New York City Employers Will Soon Be Required To Approve Work Schedule Changes At Their Employees’ Request

On December 19, 2017, the New York City Council passed a bill requiring employers to grant employee requests for “temporary changes” to work schedules for “personal events.”  This bill takes effect on July 18, 2018.

What qualifies as a “personal event” triggering a mandatory schedule change? – “Personal events” requiring a schedule change include:

  • When the employee is a caregiver who provides direct and ongoing care to a “care recipient,” and needs a temporary schedule change to provide this care. A “care recipient” under the bill is defined as a minor child or a disabled family or household member who relies on the employee for medical care or to meet the needs of daily living;
  • When the employee needs the temporary schedule change to attend a legal proceeding or a hearing for government assistance benefits, to which the employee, the employee’s family member or a “care recipient” is a party; or
  • Circumstances that qualify for sick time use under the New York City’s Earned Sick Time Act.

How many “temporary changes” are employees entitled to? – Eligible employees are entitled to two “temporary changes” to their work schedules in a calendar year, for up to one business day per request.  The employer may allow the employee to use two business days for one request, in which case it need not grant a second request.

What constitutes a “temporary change”? – A “temporary change” is defined as “a limited alteration in the hours or times that or locations where an employee is expected to work.”  A temporary change can include paid or unpaid time off, working from home, or changing work hours.

Who is eligible? – All non-government employees who work full time or part time within New York City for 80 or more hours per calendar year, and who have worked for the employer for more than 120 days.

Who is not eligible?

  • Employees covered by a collective bargaining agreement that expressly waives the provisions of the bill and addresses temporary work schedule changes; and/or
  • Certain employees whose jobs and whose employer’s primary business involves the development, creation or distribution of movies, TV programs or live entertainment presentations. Exceptions to this category apply.

What are the employee’s notice requirements? – To properly request a “temporary change” to his or her work schedule, an eligible employee must:

  • Notify his employer or direct supervisor immediately upon learning of the employee’s need for the change;
  • Propose a temporary change, unless the employee seeks unpaid leave; and
  • Reduce his notification and proposal (if required) to writing no later than the second business day after he returns to work. The employer may permit the employee to satisfy this writing requirement by any electronic means (g., email or text message) commonly used by employees to request and manage time off or schedule changes.

What are the employer’s obligations? The employer must respond immediately to a request for a temporary schedule change by indicating:

  • Whether the employer will grant the proposed temporary change, or, alternatively, will grant the change as unpaid leave;
  • The reason for denying the request; and
  • How many temporary change requests and business days to fulfill such requests the employee has left in the calendar year.

The employer’s response must be reduced to writing no later than 14 days following the request.

How does NYC’s temporary work schedule change bill interact with the New York City Earned Sick Time Act? – The New York City Earned Sick Time Act generally provides employees up to 40 hours of paid sick leave per calendar year.  Employees who are eligible for a temporary work schedule change under this bill need not exhaust their earned paid sick time before requesting such changes. In addition, any unpaid leave granted for personal events under this bill does not count toward the obligation to provide earned paid sick leave pursuant to the Earned Sick Time Act.

For more information about how this new bill affects your company or how your company can effectively implement it into its existing practices and procedures, please contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group, at jpetrella@nullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

DACA Program Preoccupies Courts and Confounds Congress

Since September 2017 when the Trump Administration announced the termination of the Deferred Action for Childhood Arrivals Program (DACA), litigation and Congressional inertia have contributed to the creation of an uncertain future for DACA Program enrollees. On January 9, a federal district court enjoined the Administration from ending DACA on March 5, 2018, and at least until the case makes its way through litigation. This decision prompted the U.S. Citizenship and Immigration Services to restart the DACA program, which currently means that DACA program enrollees whose status expired on or after September 5, 2016 may now file a renewal application. Further, DACA program enrollees whose DACA status expired or terminated prior to September 5, 2016 may file new DACA applications. The order does not, however, allow new applications by persons who never had DACA status and does not permit persons in the DACA Program to travel outside the U.S. in advance parole status.

