York LLCs formed after the Effective Date, and foreign LLCs authorized in New York after the Effective Date, the NYLTA will require that beneficial ownership information be submitted within thirty days of filing the articles of organization for an LLC formed under New York law or the initial application for registration filed by a foreign LLC. Thereafter, the NYLTA (as amended) imposes an ongoing requirement to file an annual statement with the New York Department of State confirming or updating (1) the beneficial ownership disclosure information; (2) the street address of the entity’s principal executive office; (3) status as an exempt company, if applicable; and (4) such other information as may be designated by the New York Department of State.

The definitions of important terms such as “exempt company,” “reporting company,” “applicant,” and “beneficial owner” used in the NYLTA refer to the equivalent definitions in the CTA but are limited in application only to LLCs. Correspondingly, the NYLTA shares the same 23 exemptions from the reporting requirements as the CTA. If an LLC falls within one or more of the available exemptions, however, in a departure from the CTA, the NYLTA requires the entity to submit a statement attested to under penalty of perjury indicating the specific exemption(s) for which the LLC qualifies.

Potential penalties for failing to comply with the NYLTA include monetary penalties of $500 for every day that a required filing under the NYLTA is past due, as well as a potential suspension or cancellation of an LLC.

The amendments to the NYLTA also provide that the beneficial ownership information relating to natural persons will be deemed confidential except (1) by written consent of or request by the beneficial owner of the LLC; (2) by court order; (3) to federal, state, or local government agencies performing official duties as required by statute; or (4) for a valid law enforcement purpose. This is in contrast to the original New York statute, which provided for beneficial ownership information to be made publicly available in a searchable database.

© 2024 Blank Rome LLP
For more news on the New York LLC Transparency Act, visit the NLR Corporate & Business Organizations section.

Proposed Amendments to NY Film Production Tax Credit Would Disallow Costs for Artificial Intelligence

Since 2004, New York has provided tax credits to encourage film and television productions located in the state. In its adopted budget for fiscal year 2024, the tax credit program was extended to 2034, and the amount available for the tax credit increased to $700 million. The credit is 30% of “qualified costs” incurred in the production. This tax credit is one of the reasons that New York has remained one of the top filming locations in the United States notwithstanding stiff competition from other states to lure television and film projects.

Subsequently, legislation (S7422A) was introduced that would remove from “qualified costs” used to calculate the tax credit any production that “uses artificial intelligence in a manner which results in the displacement of employees whose salaries are qualified expenses, unless such replacement is permitted by a current collective bargaining agreement in force covering such employees.”

Given that the purpose of the tax credit is to incentivize production and creation of jobs in the state, with the increasing use of artificial intelligence (AI), there is scrutiny of how AI will impact/employment in film and television productions. The legislators were also aware that the use of AI was a major issue in the recent negotiations for contracts with the writers (now settled) and actors (still ongoing as of this date). Consequently, the idea to disincentivize the use of AI that supplants employment by removing the cost of AI from the calculation of the tax credit provides motivation to pursue the proposed legislation in New York’s Legislature.

The goal of removing AI costs from the credit is protecting employment from encroachment by AI, but how the disallowance would be implemented is unclear. For example, if instead of using costumed characters or extensive make-up, a production used computer generated images (CGI), would the cost of the CGI be disallowed? Or if AI were used to write or supplement dialogue, would that call into question those costs for computing the tax credit? How would an auditor reviewing the film credit know and understand where AI is used and whether it actually displaced a human employee? In addition, auditors would have to examine collective bargaining agreements to determine whether “such replacement is permitted by a current collective bargaining agreement in force covering such employees.”

Whether or not S. 7422-A is enacted, the proposal may pique the interest of the other 37 states that have some type of credit for film production. See Film Industry Tax Incentives: State-by-State (2023) | Wrapbook.

©2023 Greenberg Traurig, LLP. All rights reserved.
For more articles on artificial intelligence, visit the NLR Communications, Media and Internet section.

Pay Frequency Claims Pass Muster in New York

After avoiding the limelight for decades, New York State’s manual worker pay frequency law has taken center stage.

