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S04516 Text:

                STATE OF NEW YORK
                               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.

        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.
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