The Department of Justice appealed the federal court’s order, and the U.S. Supreme Court has agreed to hear the Justice Department’s appeal on an expedited basis, which allows the Court to issue a decision by mid-February. The Court also ruled that the Department of Homeland Security is not required to turn over documents relating to the Administration’s decision to end DACA, at least for now.

Meanwhile, the Second Circuit Court of Appeals is reviewing an order by a federal district court in Brooklyn that allows the court to review the Administration’s decision to terminate the DACA program.

While these DACA program-related cases proceed through the courts, Congress is attempting to legislate a resolution. A bipartisan group of Senators sent a DACA proposal to the President who rejected it, reportedly because it failed to end the family preferences provisions of current immigration law Most recently, 30 Democrats joined their Republican counterparts to end a three-day government shutdown by passing a temporary spending bill, but failed to negotiate a deal on DACA.  Senate Majority Leader Mitch McConnell committed to bring a DACA bill to the Senate floor if DACA and border security legislation has not been passed by the Senate by February 8 when the current funding legislation expires.

For questions about the DACA Program and how it could affect your employees and your business, contact Patrick W. McGovern, Esq., Partner in the firm’s Immigration Law Practice Group, at pmcgovern@nullgenovaburns.com, or by phone at 973-535-7129.

New Jersey Governor Phil Murphy Signs First Executive Order for Equal Pay and Gender Equality

In his first official act as Governor of the State of New Jersey, Governor Phil Murphy issued an Executive Order on January 16, 2018 promoting equal pay for equal work in New Jersey. The Executive Order, which is set to take effect February 1, 2018, provides that all New Jersey workers should be compensated based on their work and the services they provide, regardless of gender. The Executive Order further states that currently, women of all ethnicities in New Jersey who hold full-time, year-round jobs are paid less than men in those same positions.

Fulfilling a campaign promise and following in the footsteps of other states and major cities around the country, the Governor’s Office seeks to fix this wage gap in various ways. Since asking for prior compensation information can be part of the application process, the Executive Order directs that no State entity is permitted to ask employment applicants about their current or previous salaries until after a conditional offer of employment has been made. In the event an applicant refuses to volunteer such information, that refusal cannot be considered in employment decisions. If a State entity does have a job applicant’s compensation information, that information cannot be used in an employment decision. Further, the Executive Order provides that State entities can only request and verify current or previous compensation information prior to a conditional offer of employment if such information was voluntarily provided or if verification is required by federal, state, or local law.  A “State entity” is definied in the Executive Order as “any of the principal departments in the Executive Branch of State government and any agency, authority, board, bureau, commission, division, institution, office, or other instrumentality within or created by any such department, and any independent State authority, commission, instrumentality, or agency over which the Governor exercises executive authority, as determined by the Attorney General.”

To enforce this Executive Order, the Governor’s Office of Employee Relations is tasked with overseeing the implementation and training of staff at State entities so that they can comply. For those who are improperly asked about their salary history, such violations can be reported to the Governor’s Office of Employee Relations. Reporting such violations to the Governor’s Office of Employee Relations is the sole remedy, as the Executive Order does not create a private right of action for employees or prospective employees in the event they are improperly asked about their salary history.

Although the Executive Order only impacts State entities, Governor Murphy indicated that he would make it state law if the Legislature presents him with a bill extending these protections to private businesses.  California, Massachusetts, Delaware, Oregon, and several other U.S. cities, including New York City, Philadelphia, and San Francisco, have all enacted policies that prohibit employers from asking about prospective employees’ salary histories.

For more information regarding the potential impacts of this Executive Order and how to implement nondiscriminatory pay practices, please contact Dina M. Mastellone, Esq., Director of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com or 973-533-0777.

NJLAD Amendment to Protect Nursing Mothers in the Workplace

Since 2010, the Fair Labor Standards Act (“FLSA”) requires employers to provide reasonable break times for nursing mothers to express breast milk.  These break times must be provided for up to 1 year after the birth of the child.  On January 8, 2018, New Jersey’s Law Against Discrimination (“NJLAD”) was amended to include a similar requirement.  The NJLAD now requires all New Jersey employers to provide lactation breaks, regardless of the employer’s size and number of employees.

