Restrictions and New Requirements for Settlement Agreements

On November 17, 2023, New York Governor Kathy Hochul signed into law a bill amending the New York law governing settlement agreements between employers and employees resolving claims of harassment, discrimination and retaliation. The amendment prohibits including certain terms in such agreements. Specifically, such release agreements are now unenforceable if they include any of the following provisions:

• A liquidated damages provision awarding the employer liquidated damages if the employee violates a nondisclosure or non-disparagement clause;
• A forfeiture provision requiring the employee to forfeit all or part of the settlement amount if the employee violates a nondisclosure or non-disparagement clause; or
• A provision requiring the employee to affirm, assert, or disclaim that he or she was not actually subject to unlawful discrimination, harassment, or retaliation.

Additionally, while the law previously required employees to wait a full 21 days before signing a nondisclosure agreement, the amendment states that employees can now waive the 21-day requirement. The amendment also clarified that confidentiality provisions in release agreements are only enforceable if the employee explicitly states, in a separate written agreement, that they prefer for the agreement to be confidential.

The new law went into effect upon the Governor’s signature and applies to all release agreements entered into on or after November 17, 2023.



Increased Statute of Limitations

Governor Hochul also signed into law a bill affecting the statute of limitations for New York State Human Rights Law (“NYSHRL”) claims brought before the New York State Division of Human Rights (DHR). Previously, claimants had three years to file claims of sexual harassment under the NYSHRL with the DHR, while all other discrimination claims had to be brought within one year of the alleged unlawful acts. The amendment increases the statute of limitations for all discrimination, harassment, and retaliation claims, not only those concerning sexual harassment, to within three years of the alleged unlawful act. The expanded statute of limitations goes into effect on February 15, 2024, and applies to claims that accrued on or after that date.

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If you have questions or would like additional information, please contact our Labor & Employment attorneys or the primary EGS attorney with whom you work.