Three New York Labor Bills Await Hochul; Texas Ties Data Center Breaks to Dry Cooling and Limits Insurance Arbitration

The bottom line today

388. That is how many bills were still sitting with Gov. Kathy Hochul as of November 9, out of 757 the New York Legislature passed this year [1]. Three of them would change how New York employers write severance agreements, bonus plans and employment contracts, and each takes effect the day it is signed [2, 5, 8]. Taken one at a time they read as modest. Taken together they move more pay disputes into court, on terms set after the fact. Texas, meanwhile, added two prefiled bills Thursday: a data center water bill with 16 Senate authors, and a House bill that would take pre-dispute arbitration out of property and casualty policies [11, 12, 14].

NY New York S372A: a 21-day clock on every severance offer

What it does. The No Severance Ultimatums Act, by Sen. Gianaris, adds Section 215-d to the Labor Law [2, 3]. Any employer offering severance in exchange for a release of waivable claims must tell the employee of the right to consult a lawyer, allow at least 21 calendar days to consider, and allow seven days to revoke after signing [2]. A worker may sign early only if the choice is knowing and voluntary, and an employer may not sweeten the deal for signing fast [2]. A noncompliant agreement is “void and unenforceable” [2]. Agreements negotiated under a collective bargaining agreement can waive the section [2].

Where it stands. Passed the Senate 42-17 on February 11 and the Assembly on June 1; the Senate’s record shows no delivery to the governor yet [3].

Pratt’s read. The sponsor’s memo makes the fair point: federal law already gives workers 40 and older 21 days and a seven-day revocation, and younger workers get nothing comparable [3, 4]. Many large employers already use the federal timeline for everyone. The cost lands on small firms and on quick separations, where a deal closed in a week now takes four weeks to become final. There is no size threshold, and the bill covers government agencies too [2]. The real risk is the remedy. A notice error voids the whole release [2].

NY New York S2236A: when a bonus becomes a wage

What it does. The Wage Payment Integrity Act, by Sen. Gounardes, redefines “wages” in Labor Law Section 190 to include any compensation not payable at the employer’s “sole and absolute discretion” [5]. To keep a bonus outside that definition, the employer must tell the employee so in a “clear, prominent, timely and uncontradicted fashion” [5]. If an employer cannot produce written pay terms on request, the employee’s version is presumed correct [5]. The benefits section’s exemption for executives earning over $1,300 a week would cover only its criminal penalties [5].

Where it stands. Passed the Senate 60-1 on March 10 and the Assembly on March 30 [6]. It applies to actions filed on or after the day it takes effect [5].

Pratt’s read. The sponsor’s memo argues courts have read “wages” too narrowly, leaving earned bonuses tied to group or market results unprotected, and that the uncertainty hurts honest employers too [6]. The lopsided Senate vote suggests few disagree with paying what was promised. The cost is in what comes attached. Under existing Section 198, an unpaid wage carries full attorney’s fees and liquidated damages equal to 100% of the amount due, with a six-year limitations period [7]. Financial firms, sales organizations, law firms and hospital systems with incentive plans should expect bonus disputes to arrive as wage claims. Because the bill keys to suits filed after enactment rather than to pay periods, and Section 198 allows six years to sue, bonuses earned before enactment appear to be within reach [5, 7].

NY New York S4424A: no more pre-dispute waivers

What it does. The Anti-Waiver of Employment Rights Act, by Sen. Ramos, adds Labor Law Section 219-e and Executive Law Section 302 [8]. Any contract term waiving or limiting an employee’s substantive or procedural rights under the Labor Law or the Human Rights Law is invalid [8]. Two exceptions: settlement of a good-faith dispute the employer did not raise, and an agreement made at or after termination [8]. The bill does not apply where federal law preempts it, and it spares dispute processes in collective bargaining agreements [8].

Where it stands. Passed the Senate 47-11 on February 25 and the Assembly on May 13 [9].

Pratt’s read. The bill’s findings target contract clauses that shorten the time to sue and waivers of class claims, which the Legislature says courts wrongly upheld [8]. That is the supporters’ case in their own words: these rights were always meant to be non-waivable. Goldberg Segalla notes the preemption carve-out matters for arbitration agreements governed by the Federal Arbitration Act [10]. So the arbitration clause likely survives. The shortened filing deadline in an offer letter does not. Read with S372A, the practical result is that the release moves to separation day, and then waits 21 days.

TX Texas SB 338: water terms on every data center incentive

What it does. SB 338, by Sen. Perry with 15 co-authors, sets conditions for data centers of 100,000 square feet or more [11, 12]. To get a school district value limitation, a city or county abatement, or a Chapter 380 grant, the owner must use dry, closed-cycle, saline or other water-efficient cooling, file water estimates and annual use reports, own or lease the site for the term, pay for environmental remediation and record a permanent deed restriction against other cooling [11]. City abatements for data centers are capped at 50% of eligible value [11]. Separately, the Public Utility Commission must bar grid connection in ERCOT for data centers that do not use those systems, and order disconnection for later violations [11]. The TCEQ could halt construction under its stormwater general permit [11].

Where it stands. Filed November 12 with 16 Senate authors [12]. As this release noted on November 11, SB 293 would repeal the data center sales tax exemptions outright.

Pratt’s read. Perry signaled this at a September 1 interim hearing, where he argued evaporative cooling has no place in a state with fragile water supplies, according to Holland & Knight’s account [13]. In a drought state that is a serious argument, and water planners need the data. Credit the bill for applying grid rules only to sites interconnected after the effective date [11]. The disconnection remedy is the part to fix. A missed annual water report should cost a fine, not grid service to the whole facility and every tenant inside it [11].

TX Texas HB 1117: pre-dispute arbitration out of P&C policies

What it does. HB 1117, by Rep. Morgan, adds Chapter 1815 to the Insurance Code [14, 15]. A binding arbitration clause in a property and casualty contract is void if it requires the insured to arbitrate before suing, waives remedies under Insurance Code Chapters 541 or 542 or the Deceptive Trade Practices Act, shortens a limitations period, puts the arbitration outside Texas, or charges fees well above a district court filing fee [14]. Arbitration is enforceable only if agreed after the dispute arises, signed separately, and on equal terms [14].

Where it stands. Filed November 12; it applies to policies issued or renewed on or after January 1, 2028 [14, 15].

Pratt’s read. This one pits business against business. Commercial policyholders, from contractors to farm operations, gain the same court access as homeowners, and the one-sided clauses the bill lists are hard to defend [14]. Insurers lose a cost-control tool, and litigation costs reach premiums eventually. No fiscal note exists yet to say by how much.

On the calendar

• No date set: Gov. Hochul’s action on S372A, S2236A and S4424A, which take effect on signing [2, 5, 8].
• January 12, 2027: The Texas Legislature convenes at noon; SB 338 and HB 1117 await referral [16].
• September 1, 2027: Effective date for both Texas bills if enacted [11, 14].

Whether Hochul signs all three, or asks for chapter amendments first, is the open question for New York employers this winter.