ATTENTION NEW YORK EMPLOYERS: PROHIBITIONS FOR SETTLEMENT AGREEMENTS RESOLVING DISCRIMINATION CLAIMS

How does the new law amend Section 5-336?

The new law provides that a release of any claim including unlawful harassment, discrimination or retaliation is not enforceable if it contains any of the following provisions:

• A requirement that the complainant pay liquidated damages for violating a nondisclosure clause or non-disparagement clause;

• A requirement that the complainant forfeit all or part of the consideration for the agreement for violating a nondisclosure or non-disparagement clause; or

• A requirement that the complainant state or disclaim that the complainant was not, in fact, subject to unlawful discrimination, including discriminatory harassment or retaliation;

In addition, the new law makes several key changes to Section 5-336.

• First, it expands the scope of Section 5-336 to include claims of discrimination, harassment, and retaliation.

• Second, the law now applies to settlement agreements with independent contractors and not just employees and potential employees.

• Third, the law now allows a complainant to waive the full 21-day waiting period to consider a settlement agreement containing a confidentiality provision preventing the disclosure of underlying facts and circumstances of a discrimination claim. 

What should employers do now?

Employers should carefully review any settlement agreements entered into after November 17th and any release agreements currently being drafted and negotiated, particularly if they contain non-disclosure provisions relating to the facts or circumstances of the underlying claims, a liquidated damages provision, or a forfeiture provision.

This document is designed for general information only. The information presented in this document should not be construed to be formal legal or tax advice nor the formation of a lawyer/client relationship. 

For more information on this and other topics, please contact Kevin via any of the channels listed below:

📧 kevin@kmckernan.com  | 📞 718-317-5007