Specifically, New York Labor Law (NYLL) § 191(1)(a) requires private employers to pay manual workers weekly, rather than semi-monthly. As we have previously reported, the law is broadly applied to cover not only manual laborers in the traditional sense of the term but to a wide range of physical work, including retail, food preparation, home care, and more.

Ever since a New York appellate court equipped manual workers with a private right of action, pay frequency claims have surged, with recent cases proving difficult for employers to dismiss at the outset. Unless and until a different appellate court reverses course, employers can expect these actions to keep rolling in.

Surge in Claims After Vega

Until recently, enforcement of the pay frequency law was left to the New York Department of Labor (NYDOL), which imposed modest penalties for pay frequency violations. In the 2019 case Vega v. CM & Associates Construction Management LLC, however, a New York Appellate Division Court held that § 191 permits employees to seek liquidated damages for the untimely payment of wages, even if the wages are paid in full. The Vega decision equipped manual workers with a private right of action and spawned an influx of litigation in this area.

Employers that violate the pay frequency law must pay the full amount of unpaid wages and may be liable for liquidated damages equal to 100% of untimely-paid wages, as well as interest, costs, and attorneys’ fees. (Certain employers with at least 1,000 workers may request that the NYDOL grant an exemption to the weekly-pay requirement.) For those covered by the law, New York’s six-year statute of limitations means pay frequency claims could continue to mount.

Manual Workers Defined Broadly

While the NYLL defines “manual worker” as “a mechanic, workingman or laborer,” the NYDOL imposes a more contemporary and expansive definition, interpreting “manual workers” to include those who spend at least 25% of their working time engaged in physical labor. Physical labor can include countless tasks, including stocking shelves, standing or walking for long periods of time, preparing food, styling hair, cleaning a workplace, and providing care for others. Therefore, a wide array of jobs, from retail to home care workers, could be covered under the pay frequency law. Courts undertake factual, case-by-case inquiries to determine whether a plaintiff is considered a manual worker.

Federal Courts Follow Suit

Federal courts in New York have uniformly followed the Vega ruling by allowing claims brought under § 191(1)(a) to proceed. They have rejected arguments that were once thought to be potential hurdles, such as a plaintiff’s lack of standing for failure to identify a concrete harm. Unless and until an appellate court retreats from Vega, pay frequency claims will likely continue to advance through the courts.

To avoid costly litigation, covered New York employers are advised to evaluate whether they employ manual workers as the term is defined by the NYDOL and to consider revising their pay frequency practices as applicable.

© 2023 Foley & Lardner LLP
For more articles on labor law, visit the NLR Labor & Employment section.

New York Adult Survivors Act

New York’s Adult Survivors Act[1] (“ASA” or “the Act”) (S.66A/A.648A) became effective on November 24, 2022. The Act provides a one-year lookback window for people to seek civil remedies for sexual abuse they experienced after they turned 18, regardless of what year the abuse occurred. This law adds critical energy to the ongoing momentum of the #MeToo movement, allowing survivors to file suit against both their abusers and the institutions that enabled them.

The one-year lookback window lasts until November 23, 2023, so as of today, survivors have just over ten months to take advantage of the law. The following guide provides context and recommendations for understanding and using New York’s Adult Survivors Act.

What does the ASA do?

The ASA creates a one-year lookback window for sexual assault survivors to pursue civil claims in court for abuse that may have occurred years earlier, as long as they were over 18 at the time. Previously, a person who experienced sexual abuse only had a few years to file a lawsuit in New York before their claim would be time-barred. This meant that survivors had little time in which to come to terms with the abuse they experienced, find an attorney, prepare a case, and file an action. For those who missed that small window, the ASA reopens the courthouse doors. So until November 23, 2023, whether you experienced abuse in 2015, 2000, or 1985, you can file a claim in court and seek recovery for what happened to you.

What does the law cover?

Sexual offenses covered by the ASA span a wide range of behaviors, including but not limited to forcible touching, rape, sexual assault, sexual misconduct, and other forms of sexual abuse. Not every sexual offense is covered under the ASA,[2] and an attorney can help assess whether your claim falls within its provisions.

Who can you sue?

