Governor Kathy Hochul has recently signed S4516, which makes significant alterations to New York state law on release agreements in the realms of harassment, discrimination, and retaliation. This new rule places limits on release agreements that pertain to both “discriminatory harassment” and “retaliation”. New restrictions on terms have been imposed. As a result, release agreements for discriminatory harassment and retaliation are not enforceable if they contain the following provisions:

- Any liquidated damages provision that would require an employee to pay for disparagement of the employer or for a nondisclosure violation.

- Any compensation forfeiture provision that would have an employee lose any promised consideration due to disparagement of the employer of violation of a nondisclosure provision.

- A statement prepared by the employer that has the employee affirm that he or she was not the target of harassment, discrimination, or retaliation.

Employees must be given at least 21 days to consider any release agreement pertaining to discriminatory harassment or retaliation as well as 7 days to revoke written consent. The 21-day consideration period is waivable through a written agreement (pre-litigation), but the 7-day revocation period is not.

This law went into effect immediately upon signing (November 17, 2023). Employers should review their contract language to ensure that language complies with the new requirements.

You can read the entire law HERE.