Cuomo to sign ban on work discrimination nondisclosure agreements

On June 19, the last day of the New York state legislative session, both the Assembly and Senate passed almost unanimously AB 8421 (same as SB 6577), an important bill that adds several protections to state law for victims of sexual harassment and other workplace discrimination. We discuss other components of the bill in other blogs, but today we will talk about the bill’s prohibition on nondisclosure agreements, sometimes called NDAs, in settlement agreements, unless the victim wants the condition to keep the matter private.

It is widely reported that New York Gov. Andrew Cuomo will sign the bill. The provisions related to nondisclosure agreements are to take effect 60 days from enactment. The bill applies to all employers in the state, including state government employers, and to independent contractors.

A wider ban

The law will expand a previous ban on employer-imposed NDAs in settlement agreements of sexual harassment claims to forbid employer-dictated NDAs in claims of all kinds of illegal workplace discrimination and harassment, including sexual harassment.

The law will require that the employer propose in writing and in “plain English” and in the “primary language of the complainant” any proposed NDA provision in an agreement to settle the claim. The alleged victim will have 21 days to decide whether they want to keep the underlying incident secret and out of the public realm. If the claimant prefers the confidentiality provision, after the parties execute the agreement, the victim still has at least seven days to revoke it if they change their mind about the NDA provision.

An agreement cannot ban disclosure in some contexts

Even if the claimant agrees to an NDA, disclosure restrictions will automatically be void if they would involve:

• Providing information pursuant to a subpoena
• Participating in an investigation by a government agency
• Applying for unemployment insurance, Medicaid or other public benefits

In addition, any such NDA signed after 2019 that prohibits sharing information about a future discrimination claim will be void and unenforceable, unless the NDA includes notice to the employee that the agreement does not prevent disclosing facts about the claim to law enforcement, the Equal Employment Opportunity Commission, known as the EEOC, or the state or any local human rights agencies.

Public policy

The June 18 New York Committee Report on the bill justifies the new package. The report acknowledges the Me Too and Times Up movements that organized in response to the 2017 surge of horrific sexual harassment incidents coming to light. In 2018, the New York Legislature enacted the first wave of reforms to combat workplace sexual harassment. This new bill enhances that legislation by strengthening protections against sexual harassment and extending them to all other kinds of illegal discrimination and harassment.

Once the governor signs the bill, any employer or employee in the state with questions about the application of its provisions should speak with a knowledgeable attorney.