Kendall Hoechst, Amy McLaughlin, Editors
Dinse, Knapp & McAndrew, P.C., Burlington
by Kendall Hoechst
Governor Phil Scott has signed two new laws that will have an impact on all Vermont employers. The first, a response to the #MeToo movement, is designed to protect Vermonters from sexual harassment. The second law restricts employers from making certain inquiries about applicants’ salary history, with an eye toward closing the wage gap between men and women. Both laws took effect July 1, 2018.
Preventing sexual harassment
Applicability. First, the new sexual harassment law expands the applicability of the state’s antiharassment statute to “all persons who engage a person to perform work or services” even if the individuals or entities involved might not have previously met the definition of “employer” or “employee.” That suggests the law is meant to apply broadly. The definition or meaning of “harassment” hasn’t been altered.
Antiharassment policies. Vermont employers are required to provide copies of written policies against sexual harassment to new employees upon hire. Now, you must also provide notice to all employees when you make any changes or updates to your sexual harassment policy. The statute encourages, but doesn’t require, sexual harassment education and training for newly hired employees as well as annual training for existing employees.
Employment contracts. Under the new law, you may not require any employee or prospective employee to sign an employment contract or a waiver that prevents her from opposing, disclosing, or reporting sexual harassment, or participating in a sexual harassment investigation. Likewise, you may not require employees to waive their rights or remedies with respect to a claim of sexual harassment. Any agreement that purports to do either of those things will be void and unenforceable.
Settlement agreements. The law also addresses the settlement of sexual harassment claims. Settlement agreements may not prevent an employee from working for the employer or any parent, subsidiary, division, or affiliate in the future. In other words, no-rehire clauses will render the entire settlement agreement void and unenforceable. A settlement agreement must also include certain statements affirming that the settlement does not prevent the accuser from:
- Reporting sexual harassment to an appropriate governmental agency;
- Complying with a discovery request (i.e., a request for evidence related to a legal claim);
- Testifying at a hearing or trial involving a claim of sexual harassment or participating in any related investigation; or
- Exercising his right under state or federal labor law to engage in concerted activity for mutual aid or protection.
A settlement agreement that doesn’t include those statements will be void and unenforceable. Furthermore, the settlement agreement must make it clear that the accuser isn’t waiving any rights or claims that might arise after the agreement is executed.
Enforcement powers. The new law imbues the Attorney General’s Office (AG)—or the Vermont Human Rights Commission (VHRC) if the employee works for the state—with the power to enter and inspect any place of business or employment, question any person who is authorized to receive or investigate complaints of sexual harassment, and examine an employer’s records, policies, procedures, and training materials related to sexual harassment. An employer must be given 48 hours’ notice prior to any on-site visit, but the employer can waive or shorten the notice period.
It’s important to note that an employer only has to provide redacted data on the number of complaints of sexual harassment it has received and the resolution of each complaint. You should preserve this kind of data going forward to make compliance with an inspection request from the state easier.
After an inspection, the AG must notify the employer of the results, including any issues or deficiencies; provide resources to assist with the prevention of harassment; and identify any technical assistance it may offer. If the AG deems it necessary, an employer can be required to conduct an annual education and training program, an annual anonymous workplace survey, or both, for up to three years. The AG is required to maintain the confidentiality of records and information related to or obtained through an inspection.
Notice to and participation by the state in private lawsuits. The AG remains empowered to bring enforcement actions, but individuals also have the option of filing sexual harassment complaints on their own without the state’s involvement. Any person who files such a complaint is now required to provide notice to the AG and the VHRC within 14 days of filing the complaint. Either agency has the option to intervene in the action or to file a statement with the court addressing questions of law without becoming a party.
Future efforts to reduce and address sexual harassment. Before December 15, 2018, the AG and the VHRC must develop enhanced reporting mechanisms to make it easier for employees and members of the public to submit complaints of discrimination and sexual harassment. Those mechanisms must include, at a minimum, an “easy-to- use” Web portal and a telephone hotline. The AG must submit a report on the implementation of the enhanced reporting mechanisms on or before January 15, 2020.
The law also appropriates $125,000 to the Vermont Commission on Women for the purpose of creating a public education and outreach program focused on making the public aware of methods for reporting discrimination and sexual harassment, where to find information on the laws against discrimination and harassment, and best practices for prevention.
Finally, the law directs the Office of Legislative Counsel to investigate several aspects of potential future legislation addressing nondisclosure provisions. The legislature is seeking research on requiring notice of settlement agreements that restrict the accuser from disclosing information related to a sexual harassment claim and rendering a nondisclosure agreement void and unenforceable if the alleged harasser is found to have harassed again.
Next steps. You should review your policies on sexual harassment and identify which individuals are designated to receive complaints. It would also be prudent to maintain records of any complaints you receive and all of the associated documentation. Continue to take steps to address any complaints of sexual harassment, including conducting investigations and maintaining appropriate documentation of the results as well as any remedial measures you take in response. You may want to revisit your policies and procedures to ensure they cover those issues.
You should also review your form settlement agreements to ensure they include the necessary statements and don’t contain a no-rehire clause. Finally, check your standard employment agreements to make sure they don’t limit an employee’s ability to complain about sexual harassment or participate in an agency investigation or any similar proceedings. You may want to consider adding a statement to that effect to your confidentiality provisions.
Inquiring about job applicants’ salary history
The other new antidiscrimination law prevents employers from relying on past compensation information to set the salaries of new hires. The term “compensation,” as used in the law, encompasses wages, salary, bonuses, core benefits, fringe benefits, and equity-based compensation. Employers may not:
- Ask either a prospective employee or his former employer about his past compensation;
- Require that a prospective employee’s previous compensation satisfy a minimum or maximum standard; or
- Determine whether to interview a prospective employee based on his current or past compensation.
Importantly, if a prospective employee voluntarily discloses information about her previous compensation, you may seek to confirm or request that she confirm the information, but only after you make a job offer that includes a compensation amount. Furthermore, you are permitted to inquire about an applicant’s salary expectations or requirements and provide information about the wages, benefits, compensation, or salary offered for a particular position without running afoul of the statute.
Next steps. Review your application materials to ensure they don’t include any requests for salary history information. You should also take care not to raise the topic during interviews or other hiring communications.
Even small changes in the law can have a significant impact on employers. These changes are fairly substantial and suggest that the state will have a more critical eye on employers going forward. Not only are preventing and responding to sexual harassment and reducing the wage gap now a more robust part of Vermont law, but they are also the right thing to do.
Kendall Hoechst can be reached at email@example.com or 802-859-7042.