New York Expands Restrictions on Confidentiality Agreements in Discrimination Cases

What Changed

On November 17, 2023, Governor Hochul signed Senate Bill S4516, expanding New York's restrictions on confidentiality and non-disclosure provisions in employment settlement agreements. Previously, New York law prohibited confidentiality clauses in settlements resolving sexual harassment claims. S4516 broadens this prohibition to cover settlements involving all forms of discrimination, discriminatory harassment, and retaliation.

Under the amended law:

• Employers may not include confidentiality provisions that restrict disclosure of the underlying facts and circumstances of discrimination, harassment, or retaliation claims unless the employee affirmatively chooses confidentiality

• Employees must be given 21 days to consider signing a confidentiality provision, followed by 7 days to revoke the agreement

• Settlement agreements that include liquidated damages or forfeiture clauses for breaching a non-disclosure or non-disparagement provision are void

• Agreements requiring the employee to affirm they were not subject to unlawful discrimination are also void

Who Is Affected

All New York employers who enter into settlement or release agreements resolving claims of discrimination, harassment, or retaliation. This applies regardless of employer size.

Where It Applies

New York statewide. The law applies to all agreements signed or entered into after November 17, 2023.

When It Takes Effect

Immediately upon signing — November 17, 2023. All settlement agreements executed after this date must comply.

Why It Matters

This significantly changes how employers can structure settlement agreements in New York. The broad scope — covering all discrimination, not just sexual harassment — means nearly every employment-related settlement must now comply with the 21-day consideration, 7-day revocation, and employee-choice requirements. Employers who include prohibited provisions risk having the entire release agreement voided.

This law is part of a national trend toward restricting the use of NDAs in employment disputes, reflecting growing concern that confidentiality provisions suppress disclosure of systemic workplace problems.

The Humareso Take

If you settle employment disputes in New York — and most employers eventually do — your templates need updating. The key shift is that the employee must choose confidentiality; you cannot impose it. And the penalty for getting it wrong is severe: a voided release agreement means you paid a settlement and got nothing in return. Have your legal counsel review every settlement template you use for New York employees immediately.

Recommended Action Steps

1. Review and update all settlement agreement templates to comply with S4516's expanded restrictions on confidentiality provisions.

2. Ensure all future settlement agreements include the required 21-day consideration period and 7-day revocation window for any confidentiality provisions.

3. Remove any provisions that impose liquidated damages or forfeiture for breach of non-disclosure or non-disparagement clauses.

4. Train your legal and HR teams on the new requirements and the risk of voided agreements.

5. Contact your Humareso representative or employment counsel for a review of your New York settlement agreement practices.