Firm News: Isaac Sunkes

Legal Alert – “The Grieving Families Act”

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Ken Bloom

By Kenneth A. Bloom, Founder & Managing Partner

Talk about waiting until the last minute! Governor Hochul announced in an op-ed published by the Daily News that she would be vetoing the proposed Grieving Families Act on January 30, the deadline for her to sign the bill.

The Grieving Families Act would have completely overhauled New York’s wrongful death statute in two major ways. The first is that it would have greatly expanded the class of plaintiffs who could have recovered to anyone who had a “close” relationship to the deceased. The second is that plaintiffs would have been able to recover for grief, sympathy and loss of consortium. The current wrongful death statute allows for recovery of economic damages only. The Grieving Families Act also would have applied retroactively to all pending wrongful death lawsuits in New York.

Governor Hochul echoed experts’ concerns of the unintended consequences of the Grieving Families Act. One particular consequence of the Grieving Families Act is that it would “drive up already-high health insurance premiums” which would add significant costs for many sectors of the economy. As Governor Hochul wrote: “our goal must be to deliver justice for grieving families without sending the economy into distress.”

Governor Hochul recognized that the current wrongful death statute is outdated, should be updated, and urged the Legislature to consider the impact of the Grieving Families Act on the economy, small businesses, individuals, and the state’s healthcare system before, not after, passing sweeping legislation. She suggested the Legislature amend the current wrongful death statute so that parents of children who have died in an accident could recover for their loss. Notably absent from the Governor’s remarks were the specific impact the Act would have on commercial insurance premiums, claims costs attendant thereto, and the concomitant impact on all businesses in the state.

Stay tuned as we await the Legislature’s response and what will surely be a new bill which will be both an expensive and ill-conceived burden on insurers and insureds.

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At-Will Hunting

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Daniel Montagna

Proposed New York City legislation would redefine employee/employer relationships for many New York City-based employers.

If passed, Int. No. 837 will prohibit covered employers from terminating employees without either “just cause” or a “bona-fide economic reason.”

The bill would expand current city law, which prohibits same in the fast-food industry, to include all employees across all industries with the exception of those working in a probationary period, a short-term position, construction, for the government, and those covered by collective bargaining terms compliant with the bill.

Employers are urged to review and update handbooks, disciplinary policies, current employee contracts, and insurance policies if/when Int. No. 837 is enacted.

On December 7, 2022, the New York City Council introduced legislation that would effectively end the at-will employment arrangement for many employees in the City. The bill, Int. No. 837, is aimed at expanding current law, which presently restricts employers from terminating Fast-Food Workers without either “just cause” or a “bona-fide economic reason.” N.Y.C. Admin. Code § 20-1271 et . Under the new language, this prohibition would extend to all employees with the exception of those working in a probation period, short-term position, construction, for the government, and those covered by collective bargaining terms compliant with the bill. The legislation also restricts employers’ ability to rely on data collected through electronic monitoring when disciplining employees, unless the employer can show (1) that there is no other practical method of tracking or assessing performance, (2) it is using the least invasive electronic monitoring, and (3) the employee was previously provided notice of the monitoring. Electronic monitoring is defined broadly as “the collection of information concerning employee activities, communications, actions, biometrics or behaviors by electronic means.”

Under the bill, termination for “just cause” requires an employer to post and use a progressive discipline policy, provide 14 days’ notice of discharge under that policy, and, within 5 days of the notice of discharge, provide written reasons for the decision. Terminations for a “bona fide economic reason” must be supported by business records showing the legitimacy of a qualifying economic reason and must be done in reverse order of seniority. Importantly, these requirements are inapplicable in the case of an employee’s “egregious misconduct” or “egregious failure to perform,” though the bill does not provide a definition of those terms.

