André Castaybert, Author at Castaybert Law, NYC

November 28, 2023

The “Freelance Isn’t Free Act” was signed into law by New York Governor Kathy Hochul on November 22. The law, SB 5026, gives freelance workers the right to have written contracts and be paid within 30 days of providing freelance services. The legislation is expected to apply to over two million New York freelancers, who fit the definition of “freelance workers” prescribed in the Act as individuals or organizations of one person who provide services of $800 or more to one hiring party within a 120-day period. The legislation specifically excludes sales representatives, practicing attorneys, licensed medical professionals, and construction contractors from the definition of freelancers. Similar legislation has been in place in New York City since 2017.

The law, which will take effect in May of 2024, will require those who hire a freelancer to provide $800 worth of services or more to use a contract including, among other things, an itemization of all services to be provided by the freelancer, the value of the services to be provided pursuant to the contract, and the rate and method of compensation. Hiring parties who fail to adequately memorialize an arrangement with a freelancer could be subject to fines. The law will protect hiring parties from taking any “action that penalizes a freelance worker for, or is reasonably likely to deter a freelance worker from, exercising or attempting to exercise any right guaranteed under [the law], or from obtaining any future work opportunity because the freelance worker has done so.”

Freelance workers who wish to allege violations of the law may file a complaint with the Commissioner of Labor, who, following an investigation, may sue hiring parties, join claims from different freelancers against the same hiring party, or impose civil and criminal penalties. Individuals may also file civil actions. The bill further authorizes the State Attorney General to bring a civil action on behalf of the state and seek injunctive relief, civil penalties up to $25,000, and any other appropriate relief where reasonable cause exists to believe that a hiring party is engaged in a pattern or practice of violating the Act.

It is always a best practice for businesses that work with freelancers and independent contractors to employ written contracts. Businesses should not wait until enforcement of SB 5026 begins in May 2024 to codify their arrangements with workers, which is a key step in identifying any potential liability involved in those relationships.

To read how Castaybert PLLC can assist you with employment law matters, click here.

November 27, 2023

On November 17, 2023, New York Governor Kathy Hochul signed into law SB S4516, prohibiting settlement agreements in claims involving sexual harassment, or other form of unlawful discrimination, from containing any condition that requires payment of liquidated damages for violations of a non-disclosure or non-disparagement clause included in such settlement agreement. The law, effective as of Gov. Hochul’s signature, will apply to all settlement agreements between employees and employers entered into on November 17, 2023 or later.

The new law will be relevant to settlement agreements dealing with various issues, including claims of unlawful harassment, discrimination, and retaliation. In effect, such agreements will be prohibited from requiring a defendant found to have breached the agreement to either pay a set amount of money indicated in the agreement, forfeit settlement payments, or make any affirmative statement, assertion, or disclaimer that the complainant was not in fact subject to unlawful harassment, discrimination, or retaliation. No release of a claim involving unlawful discrimination, including discriminatory harassment or retaliation, will be enforceable if it is determined to be in violation of the new law.

While the law applies only to agreements entered into on or after November 17, 2023, Gov. Hochul signed another bill extending the statute of limitations on all unlawful discriminatory practices claims to three years. Prior to the amendment, most complaints of unlawful discrimination were required to be filed with the Division of Human Rights within one year, while a three-year statute of limitations only applied for claims of sexual harassment. The 3-year statute of limitations will be in place as of claims arising on or after February 15, 2024.

The new laws should help fill the void left by the New York’s Adult Survivors Act, which expired on November 24, 2023. The now-expired law gave survivors of sexual assault who were 18 or older at the time of the alleged abuse a one-time opportunity to file civil lawsuits against their abusers, even when the statute of limitations had run out. The new limitations on release of claims and the extension of the time to file complaints of unlawful discrimination are intended to strengthen the rights and protections of New York employees generally.

To read how Castaybert PLLC can assist you with employment law matters, click here.