This new amendment to the NJLAD makes it a civil rights violation for an employer to terminate or discriminate against a female employee who breastfeeds or pumps milk on the job. The amendment also imposes a reasonable accommodation requirement, where employers must reasonably accommodate employees with daily break times and a suitable room or other location with privacy so that she can express breast milk for her child. This room must be in close proximity to the employee’s working area. However, it is not required that these breaks be paid, unless the employee is already compensated for breaks. While the FLSA requires that employers allow this accommodation for up to a year after the child’s birth, the new NJLAD amendment does not include any time restriction.

These requirements are effective immediately, unless the employer can demonstrate that providing the accommodation would pose an undue hardship on its operations. Factors to consider when deciding whether providing the accommodation would cause an undue hardship include: the number of employees, the number and type of facilities, the size of the budget, the nature and cost of the accommodation needed, and the extent to which the accommodation would involve waiver of an essential requirement of a job.

For more information about how these new requirements affect your company, please contact Dina M. Mastellone, Esq., Chair of the firm’s Human Resource Training & Audit Programs Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

Republican Majority at NLRB Brings Important Pro-Employer Decisions

The recent, temporary Republican majority at the NLRB brought several important changes to Board decisions issued during the Obama Administration. In early December Republican appointees of President Trump briefly held a majority of the seats on the Board. This status continued until December 16 when Board Chairman Miscimarra’s resignation took effect. However, in the weeks leading up to Miscimarra’s resignation, the three Republican Board members penned pro-employer decisions that for the most part return to Board precedent in effect prior to 2009. On December 22, 2017, President Trump appointed Board Member Marvin E. Kaplan as Acting Board Chairman. The President is expected to nominate management labor attorney John Ring to fill the vacancy created by Miscimarra’s resignation. But before Miscimarra exited, the Republican-majority issued several decisions that rolled back prior Board precedent and set the stage for more pro-employer decisions. A few examples are as follows.

On December 14, the Board issued two decisions, Boeing Co. and Hy-Brand Industrial Contractors, that address facially neutral workplace rules and the joint employer standard.  In Boeing, the Board revisited the 13-year old Lutheran Heritage standard which held that an employer that maintains a facially neutral workplace rule commits an unfair labor practice if an employee would reasonably construe the rule as prohibiting Section 7 activity. In Boeing, the company issued a workplace rule that prohibited cameras at work. The Board held that the Lutheran Heritage standard, under which the anti-camera rule was unlawful, failed to consider legitimate justifications for the polices, rules, and handbook provisions challenged. The Board found it particularly problematic that prior decisions applying the Lutheran Heritage standard found unlawful employer directives that employees “work harmoniously” and conduct themselves in a “positive and professional manner.”  In Boeing the Board announced it will now apply a two-pronged test that considers (i) the nature and extent of the rule’s potential impact on employee Section 7 rights and (ii) the employer’s legitimate justifications for the rule.

Also on December 14 the Board overruled the joint employer standard announced in its 2015 Browning-Ferris decision, which decreed that “even when two entities have never exercised joint control over essential terms and conditions of employment, and even when any joint control is not ‘direct and immediate,’ the two entities will still be joint employers based on the mere existence of ‘reserved’ joint control, or based on indirect control or control that is ‘limited and routine.’” In Hy-Brand Industrial Contractors, the Board held that a finding of joint employer status now requires proof that putative joint employers have actually exercised control over essential employment terms, and that the control is direct and immediate, not limited or routine.