Ending the at-will approach to employment relationships for so many workers would be momentous legislation; it should also be a call to employers to implement best practices even before the vote on Int. No. 837 is taken. For example:

  1. Adopting rational and clear rules of conduct and performance in an employee handbook will be essential to the 5-day justification letter but is also needed now to set day-to-day expectations for employees and their supervisors.
  2. Likewise, having an evenly enforced progressive discipline policy with documentation of disciplinary actions should be the norm for all employers. (Many cases under current anti-discrimination and anti-retaliation laws turn on whether a purported justification for an employment decision was actually a pretext, hiding unlawful animus. Thus, these measures are already crucial to rebutting claims of biased and other unfair treatment in the workplace.)

As for new concerns raised by the bill, the 14-day notice period effectively creates a limbo for employees who would otherwise likely be terminated immediately under current law. Assuming the employee is unhappy with the discharge, this creates the potential for suboptimal interactions between the to-be-terminated employee and co-workers. For employees who interact with clients, the situation could be even more perilous for the employer. While such concerns should be addressed on a case-by-case basis, a solid employee off-boarding system, with immediate access limitation when called-for, should ensure that the company’s reputation, both internal and external, does not suffer while the soon-to-be-former employee collects a two-week severance.

Two additional concerns raised by the bill are its effects on a company’s existing contracts, including any employee contracts, and its Employment Practice Liability Insurance (EPLI). A New York City-based company should review employment agreements with employees that contain at-will terms and seek legal advice on modifying same. It should also review its existing EPLI to confirm adequate coverage for the new classes of claims created by Int. No. 837 (and make necessary changes if not).

Ultimately, the pending bill highlights the necessity for employers to review their handbooks, discipline policies, employee contracts, and insurance policies so that if and when Int. 837 is passed, the company is readily able to adapt to the post at-will employment regime.

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Proposed NYC Law Puts Landlords, Building Owners, Co-op Boards and their Carriers at Increased Risk

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NYC Law

Background

“Little imagination is needed to understand the paramount importance of eliminating unfair discrimination in housing.”[1] To combat such discrimination the  New York City Council is planning to pass the Fair Chance for Housing Act (FCHA), a bill sponsored by 26 New York City Council members and the New York City Public Advocate that prohibits landlords and building owners, including co-op boards, from discriminating against a prospective tenant, purchaser, lessee or occupant on the basis of criminal history or arrest record. Not surprisingly, the bill resembles the NYC Fair Chance Act passed a few years ago, which similarly was aimed at reducing discrimination and advancing diversity and inclusion by giving individuals from all backgrounds and circumstances a fair chance in employment.[2]

Advocates for the FCHA bill argue that housing is a human right, and equal access to safe and stable housing will strengthen our communities and “make us all safer.”[3] Indeed, adequate, safe, stable, affordable housing was first recognized as a human right in the 1948 Universal Declaration of Human Rights and has since been reaffirmed in many international treaties, resolutions, and declarations.[4]

Of relevance, the right to adequate housing includes the right to physical safety.[5] So, while the notion that denying housing to people with criminal convictions increases safety can be deeply misguided, the question whether the proposed bill will resolve or at the very least assist to resolve problems related to housing remains unclear. What is clear is that passage of the bill will spur additional litigation affecting New York City landlords, building owners, cooperative boards, landowners, as well as the insurance carriers for each of them.

Details of the FCHA Bill

The FCHA bill as written prohibits landlords and building owners from obtaining (e.g., through a background check) and inquiring into (presumably even by “Googling” the applicant) the criminal history or criminal records of a prospective tenant, purchaser, lessee or occupant, with a few exceptions.

Like other New York City and State discrimination laws, someone who believes he or she has been discriminated against because of criminal history, or believes a criminal background inquiry has been performed, could file a lawsuit for damages against the building owner (e.g., the cooperative corporation), as well as the managing agent and potentially any board member who participated in (“aided or abetted”) the rejection or the inquiry.

Potential Pitfalls

Clearly, the FCHA bill is grounded in a noble purpose: it aims to end a chronic homelessness problem that has proved impossible to solve in New York City and to address the ‘second chance’ goal of criminal justice reform.[6] Despite the good intentions, however, there are several problems with the bill and a few consequences likely not considered by the bill’s advocates.

