STATE OF NEW YORK ________________________________________________________________________ 4516 2023-2024 Regular Sessions IN SENATE February 9, 2023 ___________ Introduced by Sen. FERNANDEZ -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary AN ACT to amend the general obligations law, in relation to violations of nondisclosure agreements in certain settlement agreements The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 5-336 of the general obligations law, as amended by 2 chapter 160 of the laws of 2019, is amended to read as follows: 3 § 5-336. Nondisclosure agreements. 1. (a) Notwithstanding any other 4 law to the contrary, no employer, its officers or employees shall have 5 the authority to include or agree to include in any settlement, agree- 6 ment or other resolution of any claim, the factual foundation for which 7 involves discrimination, harassment, or retaliation, in violation of 8 laws prohibiting discrimination, including discriminatory harassment or 9 retaliation, including but not limited to, article fifteen of the execu- 10 tive law, any term or condition that would prevent the disclosure of the 11 underlying facts and circumstances to the claim or action unless the 12 condition of confidentiality is the complainant's preference. 13 (b) Any such term or condition must be provided in writing to all 14 parties in plain English, and, if applicable, the primary language of 15 the complainant, and the complainant shall have up to twenty-one days to 16 consider such term or condition. If [after twenty-one days such term or 17 condition] confidentiality is the complainant's preference, such prefer- 18 ence shall be memorialized in an agreement signed by all parties. For a 19 period of at least seven days following the execution of such agreement, 20 the complainant may revoke the agreement, and the agreement shall not 21 become effective or be enforceable until such revocation period has 22 expired. 23 (c) Any such term or condition shall be void to the extent that it 24 prohibits or otherwise restricts the complainant from: (i) initiating, 25 testifying, assisting, complying with a subpoena from, or participating EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD02527-01-3
S. 4516 2 1 in any manner with an investigation conducted by the appropriate local, 2 state, or federal agency; or (ii) filing or disclosing any facts neces- 3 sary to receive unemployment insurance, Medicaid, or other public bene- 4 fits to which the complainant is entitled. 5 2. Notwithstanding any provision of law to the contrary, any provision 6 in a contract or other agreement between an employer or an agent of an 7 employer and any employee [or], potential employee, or independent 8 contractor of that employer entered into on or after January first, two 9 thousand twenty, that prevents the disclosure of factual information 10 related to any future claim of discrimination is void and unenforceable 11 unless such provision notifies the employee [or], potential employee, or 12 independent contractor that it does not prohibit [him or her] the 13 complainant from speaking with law enforcement, the equal employment 14 opportunity commission, the state division of human rights, the attorney 15 general, a local commission on human rights, or an attorney retained by 16 the employee or potential employee. 17 3. Notwithstanding any other law to the contrary, no release of any 18 claim, the factual foundation for which involves unlawful discrimi- 19 nation, including discriminatory harassment, or retaliation, shall be 20 enforceable, if as part of the agreement resolving such claim: 21 (a) the complainant is required to pay liquidated damages for 22 violation of a nondisclosure clause or nondisparagement clause; 23 (b) the complainant is required to forfeit all or part of the consid- 24 eration for the agreement, for violation of a nondisclosure clause or 25 nondisparagement clause; or 26 (c) it contains or requires any affirmative statement, assertion, or 27 disclaimer by the complainant that the complainant was not in fact 28 subject to unlawful discrimination, including discriminatory harassment, 29 or retaliation. 30 § 2. This act shall take effect immediately and shall apply to agree- 31 ments entered on or after such date.