November 29, 2023

JAMS just published a useful article about navigating mediation claims against corporate officers and directors. Often these claims are derivative claims from a related suit against the company and are brought by a shareholder or LLC interest holder alleging the officer or director breached a fiduciary duty of care owed to the company and shareholders. These claims are incredibly complex because of the multitude of parties and attorneys navigating issues between the individual director or officer, the company, the board, and potentially an insurance company that provides the director or officer liability insurance.

The article focuses on four major issues to consider when engaging in a mediation involving an officer or director, including:

Potential disagreement among the directors and officers involved because of the varying defenses of each party.
Negative publicity for the company or individual director or officer.
The status of the case and whether a pending motion to dismiss will have an effect on the derivative claims.
The amount of directors and officers liability insurance coverage.

To read the full article from JAMS, click here.

To read how Castaybert PLLC can assist you in complex corporate mediations and director and officer liability and insurance coverage litigation and counseling, click here and here.

November 27, 2023 –

André Castaybert, principal attorney of Castaybert PLLC, has received a “Preeminent” AV rating from the 2024 Martindale-Hubbell peer review. The award represents the highest level of professional excellence an attorney can receive from Martindale-Hubbell and signifies that a large number of the lawyer’s peers rank him or her at the highest level of professional excellence for their legal knowledge, communication skills and ethical standards.

This marks the 11th consecutive year that André has received this award.

Readers looking for a short overview of the litigation process in state and federal courts in New York can consult the article linked here by Dewey Pegno & Kramarsky LLP. The article succinctly explains the structure of the civil court system, the roles of judges and juries, limitations, pre-action considerations, commencement of proceedings, evidence presentation, interim remedies, available remedies, enforcement mechanisms, class actions, appeals, and recognition and enforcement of foreign judgments, among other topics.

For information about how CASTAYBERT PLLC can assist you with commercial litigation and arbitration, click here and here.

November 7, 2023

On September 14, 2023, the Governor of New York Kathy Hochul signed Assembly Bill 836 into law, restricting New York employers access to prospective or current employees personal, private social media accounts. New York now joins over 25 other states that have enacted similar laws related to the scope of workplace use of personal social media accounts. Job applicants and employees in New York will now have increased privacy for social media posts if their accounts are private and used exclusively for personal purposes.

The key changes of the bill include:

Prohibiting employers from requesting or requiring job applicants or current employees to disclose their social media login information to the employer.
Prohibiting employers from requesting or requiring job applicants or current employees to login and access their personal accounts while in the presence of the employer.
Prohibiting employers from requesting or requiring job applicants or current employees to reproduce photos, videos, or other information on their personal social media accounts.
Prohibiting an employer from discharging, disciplining, or penalizing an employee for refusing to disclose information related to their personal social media account.
Prohibiting an employer from refusing to hire an applicant if they do not disclose information related to their personal social media account.

It is important to note these changes only apply to “personal” social media accounts, which are defined as accounts or profiles on an electronic medium “used exclusively for personal purposes”. Further, this law only applies to private accounts, as employers may still look at or use information that is publicly available on a prospective or current employees public social media accounts. Employers may lawfully access an employee’s private social media account if the social media account is used for the employers business purposes, but must provide the employee with notice of their right to request access.

It is advisable for employers who are based in or operate in New York to review and modify their policies on prospective and current employee social media accounts, as these changes become effective March 12, 2024.

To read how Castaybert PLLC can assist you with employment law matters, click here.

September 27, 2023

California Governor Gavin Newsom signed SB 699 on September 1, prohibiting employers from entering into or enforcing noncompete agreements, regardless of where the employment agreement was signed and whether the employee worked outside of California.

SB 699, which goes into effect on January 1, 2024, contributes to the state’s history of promoting public policy in favor of employee mobility and competition.

