New York State Expands Restrictions on Release Agreements for Discrimination and Harassment Claims

New York State Expands Restrictions on Release Agreements for Discrimination and Harassment Claims

New York Governor Kathy Hochul on November 17, 2023 signed into law Senate Bill 4516 (the “Bill”), which took effect immediately. Among other things, starting on November 17, 2023 for settlements relating to discrimination, harassment, or retaliation, the Bill (1) requires employers to revise common confidentiality provisions and (2) prevents employers from including certain provisions, including liquidated damages clauses. Specifically, an employer may not (absent employee consent) include a confidentiality provision in a release agreement for a claim of harassment and retaliation. The Bill also renders unenforceable any clause that would penalize the covered employee for violation of the agreement’s non-disclosure or non-disparagement clause with either a liquidated damages penalty or forfeiture of the consideration paid to the employee in exchange for entering into the release agreement.  The Bill applies these requirements also to applicants and independent contractors. New York employers should work closely with their lawyers to review and potentially revise any agreement templates that involve a confidentiality provision for harassment and retaliation claims.