Another powerful provision of the law is who it allows to be named as a defendant. Survivors are not limited to suing their abusers—they can also hold accountable the institutions that insulated those abusers from justice. These institutions can include entities that had responsibility to keep the survivor safe and to control the actions of the abuser. Claims against the institutions can involve both intentional and negligent acts. If your abuser was part of a larger organization that contributed to or failed to prevent, notice, or stop the abuse, the ASA empowers you to go after that organization.

This provision comes directly from New York’s 2019 Child Victims Act (“CVA”).[3] Over 10,000 people have used the CVA to sue institutions that had a role to play in their abuse, including churches, hospitals, overnight and day camps, and schools. For example, a large number of CVA cases name the Roman Catholic Church and the Boy Scouts of America as institutional defendants. The ASA provides a similar recourse to justice: oftentimes, survivors are subject to abuse by people who hold power over them. For minors, these people could be coaches, religious leaders, teachers, mentors, or other caregivers. For people over 18, those in power may be employers, professors, or community leaders. The ASA enables adult survivors to sue the institutions that gave their abusers power and protected those abusers from answering for their actions.

The institutional defendant provision of the ASA opens significantly larger opportunities for recovery, as institutions oftentimes have deeper pockets than individual abusers. Examples of institutions that could face liability under the ASA include employers, colleges and universities, social organizations such as fraternities and sororities, medical practices, and facilities that house people with disabilities. Any entity that knew about or should have known about and stopped the abuse could be on the hook.

Who is it for?

The ASA opens the courts to people who were over the age of 18 when they experienced sexual abuse but are otherwise unable to file due to missing the statute of limitations. You can use the ASA even if you have previously tried to file but had your suit dismissed as untimely.[4]

It is important to note that if you have resolved or released your claims through a settlement process, you may not file under the ASA. For example, the nearly 150 women who received payment from a settlement with Columbia University Irving Medical Center and New York Presbyterian Hospital based on sexual abuse by Dr. Robert Hadden cannot use the ASA to file new suits as their claims have been fully resolved.

Why do we need this?

The Adult Survivors Act is a game-changer for people who were previously unable to file claims for sexual abuse due to a short statute of limitations. In 2019, New York extended the statute of limitations for certain civil lawsuits related to sex crimes from five to 20 years. But that law did not apply retroactively, so survivors who experienced abuse just a few years prior were still barred from seeking justice.

The ASA honors the lived reality of sexual abuse. Like the CVA before it, the ASA recognizes sexual abuse can take years to process, and those years often extend far beyond the short filing windows New York historically placed on these types of claims.

Survivors have many reasons for waiting to come forward with claims of sexual abuse. Some face retaliation by their abusers, some fear the risk of community backlash, and others lack the resources to seek legal representation. Finally, “[t]rauma takes time,” as New York State Senator and ASA champion Brad Hoylman said when promoting the then-bill. Many sexual assault and sexual abuse survivors need years to process what they endured. This can be particularly true when an abuser uses power, manipulation, or threats to coerce submission to sexual contact, a common tactic of notorious abusers Harvey Weinstein, Kevin Spacey, and Dr. Robert Hadden. Understanding the event as sexual abuse, reconciling yourself with your experience, and deciding how to move forward can take decades. The ASA is an effort to respect this process and empower survivors to hold their abusers accountable.

Why would I file a lawsuit about what happened to me?

For many people, surviving sexual abuse is not something that can be “fixed” by any kind of legal action. But the remedies available through civil suits can serve as a proxy for some measure of justice, and that proxy can enable survivors to move forward.

Successful ASA plaintiffs can recover economic, compensatory, and punitive damages from both the individual abuser and the institution. Many survivors suffer financial loss in addition to the mental, emotional, and physical harm of the abuse itself. If your boss sexually harasses you and then terminates you when you protest, you may find yourself without an income. If a classmate assaults you, you may forfeit tuition money after deciding to leave campus for your safety. Civil courts can make you financially whole and further compensate you for the pain of the experience and the efforts you must make to heal. Courts can also provide other remedies, requiring the people who perpetrated or allowed abuse to do or stop certain behaviors, thereby protecting other potential future targets of abuse and assault.