California’s Business and Professions Code Section 16600 has been the cornerstone of this policy, rendering void any contractual provisions restricting individuals from engaging in lawful professions, trades, or businesses, with limited statutory exceptions. SB 699, codified as Section 16600.5 of the Business and Professions Code, broadens Section 16600’s restrictions on post-employment restrictive covenants by applying the ban “regardless of whether the contract was signed and the employment was maintained outside of California.”

The expanded restriction of noncompetes reflects the California legislature’s findings on the detrimental impact of noncompetes on economic growth, wages, diversity, entrepreneurship, and innovation. Despite being unenforceable in California, noncompete clauses continue to be widespread in the U.S., with the threat of noncompete litigation producing a chilling effect on employee mobility.

In response to challenges posed by out-of-state employers attempting to prevent the hiring of former employees by California employers, SB 699 declares that agreements restraining trade under Section 16600 are void and unenforceable, regardless of when and where they were signed and whether employment was maintained outside of California.

The legislation reflects a growing nationwide trend of noncompete bans. Several states have banned noncompetes, including North Dakota, Oklahoma, and Minnesota. As of June 2023, New York is poised to join these states after the state legislature passed a bill prohibiting nearly all noncompete agreements, pending Governor Kathy Hochul’s signature. At the federal level, President Biden’s 2021 Executive Order on Promoting Competition in the American Economy encouraged the Federal Trade Commission to curtail unfair use of noncompete clauses. In response, the FTC in January proposed a comprehensive ban on non-compete clauses in employment contracts, including the elimination of all existing non-competes.

The expansion of Section 16600 provides substantial legal recourse to anyone California employers wish to employ to provide services in California. SB 699 empowers employees, former employees, and prospective employees to enforce their rights through private legal action seeking injunctive relief and actual damages, with successful plaintiffs entitled to recover reasonable attorney fees and costs.

To read how Castaybert PLLC can assist you with employment law matters, click here.

July 20, 2023

On June 13, 2023, the New York Court of Appeals reversed the New York Appellate Division, First Department’s decision in The Moore Charitable Foundation et al. v. PJT Partners, Inc. et al. This decision has a significant impact on who can bring claims against employers for employee misconduct suits in New York, particularly when the employer is a financial institution or law firm doing business in New York.

Negligent supervision and retention claims typically occur when an individual takes action against an employer who failed to discipline or terminate an employee whom the employer knew was unsuitable or potentially harmful. Under already established case law, employers owed a duty of care to existing customers of a business. In Moore Charitable Foundation, however, the Court expanded the scope of the employer’s duties recognizing that an employer can be held legally responsible for injuries and damages caused by an employee’s misconduct to prospective customers, even when the employer did not have notice of previous misconduct by the employee.

The majority in Moore Charitable held that, “when an employer has notice of its employee’s propensity to engage in tortious conduct, yet retains and fails to reasonably supervise such employee, the employer may become liable for injuries thereafter proximately caused by its negligent supervision and retention”.

The Court further explained that a “defendant is on notice of an employee’s propensity to engage in tortious conduct when it knows or should know of the employee’s tendency to engage in such conduct”. The Court held the employer in this case had sufficient constructive notice because the employee had engaged “in ‘excessive high-risk securities trading’ from personal accounts during work hours” and “began drinking to excess during the workday”.

Accordingly, an employer in New York could now be found liable for a negligent supervision and retention claim if they (1) actually know of employee misconduct or (2) should have known given the individuals history/prior events showing a propensity to commit a wrongful act.

The dissent argued that the majority decision poses significant threats to financial institutions, banks, and law firms doing business in New York because “permitting all potential customers to sue employers for an employee’s fraud … would result in an unmitigated proliferation of claims”.

To read the full opinion written by Judge Cannataro in The Moore Charitable Foundation et al. v. PJT Partners, Inc. et al., click here.

To read how Castaybert PLLC can assist you with employment law matters, click here.

July 20, 2023

This May in Syntel Sterling Best Shores Mauritius Ltd. v. TriZetto Grp., Inc., the U.S. Court of Appeals for the Second Circuit ruled on the availability of damages in cases involving trade secrets under the Defense Trade Secrets Act (the “DTSA”).

