Governor Hochul Signs New Law Amending Limitations on Settlement Agreement Confidentiality and Providing Roadmap for Permissible Non-Disclosure Provisions

Employers and practitioners must be aware of several key changes to the amended Section 5-336 when drafting and implementing settlement agreements involving claims of employment discrimination, harassment or unlawful retaliation under New York law, including:

1. Complainants now have “up to 21 days” to consider a term or condition prohibiting the disclosure of the underlying facts or circumstances of their claim, meaning they can sign as soon as they wish to do so, as opposed to the previously non-waivable 21-day period, which practitioners felt caused unnecessary delays.
2. Provisions in settlement agreements resolving claims of unlawful harassment or retaliation that would prevent the disclosure of the underlying facts and circumstances of such claims are now prohibited, absent an express “preference” that such terms remain confidential.
3. Specific provisions that render a settlement agreement unenforceable when resolving a claim of unlawful discrimination, harassment or retaliation that includes a release of claims.
4. New protections for independent contractors who were previously not covered under Section 5-336. 

Our Labor & Employment Law team is available to help employers and others navigate these updated statutory provisions regarding the form and substance of settlement agreements, including that pertinent to a complainant’s preference for confidentiality, as well as to provide guidance regarding all other labor and employment-related matters. 

For more details regarding this legislation, see our Client Alert below.