Over the past several years, Governor Cuomo has imposed additional requirements on employers in his annual budgets. These changes often catch some employers by surprise upon the adoption of the final budget. As the State nears approval of the budget for the 2021 fiscal year, it would be prudent for employers to remain apprised of potential changes that may affect their organizations.
One potential change included in Governor Cuomo’s proposed 2021 budget involves the disclosure of an organization’s sexual harassment data when submitting a competitive bid. This change would further amend State Finance Law § 139-l, which was originally enacted as part of the State budget for the 2019 fiscal year. State Finance Law § 139-l currently requires every bid for a contract with the “State or any public department or agency thereof” to include a certification that the employer has complied with the annual sexual harassment training requirements. The 2021 proposed budget doubles down on the information that must be included in such bids, adding the following to the list of required disclosures:
- The name of the bidder and the total number of its employees;
- The total number of adverse judgments or administrative rulings related to allegations of sexual harassment during the prior year;
- Whether equitable relief was awarded against the employer in any adverse judgment or administrative rulings;
- The total number of settlements entered into in the prior year where the employer compensated an employee or nonemployee (or provided some other form of consideration) based on an allegation that the individual was the victim of sexual harassment in the workplace; and
- The total number of settlements entered into in the prior year that related to allegations of sexual harassment committed by a corporate executive (irrespective of whether such conduct occurred in the workplace).
In addition to these requirements, the State, public department or agency thereof, must submit copies of every bidder’s sexual harassment report to the State Division of Human Rights and the Office of the State Comptroller. The Comptroller would then be responsible for preparing an annual report to be submitted to various governmental officials which summarizes the sexual harassment data.
If this legislation is approved, it may impact how organizations handle sexual harassment disputes going forward. For instance, organizations that derive a majority of their business from public contracts may have more of an incentive to fully litigate sexual harassment claims that they deem meritless. Specifically, an organization may wish to limit the number of settlement agreements disclosed as part of the bid so that it does not become a public record.
Fully litigating sexual harassment claims may also improve the organization’s chances to secure the contract, as public agencies may wish to disqualify bidders who report an abundance of adverse rulings and/or settlement agreements. However, it is important to note that the legislation is silent regarding whether sexual harassment data may be considered in awarding the contract to the “lowest responsible bidder.” Thus, if the legislation is adopted, there would be an open question as to whether sexual harassment data may be taken into account when determining whether the low bidder is in fact a “responsible bidder.”
Other potential bidders may be completely discouraged from submitting a bid out of fear that their sexual harassment data will become public. Thus, public agencies may see limited competition in procuring products and/or services as a result of this legislation. Public contractors and public agencies should certainly monitor this legislation closely and prepare for its potential adoption. If approved, this amendment to State Finance Law § 139-l would take effect on July 1, 2020.