On December 15, Miscimarra’s last day on the job, the NLRB issued two more pro-employer decisions — Raytheon Network Centric Systems and PCC Structurals, Inc.  In Raytheon, the Board revisited the Supreme Court’s 1962 decision in NLRB v. Katz and the case law applying Katz. The Court in Katz held that Section 8(a)(5) of the Act prohibits employers from making a change in mandatory bargaining subjects unless the employer gives the union advance notice and an opportunity to bargain over the proposed change. Later NLRB case law held that an employer may lawfully take unilateral action so long as it “does not alter the status quo.”  Raytheon provided an opportunity for the Board to clarify what constitutes a “change” from the “status quo” and to revisit the Board’s 2016 holding in E.I. du Pont de Nemours which re-defined what constitutes a “change” requiring notice to the union and bargaining prior to implementation. In DuPont the Board ruled that even if an employer continued to do precisely what it did for decades pursuant to a CBA, and even if the CBA permitted the employer’s past actions, once the CBA expires, taking the same action constitutes a “change.” Furthermore, if the employer’s action involved discretion and the employer took discretionary action, under DuPont this exercise of discretion was a “change.” In Raytheon the Board overruled DuPont as fundamentally flawed. The Board concluded that “an employer’s past practice constitutes a term and condition of employment that permits the employer to take actions unilaterally that do not materially vary in kind or degree from what has been customary in the past.” In Raytheon the Board held that since the employer routinely changed its employees’ benefits, premiums, deductibles, and copayments for health insurance in the past, Raytheon did not violate the Act when it made similar changes after the CBA expired. The Board held that its decision applied retroactively, but also cautioned this its holding had no effect on a union’s right to demand bargaining over mandatory bargaining issues.

On December 15 the Board returned to the prior standard for determining when a proposed unit is appropriate for collective bargaining. PCC Structurals Inc. The Board overruled its 2011 decision in Specialty Healthcare & Rehabilitation Center of Mobile and returned to its prior “community of interests” standard. The Board criticized the Specialty Healthcare standard for transferring too much responsibility from the Board to the organizing parties and deferring to the petitioned-for unit in all but a few narrow, highly unusual circumstances. In reverting to the community of interests standard, the Board stated, “It is the Board’s responsibility to determine unit appropriateness based on a careful examination of the community of interests of employees both within and outside the proposed unit.” Accordingly, employers will have greater participation in the determination of an appropriate unit for a union election. Conversely, union organizers are expected to have less success in gerrymandering the unit to conform to the employee groups they are targeting.

More pro-management changes are expected once the fifth Board member is confirmed. For example, the Board may revisit its blocking charge policy, which delays a union decertification election when a union files an unfair labor practice charge and essentially keeps the employees in the union until the election occurs, regardless of the charge’s merits.

For more information about how the changes at the NLRB affect unionization efforts at your company or your company’s implementation of work rules, policies or procedures, please contact one of the partners in the firm’s Labor Law Practice Group — James J. McGovern III, Esq., at jmcgovern@nullgenovaburns.com, Patrick W. McGovern, Esq., at pmcgovern@nullgenovaburns.com, Douglas E. Solomon, Esq. at dsolomon@nullgenovaburns.com, or John R. Vreeland, Esq., at jvreeland@nullgenovaburns.com  — or call us at 973-533-0777.

NYS Attorney General Issues Guidance on Preventing & Correcting Sexual Harassment in the Workplace

On December 6, 2017, amidst the recent barrage of publicized sexual harassment and sexual assault allegations made against various news organizations, politicians, and Hollywood elite, New York State Attorney General Eric T. Schneiderman released “Know Your Rights” guidance on sexual harassment in the workplace.  The purpose of the guidance is to inform New Yorkers about the laws that protect them from sexual harassment at work and to provide victims of sexual harassment with information on the appropriate agencies to consult should they seek to file a complaint or take legal action, along with helplines for further support.  The guidance highlights the following:

Sexual Harassment Defined – Sexual harassment occurs when unwelcome conduct of a sexual nature is used as the basis for making employment decisions, like hiring or firing, or is so frequent or severe that it creates an intimidating, hostile, or offensive work environment.

  • The conduct can be verbal, visual and/or physical, such as unsolicited sexual advances, sexually offensive remarks or jokes, comments about a person’s gender or sexual orientation or preferences, unwanted touching, and sexually suggestive gestures.
  • Sexual harassment can be committed by a supervisor, co-worker, or third-party vendor/customer/client who comes into the workplace.
  • Protections apply to both men and women, and same sex harassment is prohibited, regardless of sexual orientation.

