BILL NUMBER: S5404
SPONSOR: GOUNARDES
 
TITLE OF BILL:
An act to amend the general obligations law, in relation to nondisclo-
sure and non-disparagement agreements
 
PURPOSE OR GENERAL IDEA OF BILL:
To prohibit non-disclosure and non-disparagement agreements.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends Section 5-336 of the General Obligations Law to prohib-
it employers from including nondisclosure or nondisparagement agreements
(NDAs) in a waiver, settlement, agreement or other resolution of an
alleged violation of the human rights law or labor law, or otherwise
preventing an employee from disclosing their experience with the employ-
er. Such agreement may include language restricting an employer from
disclosing the identity of an employee and the circumstances surrounding
their complaint. Additionally, an employer may not include language in a
contract or application for employment as a condition of employment that
prohibits disclosure of information relating to any future alleged
violations of the human rights law or labor law or their experience with
the employer.
This section also strikes subdivision three of Section 5-336, which
renders settlement contracts invalid if they involve liquidated damages
for violation of a nondisclosure or nondisparagement agreement. This
language is unnecessary since NDAs would now be banned in other parts of
the bill.
Section 2 provides the effective date.
 
JUSTIFICATION:
Although New York has made significant strides in protecting victims of
sexual harassment and workplace discrimination, our laws still allow
harmful nondisclosure agreements (NDAs) to be included in settlement
agreements and in employment contracts. Under current law, a settlement
may only include an NDA if it is the victim's preference. But in prac-
tice, many victims of sexual harassment and discrimination are pressured
into signing an NDA, often to receive compensation for the harm they
experienced. While many victims of sexual harassment and workplace
discrimination prefer not to disclose their experiences publicly, NDAs
deny them that choice in the future and often prohibit them from even
speaking with a parent or close friend about their experience. Further-
more, NDAs prevent victims from warning future employees about a known
harasser or speaking publicly about their experience, if they so choose.
This legislation would align New York with Washington, New Jersey, and
California which have all recently passed legislation to ban NDAs for
workplace discrimination cases. This bill bars employers from including
an NDA or nondisparagement clause in a waiver, settlement, agreement, or
other resolution to an alleged violation of the Human Rights Law or
Labor Law. It also prohibits employers from otherwise preventing an
employee from disclosing their experience with the employer. Agreements
may still include language barring an employer from revealing the iden-
tity of an employee or the circumstances around their complaint provid-
ing important protection for victims who want privacy.
The bill also prohibits employers from requiring a prospective employee
to sign away their right to speak about workplace experiences or future
discrimination as a condition of employment. It does not prohibit an
employer from protecting trade secrets, proprietary information, or
other confidential information -- the original purpose of NDAs.
 
PRIOR LEGISLATIVE HISTORY:
2024: S4233 - Referred to Judiciary
2023: S4233 - Referred to Judiciary
2022: S8914 - Referred to Judiciary
 
EFFECTIVE DATE:
This act shall take effect on the sixtieth day after it shall have
become a law and shall apply to all applicable contracts entered into,
renewed, modified or amended on or after such effective date.

Statutes affected:
S5404: 5-336 general obligations law