How do I use the ASA?

The first thing you should do is consult an attorney. These cases can be complicated, and plaintiffs still maintain the burden of proof, so you want the expertise of an experienced lawyer. There are several firms that regularly bring these kinds of actions, and many will provide you with a free consultation. If you decide to move forward with your case after a consultation, your attorney will work with you to determine the best strategy. This strategy may include going to court, or it may involve seeking a resolution that works for you outside of court.

As you go through the process of finding an attorney, please know that you deserve counsel that is compassionate, knowledgeable, and focused on your needs and interests as a client. This is about what happened to you, and your attorney is there to guide you. You should feel heard, understood, and respected.

When do I need to file?

You must file your claim by November 23, 2023.

While the ASA is a powerful effort by New York to support the rights of sexual abuse survivors, it is time-limited. November 23, 2023 is the cutoff date for filing a claim, but if you are interested in seeking recovery under the Act, you should take action now. It may take time to find the right attorney for you, and your lawyer will need additional time to put together your case. If you and your lawyer decide to pursue a resolution without going to court, that process could take even longer.

Ten months sounds like a long time, but in the legal world, it can move very quickly. Start considering whether you want to take advantage of the ASA and reach out to an attorney as soon as possible.

What happens after I file?

This will come down to conversations you have with your attorney. Filing is the first major step in the process. Following that process through might include discovery, more court filings, and hearings before a judge or a jury.

What else should I consider?

Take care of yourself as you think about your next steps. Reach out to trusted loved ones and mental health professionals. It is critical that you ground yourself in what is best for you.

FOOTNOTES

[1] New York Governor Kathy Hochul signed the ASA into law on May 24, 2022. The ASA passed the New York Assembly by a majority vote of 140 in favor to 3 against after receiving unanimous support in the state Senate one month prior.

[2] Article 130 of the New York Penal Law lists offenses covered under the ASA.

[3] The CVA came into effect in 2019, providing a two-year lookback window for people who experienced abuse as minors. The CVA amends N.Y. C.P.L.R. § 208 (2019) and allows victims to initiate civil action against their abusers and enabling institutions. As to victims where civil actions were barred before the CVA took effect, N.Y. C.P.L.R. 214-g (2020) creates a lookback period to file a claim. Since 2019, over 10,000 people have filed lawsuits in New York against abusers and the institutions that protected them.

[4] The ASA can revive your claim only if it was dismissed for failure to file by the statutory deadline. If your claim was dismissed for other reasons, this law cannot fix that.

For more labor and employment news, click here to visit the National Law Review. 

Katz Banks Kumin LLP Copyright ©

New York HERO Act Enhanced Workplace Safety Committee Enforcement Provisions Enacted

On December 28, 2022, New York Governor Kathy Hochul signed into law Senate Bill 9450, which added new enforcement provisions to the New York Health And Essential Rights Act’s (NY HERO Act) workplace safety committee requirements. The new law went into effect immediately upon the Governor’s signature.

As a reminder, the NY HERO Act was enacted in response to the COVID-19 pandemic. Section 1 of the NY HERO Act required employers to adopt and distribute an infectious disease exposure prevention plan (“safety plan”) and activate such safety plan upon the designation of an airborne infectious disease as a highly contagious communicable disease that presents a serious risk of harm to the public health. While no current designation is in effect (the designation of COVID-19 ended on March 17, 2022), employers should be prepared to activate their safety plan in the event of a designation, and should review their existing safety plan periodically for any updates as required by the NY HERO Act.

Section 2, the often-overlooked portion of the NY HERO Act, provides employees the right to establish and administer a joint labor-management workplace safety committee. The recent law adds new enforcement provisions, and serves as an amendment to this section of the NY HERO Act. It requires employers to recognize workplace safety committees formed by employees pursuant to the NY HERO Act within five business days of receiving a request from employees for committee recognition. Failure to do so will result in penalties of $50 a day until the violation is remedied. Previously, there was no explicit timeframe required for employers to recognize a workplace safety committee and no related specific civil penalties.

