New York State Enacts a New Law to Protect Discrimination/Harassment Victims from Contracts that Would Seek to Silence Them

In 2022, the federal government enacted a law banning the enforcement of contractual clauses forcing victims of workplace sexual harassment to arbitrate their legal claims against their employers. (New York State earlier sought to create a similar ban in 2018 but was blocked by the legal rule of "federal preemption.") Now, New York State is seeking to lead again, with a new law that further expands the protection of workers who experience discrimination or harassment. This time it relates to those workers' rights to speak out against their harassers and their employers. If you're one of the many workers who has endured this sort of workplace misconduct, an experienced New York employment discrimination lawyer like the attorneys at Phillips & Associates can advise you about the full extent of your rights and your options to avoid being wrongfully silenced.

The bill (Senate Bill 4516,) which Governor Hochul signed into law on November 17, 2023, recognizes and addresses many of the realities regarding how the process works when a worker has experienced discrimination and harassment and subsequently takes legal action.

For many workers who have been harmed by this kind of misconduct and who decide to resolve their legal case via a settlement, receiving a monetary payment is far from the sole goal, as these workers understand that getting justice involves more than just your employer "cutting a check" and then continuing with business as usual as if nothing ever happened. A lot of workers desire not just financial recuperation but an opportunity to expose the wrongdoers publicly.

How Settlement Agreements Have Sought to Silence Victims

Employers (and their lawyers) know this, too, which is why they've historically insisted on the inclusion of confidentiality terms and/or provisions called "non-disparagement clauses" in settlement agreements they sign. These provisions seek to bar both sides from saying anything negative about the other side (after the completion of the settlement,) or saying anything at all about certain aspects of the case. This obviously works to undermine a worker who endured discrimination or harassment and wants to expose those who did it and/or enabled it.

The contract provisions would generally state that if any party violated these clauses, they would pay an automatic financial penalty -- either forcing them to forfeit part or all of the settlement payment they otherwise would have received, or to pay something called "liquidated damages.") Liquidated damages, in this context, is a pre-set sum of money a party owes if they breach one or more terms within a contract.

The law Governor Hochul signed on November 17 amends N.Y. General Obligations Law Section 5-336 (which was one of the earliest statutory responses to the #metoo movement) to say that these kinds of contract provisions are banned in New York State and are "void," which means they're not enforceable.

An End to Using Settlement to Force Victims to Deny Their Harassment/Discrimination

The new law also puts an end to another practice that some employers had engaged in. Some employers had used a worker's desire for a settlement to force the inclusion of a provision in the settlement agreement where the worker affirms that he/she, in fact, did not endure any form of illegal workplace discrimination and/or harassment. The new law prohibits and makes void these kinds of settlement agreement provisions, just as it does provisions dictating automatic financial penalties for speaking out.

It's important to recognize that the new law covers not just workers harmed by discrimination and/or discriminatory harassment, but also those who endured illegal retaliation at work after they took action to oppose discrimination or harassment. (Section 5-336 previously did not include workers who experienced illegal retaliation.)

Many workers will resolve (or at least consider resolving) their discrimination, harassment, or retaliation cases via settlement. There are many excellent reasons why a worker who endured discrimination, harassment, or retaliation might choose to settle, from the desire for a faster and more certain outcome to the preference of avoiding the pain and trauma of reliving the discrimination/harassment at a trial to countless other reasons. If you've experienced this kind of illegal conduct at work, you need a strong team on your side to protect your interests and your rights. The skillful New York employment discrimination attorneys at Phillips & Associates are here to be the trusted advisor and advocate you deserve. Our team is dedicated to helping workers get a fair outcome, whether via settlement or litigation. You can reach us online or by calling (833) 529-3476 to set up a free and confidential consultation. Call today so we can start going to work for you.

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