NY Div of Human Rights Updates Private Settlements

The New York State Division of Human Rights has updated its rules on Private Settlements. The Division issued a significant update on the role of private settlements in the claims resolution process on October 1, 2021. As a result, the Division outlined a new procedure to effectively remove confidentiality from the settlement process.

According to the Division's new policy, any complaint filed on or after the October 12th deadline that requests discontinuance must include a written statement from the complainant's attorney explaining the request for discontinuance. The Division has stated unequivocally that no longer will a discontinuance and Commissioner's Order be granted for private settlements. To proceed with a settlement, the parties can either settle through a public order after stipulation that includes the agreed-upon terms or through the Division's public hearing process. Although parties before the Division may still settle, the Division's new public disclosure requirement effectively eliminates the strategic advantages associated with private settlements.

This policy change, which has always been in effect when the complainant is represented by Division counsel, will now be applied uniformly. However, there are still some unknowns. For example, it is unclear from the announcement whether this policy applies only to cases where probable cause has been established or whether the parties may settle a case at the preliminary investigative stage without these constraints. It is also unclear what terms the Division will ask the parties to agree to in order to resolve a matter that they otherwise wish to resolve mutually, how involved the agency will be in negotiating settlement terms, and whether an attorney will be assigned to engage in such conciliation efforts at an earlier stage.

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