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April 24, 2025
As Hollywood mogul Harvey Weinstein’s sexual assault retrial kicks off in New York, the time is ripe to revisit one of the legal reverberations occasioned by his public fall from grace.
It was one of the oldest, most insidious recipes in the Cookbook of Workplace Dispute Resolutions—one employee alleges that another employee disregarded personal boundaries, acted inappropriately, treated them differently on the basis of race, gender, religion, or another protected class, punished them for complaining about mistreatment, or otherwise discriminated, harassed, or retaliated against them—and the employer agrees to pay the complaining employee, but only if the employee agrees to keep quiet.
In the wake of the allegations against Weinstein and the grassroots spread of the #metoo movement, the public lost its appetite for this recipe, and gradually, it is becoming more difficult for employers to require and enforce “gag” or non-disclosure provisions in settlement agreements with aggrieved employees.
One of the earliest legal measures was enacted by the New York Legislature in 2018. The original General Obligations Law Section 5-336 limited non-disclosure requirements only in settlement agreements involving sexual harassment claims; however, in November 2023, an amendment expanded these restrictions to non-disclosure provisions in settlements involving claims of discrimination, other types of harassment, and retaliation.
The purpose of these limitations is to allow victims to decide whether they want to keep their allegations confidential, or whether they would rather have the freedom to disclose their stories, presumably in the hopes of preventing others from suffering the same treatment.
Employers settling these types of claims with New York employees must give the employee at least 21 days to decide whether they want to keep their claims confidential, and then the employees must be given seven days to revoke their agreement. These requirements can be waived, but only by the employee, who can choose to sign sooner.
In addition to putting confidentiality into the hands of the accusing employee, employers are limited in their selection of a remedy if the New York employee elects to keep their claims confidential, and then breaches that agreement. Releases of discrimination, harassment, and retaliation claims are unenforceable if the settlement agreement provides for liquidated damages or forfeiture (clawback) in the event of a breach of a non-disclosure provision.
Finally, settling New York employees cannot be compelled to sign a certification, declaration, attestation, or other statement disclaiming that the discrimination, harassment, or retaliation occurred.
New York is not alone. California, New Jersey, New Mexico, and Nevada all have passed similar legislation that limits or outright prohibits the inclusion of confidentiality and non-disclosure provisions in settlement agreements involving discrimination, harassment, or retaliation. Accordingly, when settling these types of claims, employers should be mindful of whether the applicable jurisdiction allows them to limit the settling employee’s ability to talk about their claims.
The author of this article, Helena I. Poch Ciechanowski, is a member of the Bars of New Jersey and Pennsylvania. This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice in New Jersey, Pennsylvania, New York, California, New Mexico, Nevada, or any other jurisdiction, nor does it establish an attorney-client relationship with any reader of the article where one does not exist. Always consult an attorney with specific legal issues.