Avenues of Relief – Laws prohibiting sexual harassment include Title VII of the Civil Rights Act (“Title VII”), the New York State Human Rights Law (“NYSHRL”), and the New York City Human Rights Law (“NYCHRL”).  The scope and procedure for filing complaints differ under each law.

  • Those who feel they have been the victim of, or who have observed sexual harassment should first report it to his/her employer pursuant to the employer’s internal policies. Individuals may also consult an attorney to determine whether to file a complaint with a government agency or a lawsuit in state or federal court.
  • Agencies who handle sexual harassment complaints include the New York State Office of the Attorney General Civil Rights Bureau (“OAG”), the New York State Division of Human Rights (“NYSDHR”), and the Equal Employment Opportunity Commission (“EEOC”).
    • The OAG represents the People of New York (not the individual complaining party) when it discovers evidence of a pattern, practice, or policy of sexual harassment.
    • The NYSHRL allows individuals to file a complaint against employers of any size with the NYSDHR or proceed directly to court.
    • Sexual harassment complaints under Title VII may only be brought against employers with more than 15 employees and must be filed first with the EEOC before commencing a lawsuit.

No Retaliation – The law also prohibits retaliation against anyone who has filed a complaint about sexual harassment in the workplace.

Criminal Liability – Sexual harassment may constitute a crime, under theories of stalking and/or assault.

Sexual harassment in the workplace is a serious problem that affects many employees and organizations.  As stated by A.G. Schneiderman, “We all have a stake in preventing [sexual harassment] and stopping it when it happens.”  Addressing sexual harassment in the workplace provides a benefit to employees and employers alike.  Employees have a right to feel secure in the workplace, and employers can have liability in situations where harassing behaviors is permitted whether by supervisors, subordinates, peers, customers, vendors, and contractors. Employers can reduce the risks of claims of sexual harassment in the workplace by arming its employees with tools to deal with inappropriate workplace behavior and sexual harassment allegations.  This includes a well-crafted sexual harassment prevention and complaint policy and routine training for managers and supervisors.

For more information about how anti-harassment laws affect your company or how your company can effectively prevent and address complaints of sexual harassment, please contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group, at jpetrella@nullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

Third Time’s The Charm for Trump Travel Ban

On December 4 the U.S. Supreme Court cleared the way for the third version of President Trump’s travel ban to take effect, staying injunctions handed down by two U.S. District Courts in October. The Administration’s latest travel ban indefinitely suspends travel to the U.S. by nationals of Somalia, Syria, Libya, Iran, Yemen, North Korea, and Chad and certain officials of the Venezuelan government. Justices Ginsberg and Sotomayor dissented from the Court’s decision.

In two separate orders, the Court stayed injunctions granted by the Courts in Hawaii and Maryland. On October 17 the Maryland District Court issued a nationwide injunction blocking implementation of the ban, finding a likelihood of success on claims that the ban exceeds the President’s authority under the Immigration and Nationality Act (INA) and violates the Establishment Clause. The injunction protected only individuals with a bona fide relationship with a person or entity physically located in the U.S., such as immediate family members, and did not block the restrictions on U.S. entry by North Koreans and Venezuelans.

Three days later, the District Court in Hawaii issued a nationwide temporary restraining order finding a likelihood that the Plaintiffs would prevail on their claims under the INA. While the Court completely enjoined implementation of the ban with respect to persons traveling from the six Muslim majority countries, in November the Ninth Circuit pared the TRO back to protect only those with a bona fide relationship with a person or entity in the U.S. This includes “close familial relationships” which, according to the Ninth Circuit, include grandparents, grandchildren, brothers-in-law, sisters-in-law, aunts, uncles, nieces, nephews, and cousins.

In the latest development, the Trump administration argued to the Supreme Court that the third version of the ban is the result of an extensive review process designed to ensure that foreign national travelers do not pose a risk to national security. The Administration contends that anything but a complete stay of the lower court orders would undermine national security since “most immigrant-visa holders have a bona fide relationship with a person or entity in the United States.”

