New York State Division of Human Rights Prohibits Confidential Settlements

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New York State Division of Human Rights Prohibits Confidential Settlements

The New York State Division of Human Rights (DHR), which enforces the New York State Human Rights Law (NYSHRL), has issued a notice that requests for discontinuance of complaints will no longer be granted due to confidential private settlements after October 12th, 2021. 

If a complainant requests a discontinuance after this date prior to a hearing, their attorney is required to provide a written statement of the reasons why. If a private settlement is a reason why, the request will not be granted, and instead, the parties will be permitted to publicly settle the matter through an Order after stipulation that includes the terms of the settlement or through the DHR’s public hearing process.

This is a significant development for employers considering the far-reaching nature of the NYSHRL, which addresses, among numerous other issues, employment discrimination. This law has grown considerably in recent years, particularly where it concerns claims of sexual harassment. This includes recently expanding the definition of covered workers to expand who can bring claims of harassment, lowering the standard of a hostile work environment, requiring employer policies and training dealing with sexual harassment, and forbidding clauses requiring arbitration prior to disputes.

Prior to this current rule, the state had already added a provision prohibiting non-disclosure clauses that prevent complainants from revealing the facts and circumstances surrounding resolutions to harassment claims. However, previously these laws permitted confidentiality provided that it was the preference of those bringing the complaint, but under this current policy, it would appear that this is not an option.

This new rule does not mean that parties bringing a complaint before the DHR will be incapable of settling. However, a common reason for doing so, namely privacy, will no longer be possible. Under the DHR’s new policy, Commissioner’s Orders to discontinue complaints in response to a private settlement will no longer be given. Instead, the terms of a settlement will be disclosed publicly either through a public hearing or an Order. Given that the DHR reports that approximately 77% of cases found to have probable cause are resolved with settlements, with nearly half of those being reached privately, this will be a significant change. 

Employers still will have some questions that will need to be cleared up, such as whether this new rule only applies to cases that have received a determination of probable cause, whether complainants may withdraw their complaints prior to a hearing, and what terms of the settlement must be included in an Order after Stipulation. These issues will need to be ironed out in time, but it is safe to say many parties will be best served to attempt to reach a private settlement prior to filing a complaint.