A SNAPSHOT OF WHAT YOU NEED TO KNOW

• New York Governor Kathy Hochul recently signed into law two bills impacting employment discrimination protections in the State.
• The first bill prohibits liquidated damages and forfeiture of consideration for breach of a nondisclosure or nondisparagement clause in an agreement to settle claims of discrimination, harassment, and/or retaliation.
• The second bill extends the statute of limitations period to file a complaint with the New York State Division of Human Rights (“NYSDHR”) for unlawful discrimination from one to three years.

1. AMENDMENTS TO THE NY GENERAL OBLIGATIONS LAW (“NYGOL”)

Senate Bill S4516, which took effect immediately upon passage, amends the NYGOL Section 5-336 that was originally passed in response to the #MeToo movement. Upon its initial passage, the law limited the use of confidentiality agreements in connection with sexual harassment claims. A year after its original passage, the law was amended to expand protections beyond sexual harassment to include other forms of discrimination. In accordance with S4516, protections under Section 5-336 of NYGOL have been further expanded to cover not only claims involving discrimination, but also claims involving “discriminatory harassment and retaliation.”

Section 5-336 of the NYGOL continues to generally prohibit the inclusion of nondisclosure provisions in a release agreement involving claims of discrimination, unless confidentiality is the employee’s preference, and the employee is given 21 days to consider the agreement and 7 days to revoke the agreement. S4516 now provides that this 21-day consideration period is waivable. That being said, S4516 does not amend Section 5003-B of the New York Civil Practice Law and Rules (“CPLR”), which continues to require employees to wait the full 21 days before signing an agreement containing a nondisclosure provision that would prevent the disclosure of the underlying facts and circumstances of any discrimination claim. Thus, the 21-day consideration period for non-disclosure provisions may be waived pre-litigation, but is not waivable if the discrimination claim is filed in court, where the CPLR applies.

S4516 further renders a release of discrimination, harassment, and retaliation claims unenforceable if the release requires an employee to pay liquidated damages for violating a nondisclosure or nondisparagement clause or requires the employee to “forfeit all or part of the consideration for the agreement” for violating such a clause. Notably, a valid release may also not require an employee to make “any affirmative statement, assertion, or disclaimer” that they were not subject to unlawful discrimination, harassment, or retaliation.

Significantly, these recent amendments apply to independent contractors, as well as employees and applicants.

2. EXTENSION OF STATUTE OF LIMITATIONS UNDER NEW YORK STATE HUMAN RIGHTS LAW (“NYSHRL”)

Assembly Bill A501, which was enacted on November 17, 2024, extends the time frame to file a complaint with the NYSDHR for unlawful discrimination, harassment, or retaliation from one to three years from the last act of the discrimination, harassment, or retaliation at issue.

YOUR TAKEAWAYS

New York employers should review their separation and release agreements to ensure compliance with the above amendments and be prepared to face a possible increase in complaints lodged with the NYSDHR after the new statute of limitations goes into effect.