Confidentiality of Discrimination and Harassment Settlements in New York

By Jessica M. Baquet

 

In the last two years, the New York legislature has passed numerous changes to state laws about confidentiality provisions in workplace discrimination and harassment settlement agreements. These laws are an outgrowth of the #metoo and #timesup movements, which have shone a spotlight on victims of sexual harassment who are gagged from speaking about what they endured.

The first round of changes took effect in 2018, when New York amended General Obligations Law (“GOL”) § 5-336 so as to prohibit employers from including in a sexual harassment settlement agreement any provision preventing the disclosure of the underlying facts, unless such the provision is the alleged victim’s preference.

However, even if the alleged victim prefers confidentiality, the amendments to the law now require the parties to following certain steps in order for their agreement to be valid. The alleged victim must be given twenty-one days to consider the confidentiality provision. If he or she decides that confidentiality is preferable, the parties must enter two separate agreements: one that memorializes the victim’s preference and another that incorporates that preference into the larger settlement. The alleged victim then has seven days to revoke his or her consent to the confidentiality provision, and the provision will not become binding until those seven days have passed.

In 2019, New York amended GOL § 5-336 again to make these rules applicable not only to sexual harassment claims, but all manner of employment discrimination and harassment claims.

Further changes were ushered in with the new year. Effective January 1, 2020, GOL 5-336 was amended once more to provide mandatory exceptions to confidentiality provisions in discrimination or harassment settlements. Now, regardless of the alleged victim’s preference, confidentiality provisions cannot prevent the alleged victim from initiating, participating in or cooperating with an investigation by federal, state or local agencies, or from disclosing such facts as are necessary for the alleged victim to receive any public benefits to which he or she may be entitled. To the extent the parties attempt to agree to prohibit these types of disclosures, their agreement is void.

When an employee makes allegations of discrimination or harassment, employers often view confidentiality provisions as an essential part of any settlement agreement. Those provisions are no longer easy to come by, and will not be worth the paper they are written on unless all legal requirements are met. As those requirements continue to change at a breakneck pace, the advice and counsel of a competent New York employment attorney are more important to employers now than ever before.