On November 17, 2023, Governor Kathy Hochul signed into legislation S. 4516, amending General Obligations Law § 5-336. The amendment prohibits employers in settlement agreements resolving workplace discrimination claims, including discriminatory harassment and retaliation, from (i) requiring the complainant to pay liquidated damages if the complainant violates any non-disclosure or non-disparagement agreement included in the settlement agreement; (ii) requiring the complainant to forfeit all or part of the settlement amount for a breach of the non-disclosure or non-disparagement terms; and (iii) requiring an affirmative statement, assertion, or disclaimer by the complainant that the complainant was not subject to discrimination, harassment, or retaliation.

Section 5-336 of the General Obligations Law already requires employers to give employees twenty-one days to consider a confidentiality provision as part of any settlement of workplace discrimination claims and seven days to revoke their consent to such provision. The amendment extends the law’s protection to independent contractors and allows complainants to agree to confidentiality (and start the 7-day revocation period) without waiting the full 21 days.

The law took effect immediately upon signature and does not apply retroactively to agreements entered into prior to the effective date.

Employers should review their form of settlement agreements to ensure they comply with the amended law and keep the new terms in mind during any settlement negotiations.

If you have questions or concerns about this law or any federal or New York State employment or discrimination laws, please contact Chaim Book at cbook@booklawllp.com, Sheryl Galler at SGaller@booklawllp.com, or Nadav Zamir at NZamir@booklawllp.com.

Disclaimer: The information provided in this blog post is for general knowledge purposes only and should not be considered legal advice. For specific guidance tailored to your situation, it is advisable to consult with a qualified employment law professional.