The Supreme Court apparently agreed, reconsidered its analysis of the prior version of the travel ban, and allowed the ban to take full effect while its legality is reviewed by the lower courts. Oral arguments are scheduled before the 9th Circuit Court of Appeals on December 6. The Maryland case will be argued before the 4th Circuit on December 8. At this time, there is no appeal pending before the Supreme Court relating to any version of the travel ban, but eventual Supreme Court review of travel ban 3.0 is likely.

If you would like to discuss the implications of the travel ban and the various court decisions affecting the ban for your employees, your hiring plans, and your business, please contact Patrick W. McGovern, Esq., Partner in the Firm’s Immigration Law Practice at 973-535-7129 or at pmcgovern@nullnullgenovaburns.com.

Be Ready For New York State’s Paid Family Leave Law, Effective January 1, 2018

Employers with employees in New York must prepare for New York State’s Paid Family Leave Benefits Law (“PFL”), which will provide job-protected, insurance-based, paid family leave to employees.  PFL goes into effect shortly, on January 1, 2018.

Overview of PFL Benefits

Under PFL, eligible employees will be entitled to:

  • Paid time off for one of three qualifying reasons – Eligible employees will be entitled to a certain amount of time off, during which they will receive a certain percentage of their wages.  However, weekly wages payable under the PFL are capped at one-half of New York State’s Average Weekly Wage, which is currently $1,305.92 (half of which is $652.96).  The program will be fully implemented over a 4-year phase-in schedule:
    • Starting on January 1, 2018, eligible employees will be entitled to take 8 weeks of leave while receiving 50% of their average weekly wages.
    • Starting January 1, 2019, eligible employees will be entitled to take 10 weeks of leave while receiving 55% of their average weekly wages.
    • Starting on January 1, 2020, employees will still only be entitled to take 10 weeks of leave, but will be afforded 60% of their average weekly wages.
    • Finally, starting on January 1, 2021, employees will be entitled to take 12 weeks of leave while receiving 67% of their average weekly wages.
  • Reinstatement – Upon returning to work, eligible employees must be restored to the position they held before taking leave, or to a comparable position with comparable benefits and pay.

Covered Employers

  • Private employers with one or more covered employee will be required to provide PFL benefits.
  • Public employers may opt in.
  • Covered employers whose employees are represented by a union and whose collective bargaining agreement provides paid family leave need only provide PFL benefits if the collective bargaining agreement’s benefits are not as favorable as those under PFL.

Eligible Employees

  • Full-time employees (those with a regular schedule of 20 or more hours per week) become eligible for PFL benefits after working for 26 weeks.
  • Part-time employees (those with a regular schedule of less than 20 hours per week) become eligible for PFL benefits after working for 175 days.

Qualifying Reasons to take Family Leave under PFL

Eligible employees may receive PFL benefits in the following three instances:

  1. To bond with a new child (including newly adopted and foster children);
  2. To care for a close relative with a serious health condition;
    • Close relatives include spouses, domestic partners, children, parents, parents-in-law, grandparents, and grandchildren
    • A serious health condition is an illness, injury, impairment, or physical or mental condition that involves a) inpatient care in a hospital, hospice, or residential health care facility; or b) continuing treatment or continuing supervision by a health care provider.
  3. To relieve family pressures created when a spouse, child, domestic partner or parent is on or has been called to active military duty, and the employee is eligible for time off under the military provisions of the federal Family Medical Leave Act.

Notably, an employee cannot receive PFL benefits to care for his or her own serious health condition or for his or her own qualifying military event.

Interplay with other Leave Benefits

  • Covered employers may permit employees to use sick or vacation leave for full pay, but may not require that employees use such leave.
  • Employees’ PFL leave must run concurrently with qualifying FMLA leave.  This means that employees cannot stack PFL and FMLA leave to take time that exceeds the leave entitlement under the PFL.  Employees cannot receive New York State disability benefits simultaneous with their receipt of PFL benefits.

