Litigation Trends 2024

46 | Weil, Gotshal & Manges LLP LITIGATION TRENDS 2024 | 47 T O C E M P A N T I I P C A P R O W C C O N T A C T I N T A P P P A T C C L S E C or condition of a worker’s employment, such as their wages and benefits, work hours, or health and safety-related working conditions. Notably, employers with only indirect authority to control such terms or conditions could also have been swept up in the rule. In other words, even if the employer never exercised any such control, it still could have qualified as a joint employer. The 2023 standard would have marked a sea change in this area of law, sharply diverging from the 2020 rule it sought to replace. Under the 2020 rule, an employer needed to possess and exercise “substantial direct and immediate control” over an essential term or condition of employment to qualify as a joint employer. More specifically, the control needed to have a “regular or continuous consequential effect” on an essential term or condition, so sporadic or de minimis exercises of control were not enough. Had the new rule taken effect, the potential universe of employers that could have qualified as joint employers would have meaningfully expanded. Practically speaking, employers most likely to have fallen within the purview of the new rule included those that participate in franchise arrangements, use subcontractors, or engage with staffing agencies to provide temporary workers. Pending further judicial action, all employers should continue to abide by the 2020 rule. However, employers should consider reviewing their staffing policies and related contracts now in the event the new rule is resurrected in the future. New Legislation Expands Employee Rights and Protections In 2023, a number of cities and states enacted legislation expanding employee rights and protections related to discrimination, harassment, retaliation, and leaves of absence. Employers should be familiar with these key trends as they are likely poised to continue in 2024. Expanded Restrictions on Non-Disclosure and Non-Disparagement Agreements Effective November 17, 2023, under New York’s section 5-336 of the NY General Obligations Law, all releases entered in connection with resolving unlawful discrimination, discriminatory harassment, or retaliation claims with employees, potential employees, and independent contractors will be void if they (a) provide for liquidated damages or forfeiture of consideration if the complainant violates a non-disclosure or non-disparagement clause, or (b) contain or require any “affirmative statement, assertion, or disclaimer” by the complainant that they were “not in fact subject to unlawful discrimination, including discriminatory harassment, or retaliation.” (In addition, under New York’s S3255, effective February 15, 2024, all unlawful discriminatory practice claims (from that date forward) will be subject to a three-year statute of limitations for discrimination and retaliation claims. Previously, only claims involving sexual harassment in employment were subject to a three-year statute of limitations, while all other claims of discrimination had a one-year limitations period.) While these prohibitions apply to any “settlement, agreement or other resolution of any claim,” the factual foundation of which involves discrimination, harassment or retaliation, it remains to be seen how courts will interpret these prohibitions as applying to separation agreements, and/or other agreements containing releases of such claims where the employee has not raised a claim of discrimination, discriminatory harassment, or retaliation. The same New York legislation also made a very practical change in amending the required consideration period for an individual to sign a confidentiality preference agreement (required when resolving claims of discrimination, harassment, or retaliation and the settlement agreement contains any term or condition that would prevent the disclosure of the underlying facts of the claim). Previously, employees had to be provided and take 21 days to Employment E M P

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