The dispute in Syntel involved the theft of a trade secret related to healthcare insurance software against a rival software company. The Second Circuit affirmed the lower court’s finding that Syntel stole trade secrets from TriZetto under the DTSA, but the Second Circuit vacated the jury’s $285 million award for compensatory damages for avoided development costs, i.e., the costs the trade secret holder spent which the thief of the secret saved.

Typically, under the DTSA, avoided costs are recoverable as damages for unjust enrichment. But in Syntel, the Second Circuit vacated the jury’s award of avoided costs, reasoning that such damages are only available when a party’s injury “is not adequately addressed by lost profits”.

The Restatement (Third) of Unfair Competition and most States have adopted a rule that allows avoided costs as a damages measure in trade secret cases. New York is the only state that has not passed a version of the Uniform Trade Secrets Act (“UTSA”) that explicitly allows avoided cost damages. As New York is a major hub of nearly every industry, many are urging New York to finally pass legislation following the USTA and ensure that parties have equal access to equitable remedies.

To read the full opinion in Syntel Sterling Best Shores Mauritius Ltd. v. TriZetto Grp., Inc., click here.

To read how Castaybert PLLC can assist you in employment and IP trade secret matters, click here and here.

July 10, 2023

When a company first gets wind of a potential lawsuit, often the first step is to begin implementing a litigation hold.

A litigation hold is a mandate within a company or organization to preserve relevant information. When a company reasonably foresees a lawsuit or investigation, it must begin preserving documents and information. Ensuring a litigation hold is completed thoroughly and effectively is key to satisfying the preservation obligations of litigation.

What must be preserved?

The scope of documents that must be preserved when litigation is foreseeable is often unique to the company, the dispute, and the amount of information stored electronically. Companies usually do not need to preserve the entirety of their information forever. But, when litigation or an investigation is reasonably foreseeable, there is a common law duty to preserve evidence related to the lawsuit. This duty seeks to minimize the spoliation of evidence to ensure all potentially relevant documents are kept and can be used later in litigation.

When should a business reasonably anticipate litigation?

The most challenging aspect of initiating a litigation hold is determining when a duty to preserve arises. Courts have generally found that a business should anticipate litigation when they

Receive notice of a credible threat of litigation or an investigation.
Receive a formal complaint.
Are involved in a pre-litigation dispute (such as receiving a demand or cease and desist letter).
Become aware of an internal complaint or accident.

Implementing and overseeing a litigation hold

When a business first receives a complaint or becomes reasonably aware of a potential legal claim, it should implement a litigation hold promptly. A litigation hold usually takes the form of an instruction given to relevant employees of the company to suspend document destruction, preserve certain information, paper documents, electronic documents, and records that would be relevant to the potential investigation or lawsuit.

A typical timeline of a litigation hold is as follows:

A business receives notice of a threat of litigation or an investigation.
A team within the company is created to oversee the litigation hold.
The team develops a plan by researching the internal document preservation procedures and identifying key personnel who have had access to the relevant documents, records, and information.
Drafting and distributing the litigation hold notice.
Routinely ensuring all pertinent individuals are following the litigation hold by tracking and systematic reminders.
Modifying the hold if new issues arise and lifting the hold when there is no longer a threat of an investigation or litigation.

It is also advisable to meet with any company IT personnel to discuss the accessibility and storage locations of any relevant electronically stored information to ensure full compliance with the litigation hold.

The stakes of failing to preserve information

Even though document preservation can be expensive given the large amounts of physical and electronically stored information, a company must postpone standard destruction processes and ensure the relevant documents are preserved to protect all parties’ right to a fair trial. Failing to preserve the relevant documents exposes the company to risks of significant legal consequences such as monetary sanctions or a default judgment.

To read how Castaybert PLLC can assist you with litigation, click here.