From the perspective of the landlords, building owners, cooperative boards, landowners, the FCHA bill produces more questions than answers regarding the issue of liability. For example:

  1. The FCHA bill allows rejection of a prospective tenant, purchaser, lessee or occupant where such exclusion is required pursuant to “any federal, state, or local law or rule or regulation”. However, it is unclear how the basis of such exclusion can be determined without permitting an inquiry into same.
  2. Further, it is not clear whether a “federal, state, or local law or rule or regulation” includes a court order. The bill language seems to indicate that it does not, which means that a civil court contempt order with attendant criminal penalties (for example, prohibiting the prospective tenant from going near the premises /or someone already living on the premises), (a) could not be inquired into, and (b) would not serve as a justification for rejecting the prospective tenant, purchaser, lessee, or occupant.
  3. The FCHA bill allows a limited inquiry into the New York State Sex Offender Registry (albeit under certain conditions). However, it is silent whether any other state’s sex offender registry may be checked, even for an out of state tenant applicant.
  4. Does the FCHA bill apply to condominium boards? Presumably it does, but many condominium boards do not have the right to approve a unit owner’s sale to a prospective purchaser. Some boards, however, have a right of first refusal whereby the board (or a contiguous existing unit owner) is permitted to purchase the unit in place of the prospective buyer. In this instance, is a condominium board (or the contiguous unit owner) also subject to the prohibitions found in the proposed bill?  Or is it merely another bidder for the unit perhaps not subject to the prohibition on criminal background inquiry?
  5. Similarly, if there are multiple buyers bidding on a property for rent, and one of them voluntarily (and cleverly) allows a criminal background check, can such check then be done by the owner/landlord/agent? Can that applicant – assuming a clean criminal history - then be accepted by all other bidders without liability under the FCHA bill? The bill does not come close to answering these questions.
  6. Finally, but most critically, the proposed bill seems to attempt to modify centuries-old common law in New York, which holds that landlords have a duty to protect occupants from reasonably foreseeable harm, including foreseeable criminal acts of third parties, on the premises. See, e.g., Q. v. Estate of Rockefeller, 2021 U.S. Dist. LEXIS 203563, *16 (S.D.N.Y. Oct. 21, 2021). How does the FCHA bill’s prohibition against criminal inquiry affect the common law duty? If a board president already knows the criminal history of the prospective tenant, purchaser, lessee, or occupant’s criminal history, must he/she ignore that knowledge and approve the applicant and thereby potentially breach the duty to others in the building?


Due to the bill’s lack of clarity, and the potential for liability, G + B believes the takeaway from this proposed bill for landowners and co-ops is mainly prophylactic: (1) get all insurance coverages in order, including general liability, EPL, and D&O, making sure that the ownership entity, managing agents, and board members qualify as insureds; and (2) get all indemnifications for owners, board members and managing agents in order, especially where sales, tenancies, and background checks are outsourced.
[1] THE FAIR HOUSING ACT AND INSURANCE: AN UPDATE AND THE QUESTION OF DISABILITY   DISCRIMINATION, 31 Hofstra L. Rev. 141, 141.
[2] The Fair Chance Act made it illegal for most employers in New York City to ask about the criminal record of job applicants before making a job offer, which meant prohibiting inquiries (including ads, applications, and interview questions)  into an applicant's criminal record  See https://www.nyc.gov/site/cchr/law/fair-chance-law.page  [last visited on January 4, 2023].
[3]  See: https://www.fairchancehousing.org/about [last visited on January 4, 2023]
[4] See: https://www.un.org/en/about-us/udhr/history-of-the-declaration [last visited on January 4, 2023]
[5] Id.
[6]  As of October 2022, the total number of homeless people sleeping in New York City’s main municipal shelter system was 65,633, including 20,751 homeless children. See: https://www.coalitionforthehomeless.org/basic-facts-about-homelessness-new-york-city-data-and-charts/ [last visited on January 4, 2023].

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