Mark Goldstein contributed to the content of this post.

On the heels of a potentially pivotal ruling that unpaid interns cannot assert claims of discrimination and harassment, one New York State senator has introduced reactionary legislation that would effectively nullify the decision and open the floodgates to employment discrimination claims from a class of workers that is not actually employed.

As we more fully discussed here, on October 3, Federal District Judge Kevin Castel declared that unpaid laborers may not sue for discrimination or harassment under the New York City Human Rights Law, one of the nation’s most expansive workplace regulations. The decision hinged on the Court’s conclusion that, in the absence of compensation, an allegedly aggrieved worker may not pursue claims under the city law, regardless of merit.

In the immediate wake of Judge Castel’s ruling, State Senator Liz Krueger has introduced a bill effectively treating interns as employees for purposes of the state’s anti-discrimination laws. The proposed legislation would make it unlawful to discriminate against an intern on the basis of the intern’s protected trait or membership in a protected class. It would also prohibit employers from engaging in any “verbal or physical conduct of a sexual nature” directed toward an intern. The bill even extends its protections to pregnant interns, barring companies from compelling a pregnant intern to take a leave of absence. At present, the Senate Rules Committee and the State Assembly’s Governmental Operations Committee, to which Senator Krueger’s legislation has been referred, are deliberating over the bill.

How Does This Affect My Company?

If enacted, the proposed bill would transform Judge Castel’s decision, initially hailed by employers, into a short-lived victory. Although passage of the bill will be complicated by several obstacles, employers should, in the meantime, consult with counsel regarding the structure, implementation, and risks and rewards of operating unpaid labor programs. In a constantly-evolving legal landscape, a pragmatic approach to the use of unpaid laborers should be able to minimize or reduce potential exposure.