Tips and Next  Steps for New York City Employers

  • Update the leave provisions of your company’s policies and/or handbooks – it’s required by the PFL!
  • Obtain paid family leave insurance coverage
  • Train your human resources personnel

For questions on compliance with this new law or other employment and hiring requirements, please contact Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Training & Audit Programs Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

Morgan Stanley Abandons Broker Industry Recruiting Pact

In a major blow to the Protocol for Broker Recruiting, which limited restrictive covenants in the broker industry and resulting litigation, according to Reuters (October 30, 2017), Morgan Stanley has decided to withdraw from the Protocol. Created in 2004, the Protocol is made up of thousands of registered representatives, with the stated goal of “furthering clients’ interests in privacy and freedom of choice in connection with the movement of their registered representatives.” The move by Morgan Stanley to leave the Protocol was apparently motivated in part, according to Reuters, by industry changes as the top brokers are increasingly leaving the large brokerages that are members of the Protocol to work for smaller independent brokerages, which are not members.

The impact of Morgan Stanley’s departure from the agreement is unknown, but the next question remains whether the other major Wall Street brokerages follow suit. Regardless, it appears that restrictive covenants in the brokerage industry will be making a comeback as will the resulting litigation that the Protocol was created to lessen. For our clients in the brokerage industry, including Registered Investment Advisors (“RIA”), restrictive covenants are likely to become a much more important part of employment agreements again, and hiring of rival brokers will require more diligence in terms of existing non-competes.

For questions about restrictive covenants in the brokerage industry, please contact John C. Petrella, Esq., Chair of the firm’s Employment Law & Litigation Practice Group, Partner Harris S. Freier, Esq. or Associate Christopher M. Kurek, Esq. at 973-533-0777. Please also sign-up for our free Labor and Employment Law Blog to keep up-to-date on the latest news and legal developments.

New York City’s Salary Inquiry Ban Starts October 31, 2017

Starting October 31, 2017, New York City employers will be prohibited from inquiring about a job applicant’s salary history, or from relying on that salary history in determining an applicant’s prospective pay, unless the applicant voluntarily offers the information.

What New York City Employers Cannot Do

Under the salary inquiry law, employers cannot, during an in-person interview that takes place in New York City, or in any circumstances where the impact will be felt in New York City:

  • Communicate any question or statement to a job applicant, the applicant’s current or former employer, or a current or former employee who worked with the applicant, to obtain the applicant’s salary history;
  • Search public records to obtain an applicant’s salary history; and/or
  • Rely on an applicant’s salary history when making an offer of employment or deciding compensation, unless the applicant voluntarily and without prompting disclosed it.

What New York City Employers Can Do

New York City employers may consider and verify a job applicant’s salary history if:

  • The job applicant discloses the information voluntarily and without prompting;
  • Law specifically authorizes the disclosure or verification of salary history;
  • The position’s salary is determined by procedures in a collective bargaining agreement;
  • The applicant is a current employee applying for an internal transfer or promotion; and/or
  • A background check for non-salary related information inadvertently discloses salary history, provided, however, that the employer does not rely on that inadvertently disclosed salary history in determining the job applicant’s prospective salary.

The Scope of One’s “Salary History”

  • “Salary history” means current or prior wages, benefits or other compensation.
  • It does not include objective measures of the applicant’s history of productivity. Employers may ask about sales performance or other objective indicators of performance like volume or value, but cannot ask about how these figures translated into wages.
  • Employers may also discuss and consider the applicant’s salary and benefits expectations, including the amount of unvested equity and deferred compensation an applicant would forfeit from his or her current employer.

Consequences of Violating New York City’s Salary Inquiry Ban

The New York City Commission on Human Rights will investigate complaints and enforce the new law by imposing fines of up to $125,000 for unintentional violations, and up to $250,000 for intentional violations.

Tips and Next  Steps for New York City Employers

  • Update Your Company Policies, Job Application Materials, and Interview Guides
  • It is not enough to add a disclaimer that individuals in New York City or applying for jobs located in New York City need not answer questions related to salary history.
  • Develop a process for documenting when an applicant voluntarily discloses his/her salary history.
  • Train your Recruiting and Hiring Personnel
  • Develop a process for documenting the reasons for differentials in pay.

For questions on compliance with this new law or other employment and hiring requirements, please contact Dina M. Mastellone, Esq., Chair of the firm’s Human Resource Training & Audit Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.