While the New York Department of Labor has issued FAQ guidance related to Section 1 of the NY HERO Act, the new law is the first development or update regarding Section 2 since the NY HERO Act was enacted and subsequently amended.

The new law serves as a reminder that the NY HERO Act, and, relatedly, COVID-19’s impact on the workplace, are not completely in the rearview mirror. Employers should confirm their compliance with the NY HERO Act by:

  • evaluating their existing safety plans and revising or updating them as needed;
  • distributing their safety plans to all new hires;
  • including their safety plans in all updated handbooks;
  • ensuring their safety plans are posted in a visible and prominent location in the workplace; and
  • reviewing the workplace safety committee obligations and requirements, especially in light of the added enforcement provisions.

Article By Susan Gross Sholinsky, Steven M. Swirsky, Robert J. O’Hara, Nancy Gunzenhauser Popper, and Christopher Shur of Epstein Becker & Green, P.C.

For more labor and employment legal news, click here to visit the National Law Review.

©2023 Epstein Becker & Green, P.C. All rights reserved.

NYC Issues Proposed Rules for Its Automated Employment Decision Tools Law

On Friday, September 23, 2022, the New York City Department of Consumer and Worker Protection (“DCWP”) released a Notice of Public Hearing and Opportunity to Comment on Proposed Rules related to its Automated Employment Decision Tool law (the “AEDT Law”), which goes into effect on January 1, 2023. As we previously wrote, the City passed the AEDT Law to regulate employers’ use of automated employment decision tools, with the aim of curbing bias in hiring and promotions; as written, however, it contains many ambiguities, which has left covered employers with open questions about compliance.

The proposed rules are intended to clarify the requirements for the use of automated employment decision tools within New York City, the definitions of key terms in the AEDT law, the notices to employees and applicants regarding the use of the tool, the bias audit for the tool, and the required published results of the bias audit.

The DCWP’s public hearing on the proposed rules and deadline for comments are October 24, 2022. Although the proposed rules may be modified prior to adoption, the following summarizes the key provisions.

“Substantially assist or replace discretionary decision making”

The AEDT Law applies to an automated decision tool that is used “to substantially assist or replace discretionary decision making.” It does not, however, specify the type of activities that constitute such conduct or what particular AI-powered employment tools are covered by the law.

The proposed rules attempt to provide guidance on this issue by defining “substantially assist or replace discretionary decision-making” as one of the following actions:

  1. relying solely on a simplified output (score, tag, classification, ranking, etc.), without considering other factors; or
  2. using a simplified output as one of a set of criteria where the output is weighted more than any other criterion in the set; or
  3. using a simplified output to overrule or modify conclusions derived from other factors including human decision-making.

“Bias Audit”

Pursuant to the AEDT Law, before using an automated employment decision tool, a covered employer or employment agency must subject the tool to a “bias audit” no more than one year prior to the use of the of the tool.  The law explains that “bias audit” means an “impartial evaluation by an independent auditor,” but does not otherwise specify who or what constitutes an “independent auditor” or what the “bias audit” must contain. The proposed rules address these gaps.

First, the proposed rules define “independent auditor” as “a person or group that is not involved in using or developing an [automated employment decision tool] that is responsible for conducting a bias audit of such [tool].” This definition does not specify that the auditor must be a separate legal entity from the creator or vendor of the tool and therefore suggests that it may be acceptable for the auditor to be employed by the organization using the tool, provided the auditor does not use and has not been involved in developing the tool.

Second, the proposed rules state that the required contents of a “bias audit” will depend on how the employer or employment agency uses the tool.

If the tool selects individuals to move forward in the hiring process or classifies individuals into groups, the “bias audit,” at a minimum, would need to:

  1. calculate the selection rate for each category;
  2. calculate the impact ratio for each category; and
  3. where the tool classifies candidates into groups, the bias audit must calculate the selection rate and impact ratio for each classification.

If the automated employment decision tool merely scores candidates, the “bias audit” at a minimum, would need to:

  1. calculate the average score for individuals in each category; and
  2. calculate the impact ratio for each category.

