BILL NUMBER: S5459
SPONSOR: JACKSON
 
TITLE OF BILL:
An act to amend the labor law, in relation to enacting the safeguarding
employees and accountability for termination act
 
PURPOSE:
The purpose of this legislation is to require employers to have good
cause when terminating an employee.
 
SUMMARY OF PROVISIONS:
Section 1 adds a new Article 20-D to the Labor Law entitled the "Safe-
guarding Employees and Accountability for Termination Act" or "The SEAT
Act."
The SEAT Act provides definitions for constructive discharge, discharge,
fringe benefits, good cause, leave of absence, and lost wages. Discharge
of employment may only be on grounds for good cause based on (1) the
employee's failure to satisfactorily perform job duties; (2) the employ-
ee's disruption of the employer's operation except when engaging in
concerted activity; (3) the employee's material or repeated violated of
an express provision of the employer's written policies; or (4) other
legitimate business reasons determined by the employer while exercising
the employer's reasonable business judgment. The legal use of a consum-
able product by an employee off the employer's premises during non-work-
ing hours is not a legitimate business reason except in certain situ-
ations.
Discharge of employment is wrongful if: (1) the discharge was not for
good cause and the employee had completed the employer's probationary
period; or (2) the employer materially violated an express provision of
its own written personnel policy prior to the discharge, and the
violation deprived the employee of a fair and reasonable opportunity to
remain in a position of employment with the employer.
During the probationary period, employment may be terminated at will of
the employer on notice to the employee for any reason or no reason.
Further, the employer has broad discretion when making a decision to
discharge any managerial or supervisory employee.
If an employer has committed a wrongful discharge, the employee may be
awarded lost wages and fringe benefits for a period not to exceed 4
years from the date of the discharge, together with interest on the lost
wages and fringe benefits. The employee's interim earning, derived from
any new kind, nature, or type of work, hire, contractor status
oròemployment that did not exist at the time of discharge, including
amounts the employee could have earned with reasonable diligence from
the work, hire, contractor status or employment, shall be deducted from
the amount awarded for lost wages. Before interim earnings are deducted
from lost wages, any reasonable amounts spent by the employee in search-
ing for, obtaining, or relocating to new employment shall be deducted
from interim earnings.
If an employer does not establish a specific probationary period or
state that there is no probationary period prior to or at the time the
employee begins work, there is a probationary period of one month
commencing on the date the employee begins work. An employer may extend
a probationary period prior to the expiration of a probationary period,
but the original probationary period together with any extensions shall
not exceed 6 months. Further, the probationary period shall not be
extended or restarted by discharging an employee during the probationary
period and rehiring the employee within three months after such
discharge. If an employee has one or more leaves of absence during the
probationary period, the time of each leave of absence shall not be a
part of the probationary period unless the employer affirmatively elects
to include each leave of absence as part of the probationary period with
the affirmative written consent of the employee.
Any action under this article must be commenced within 6 years after the
date of discharge. If an employer maintains written internal procedures
under which an employee may appeal a discharge within the organizational
structure of the employer, the employee must first exhaust those proce-
dures before filing an action under this article. The employee's fail-
ure to initiate or exhaust available internal procedures is a defense to
an action brought under this article. If the employer's internal proce-
dures are not completed within 90 days from the date the employee initi-
ates the internal procedures, the employee may file an action under this
article and the employer's internal procedures are considered exhausted.
The statute of limitations are tolled until the procedures are
exhausted; however, in no case may the provisions of the employer's
internal procedures extend the limitation period more than 120 days.
If the employer maintains written internal procedures for appeal, the
employer must notify the discharged employee within 14 days of the date
of discharge in writing or electronically the existence of internal
procedures. The timeframe for the employee to commence procedures starts
when the employer sends a copy of the internal procedures in writing or
electronically. A copy of the procedures is considered provided to the
employee if the employer sends a copy of the procedures to the employ-
ee's last known mailing address and electronic mail, if provided, or the
employee's attorney. If the employer fails to notify and send the inter-
nal procedures to the discharged employee, the employee does not need to
comply with commencing appeal under the employer's internal procedures.
This article does not apply to: (1) a discharge that is subject to any
other state or federal law that provides a procedure or remedy for
contesting the dispute; or (2) an employee that is covered by a collec-
tive bargaining agreement or written contract of employment for a speci-
fied period.
A party may make a written offer to arbitrate a dispute so long as a
neutral arbitrator is selected, the arbitration is conducted pursuant to
Article 75 of the Civil Practice Law and Rules (CPLR), and the arbitra-
tor is bound by this article. If a complaint is filed under this arti-
cle, an offer to arbitrate must be made within 60 days after service of
the complaint and may be accepted in writing 30 days after the date the
offer is made. A discharged employee that makes a valid offer to arbi-
trate that is accepted by the employer and the employee prevails, the
discharged employee is entitled to have the arbitrator's fee and all
costs of the arbitration paid by the employer. If arbitration is offered
and accepted, it shall be the exclusive remedy for the wrongful
discharge dispute and there is no right to bring or continue a lawsuit
under this article. The arbitrator's award is final and binding, subject
to the review of their decision under Article 75 of the CPLR. However,
this shall not apply if the employer maintains written internal proce-
dures that require arbitration.
If a discharged employee makes a valid offer to arbitrate that is not
accepted by the employer and such discharged employee prevails in an
action under this article, the discharged employee is entitled to
reasonable attorney's fees incurred subsequent to the date of the offer.
Section 2 is the severability clause.
Section 3 is the effective date.
 
JUSTIFICATION:
The nail salon, restaurant, retail worker; these are a few "at will"
employees that can be terminated from their job without cause.
Private-sector employers can fire employees for any reason: to replace
them with a family member, for extending vacation due to a flight cance-
lation, or simply because the employer did not like the employee. The
uncertainty and instability of "at will" employment fosters inequality
in bargaining power between employers and employees.
Good cause termination may be a tool to balance the power dynamic of
private-sector labor. By requiring good cause to terminate employees,
New York can prevent senseless job loss and provide workers with more
secure employment. Too many New Yorkers work in circumstances where they
can be discharged without cause.
 
LEGISLATIVE HISTORY:
2021-2022: S.8458 - Referred to Labor
 
STATE AND LOCAL FISCAL IMPLICATIONS:
None to the state.
 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law. Effective immediately, the addition, amendment and/or
repeal of any rule or regulation necessary for the implementation of
this act on its effective date are authorized to be made on or before
such date.