On September 24, 2013, the New York City Council unanimously passed an amendment to the New York City Human Rights Law (NYCHRL) that expands prohibited discrimination in employment based on pregnancy, childbirth, or a related medical condition. Under the existing NYCHRL, as well as Title VII of the Civil Rights Act of 1964, as amended, discrimination against pregnant women is prohibited as unlawful gender-based discrimination. However, the Council’s amendment to the NYCHRL creates an additional right of action against employers that fail to provide reasonable accommodations to pregnant women.

The bill will become effective 120 days after enactment and is currently before the Mayor’s Office for consideration. Because the legislation was passed by a veto-proof 47-0 margin and Mayor Michael Bloomberg has indicated that he will sign the bill, the law will likely go into effect in early 2014.

The Council’s Committee Report describes the possible reasonable accommodations to be provided to pregnant women as including “bathroom breaks, leave for a period of disability arising from childbirth, breaks to facilitate increased water intake, periodic rest for those who stand for long periods of time, and assistance with manual labor.” Consistent with existing federal and local law, a “reasonable accommodation” does not include accommodations that would cause “undue hardship” to an employer’s business. In addition, employers may plead as an affirmative defense that the person aggrieved by the alleged discriminatory practice could not, with reasonable accommodation, satisfy the essential requisites of the job. The law also requires that an employer knew or should have known about the employee’s pregnancy, childbirth, or related medical condition. Under the new law, employers are also required to post an additional notice as to be determined by the New York City Commission on Human Rights.

Numerous states and municipalities have similar laws requiring employers to provide reasonable accommodations to pregnant women, and a similar bill is currently pending in the New York State legislature as part of Governor Andrew Cuomo’s proposed Women’s Equality Act. Under current laws and depending upon the circumstances, pregnant women may also receive protection under existing anti-disability discrimination laws. Employers should review their policies and procedures to ensure that pregnant women are not treated in an unlawful manner. We will continue to monitor the New York City law as it moves toward enactment.

From the Courts

Second Circuit Dismisses Improper Deductions Class Action Suit Under CAFA and Holds That Liquidated Damages Under New York Labor Law Do Not Apply Retroactively

Gold v. New York Life Insurance Co., No. 12-CV-2344 (2d Cir. Sept. 18, 2013) (Parker, J.): The plaintiff brought suit on behalf of himself and others alleging that he was improperly classified as exempt from the New York Labor Law (NYLL) and that his employer made improper deductions from his wages. Due to the dates of his employment and the NYLL’s longer statute of limitations, the plaintiff sued under the NYLL but not the Fair Labor Standards Act, and he therefore predicated federal jurisdiction under the Class Action Fairness Act (CAFA). Following discovery on the plaintiff’s individual claims, the district court dismissed his overtime claim, leaving only the improper wage deduction claim to go forward to class discovery. At that point, nearly three years after the case was commenced, the employer moved to dismiss because it discovered that more than two-thirds of the putative class members were New York citizens in violation of CAFA’s home state exception. The district court agreed and dismissed the remaining wage deduction claim. On appeal, the Second Circuit held that, under an abuse of discretion standard, dismissal was proper because the district court was in a better position to judge whether the delay was excusable. In doing so, the court cautioned that “there are numerous instances where the home state exception was raised much more promptly than it was in this case, and without full blown class discovery.”

In addition, the Second Circuit appeared to resolve an open question—whether the 2011 amendment to the NYLL, which raised liquidated damages from 25 percent to 100 percent, applies retroactively. Following the majority of federal district courts that have considered this question, the Second Circuit held that the amendment did not contain any “clear expression of retroactivity” and therefore 100 percent liquidated damages do not apply retroactively pre-2011. Given isolated case law to the contrary, Gold provides needed clarity on this important damages issue. The decision also stands as a reminder that employers faced with federal cases predicated upon CAFA should act promptly to determine whether the putative class meets the home state exception is a basis for dismissal.

Southern District of New York Certifies Another Intern Misclassification Decision for Immediate Appeal to the Second Circuit

Glatt v. Fox Searchlight Pictures, Inc., No. 11-CV-6784 (S.D.N.Y. Sept. 17, 2013) (Pauley, J.): Intern misclassification lawsuits remain on the rise in New York and elsewhere, and they continue to create thorny questions of law. In the Southern District of New York, a second decision regarding intern classification was certified for immediate appeal to the Second Circuit Court of Appeals. The plaintiffs in Glatt, unpaid interns with respect to the film “Black Swan,” alleged that they were “employees” under the Fair Labor Standards Act and New York Labor Law, and thus subject to minimum wage and overtime laws. As we covered in the June 2013 issue of the New York eAuthority, Judge Pauley granted the interns’ motions for class certification and partial summary judgment, thereby reaching a conclusion opposite to that of Judge Baer in Wang v. Hearst Corp. In light of the conflicting decisions, the Wang court certified for immediate appeal its decision to the Second Circuit. Now, the Glatt court has done the same. The disagreement centers upon Judge Pauley having adopted the U.S. Department of Labor’s six-factor test for determining whether interns were employees or exempt trainees; whereas the Wang court concluded that the determination should be based on a “totality of the circumstances,” including who is the primary beneficiary of the relationship.

The Second Circuit has yet to decide whether to take either appeal, but it will likely to do so given the conflicting opinions and the number of similar cases brought in New York. Absent regulatory guidance or case law to the contrary, employers should ensure that their unpaid internship programs meet the criteria set forth by the New York State Department of Labor in its December 21, 2010 opinion letter and the six factors set forth by the U.S. Department of Labor in its Fact Sheet. We will continue to monitor this issue as it develops.

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