The preamble to the proposed rules makes clear that DCWP intends these calculations to be consistent with the Uniform Guidelines on Employee Selection Procedures (“UGESP”), 29 C.F.R. § 1607.4, and borrows concepts from the framework established by the UGESP in the definitions of “impact ratio” and “selection rate.”

Under the AEDT Law, upon completion of a bias audit, and prior to using the automated employment decision tool, covered employers and employment agencies must make the date and summary of the results of the bias audit publicly available on the careers or job section of their website in a clear and conspicuous manner. The proposed rules clarify that publication may be made via an active hyperlink to a website containing the required information, as long as the link is clearly identified as linking to the results of the bias audit. The required information must remain posted for at least six months after the covered employer or employment agency uses the tool for an employment decision.

Required Notices

The AEDT Law also specifies that employers and employment agencies must notify candidates for employment and employees who reside in New York City as follows:

  1. at least ten business days prior to using an automated decision tool, that such a tool will be used to assess or evaluate the candidate or employee, and allow the individual to request an alternative selection process or accommodation;
  2. at least ten business days prior to use, the job qualifications and characteristics that the tool will use in the assessment or evaluation; and
  3. if not disclosed on the employer or employment agency’s website, information about the type of data collected for the tool, the source of such data, and the employer or employment agency’s data retention policy shall be available upon written request by the individual and be provided within thirty days of the written request.

Covered employers and employment agencies have expressed concern about the practical and administrative difficulties of providing the above notices in the fast-paced environment of today’s recruiting and hiring.

In apparent response to these concerns, the proposed rules clarify that the employer or employment agency may provide the notices required by paragraphs (1) and (2) by:

  1. (a) in the case of candidates, including notice on the careers or jobs section of its website at least ten business days prior to the use of the tool, and (b) in the case of employees, including notice in a written policy or procedure that is provided to employees at least ten business days prior to use;
  2. including notice in a job posting at least ten days prior to using the tool; or
  3. (a) in the case of candidates, providing notice via U.S. mail or email at least ten business days prior to use of the tool; and (b) in the case of employees, providing written notice in person, via U.S. mail, or email at least ten business days prior to use.

In short, under the proposed rule, an employer or employment agency could comply with the AEDT Law by providing the required notice when first posting the job.

With respect to the notice requirement in paragraph (3), the proposed rules state that an employer or employment agency must provide notice to covered individuals by including notice on the careers or jobs section of its website, or by providing written notice in person, via U.S. mail, or by email within 30 days of receipt of a written request for such information. If notice is not posted on the website, the employer or agency must post instructions for how to make a written request for such information on its careers or job section of the website.

Finally, although the AEDT Law requires an employer or employment agency to allow covered individuals to request an alternative selection process, the proposed rules state that nothing requires an employer or employment agency to provide an alternative selection process.

Article By Adam S. Forman, Nathaniel M. Glasser, Robert J. O’Hara, Alexander J. Franchilli, and Ridhi D. Madia of Epstein Becker & Green, P.C.

For more labor and employment legal news, click here to visit the National Law Review.

©2022 Epstein Becker & Green, P.C. All rights reserved.

NYS Sexual Harassment Hotline Goes Live

Effective July 14, 2022 (pursuant to legislation amending the New York State Human Rights Law that was signed by New York State Governor Kathy Hochul in March 2022), New York established a telephone hotline that employees can use to report incidents of sexual harassment to the New York State Division of Human Rights.   The hotline number is 800-HARASS-3 ((800) 427-2773) and will be staffed, on a pro bono basis, by NYS attorneys who have expertise in employment law and sexual harassment issues.  The hotline can be called Monday through Friday, 9:00 a.m. to 5:00 p.m.

Because, under the law, information about the hotline must be contained in workplace policies and postings about sexual harassment, employers need to revise their anti-harassment policies promptly to include this information.

Article By Jonathan A. Wexler of Vedder Price

For more labor and employment legal news, click here to visit the National Law Review.

© 2022 Vedder Price

Are You Being Served? Court Authorizes Service of Process Via Airdrop

In what may be the first of its kind, a New York state court has authorized service via token airdrop in a case regarding allegedly stolen cryptocurrency assets. This form of alternative service is novel but could become a more routine practice in an industry where the identities of potential parties to litigation may be difficult to ascertain using blockchain data alone.

Background on the Dispute

According to the Complaint in the case, the plaintiff LCX AG (“LCX”) is a Liechtenstein based virtual currency exchange. As alleged in the Complaint, on or about January 8, 2022, the unknown defendants (named in the Complaint as John Does 1-25) illegitimately gained access to LCX’s cryptocurrency wallet and transferred $7.94 million worth of digital assets out of LCX’s control. Cryptocurrency wallets are similar in many ways to bank accounts, in that they can be used to hold and transfer assets. In the same way a thief can transfer funds from a bank account if they gain access to that account, thieves can also transfer cryptocurrency assets if they gain access to the keys to the wallet holding digital assets.

Following the alleged theft, LCX and its third-party consulting firm determined that the suspected thieves used “Tornado Cash,” which is a “mixing” service designed to hide transactions on an otherwise publicly available blockchain ledger by using complicated transfers between unrelated wallets. While Tornado Cash and other mixing services have legal purposes such as preserving the anonymity of parties to legitimate transactions, they are also utilized by criminals to launder digital funds in an illicit manner.

Even the use of these mixing services, however, can often also be unwound. This is especially true in transactions of large amounts of cryptocurrency, similar to how transactions utilizing complex money laundering schemes in the international banking system can be unwound. According to the blockchain data platform Chainalysis, although Illicit crypto transactions reached an all-time high of $14 billion in 2021, these suspected nefarious transactions accounted for 0.15% of crypto volume last year, down from 0.62% in 2020.

While the Complaint alleges the suspected thieves used Tornado Cash, LCX believes its hired consultants were able to unwind those mixing services to identify a wallet which is alleged to still hold $1.274 million of the allegedly stolen assets.

Unlike bank accounts which have associated identifying information, there are often no registered addresses or other identifying information connected to digital wallets. This makes it difficult to provide the actual proof of service required to institute an action or obtain a judgement against an individual where the only known information is their digital wallet addresses. Service via token airdrop into those wallet addresses solves that issue.

Service Via Airdrop

Service of lawsuits is traditionally made on the defendant personally at a home or business address via special process servers. In cases where service on the individual is not possible for some reason, many states authorize alternative means of service if the plaintiff can show that the alternative means of service likely to provide actual notice of the litigation to the defendant. For example, courts have historically allowed notice via newspaper publication as an alternative means of service where the defendant cannot be serviced personally.

Here, the Court permitted service via “airdrop” in which a digital token is placed in a specific cryptocurrency wallet, similar to how a direct deposit can place funds in a traditional bank account. This particular token contained a hyperlink to the associated court filings in the case, and a mechanism which allowed the data of any individual who clicked on the hyperlink to be tracked. While this is a novel way to serve notice of a lawsuit, similar airdrops have been used to communicate with the owners of otherwise anonymous cryptocurrency wallet owners. Such was the case recently when actor Seth Green had his Bored Ape non-fungible token (“NFT”) stolen and the unknowing buyer of the stolen NFT was otherwise difficult to locate.

While this type of digital service is new, it could be implemented in many disputes in the future regarding digital assets. Similar to the authorization of service that was seen recently in the Facebook Biometric Information Privacy Act litigation (where notice was served on potential class members via email and directly on the Facebook platform), service via airdrop may be the most efficient way to inform potential lawsuit participants of the pending dispute and how they can protect their rights in that dispute.

This type of airdropped service is not without issues, though. First, transactions on the blockchain are largely publicly available, meaning any individual with the wallet address would also be able to see service of the lawsuit notice. Additionally, many users are hesitant to click on unknown links (such as the one in the airdropped LCX) due to legitimate cybersecurity concerns.

While service via airdropped token is unlikely to replace traditional methods of service, it may be a useful means of serving process on unknown persons where there is a digital wallet linked to the acts which the applicable lawsuit relates.

Article By Bryan M. Westhoff, Daniel L. McAvoy, and Jonathan E. Schmalfeld of Polsinelli PC

For more litigation legal news, click here to visit the National Law Review.

© Polsinelli PC, Polsinelli LLP in California