Senate Bill S5404

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5404
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             February 21, 2025
                                ___________
 
 Introduced  by  Sens. GOUNARDES, BAILEY, FERNANDEZ, HOYLMAN-SIGAL, JACK-
   SON, KRUEGER, LIU, SALAZAR,  SEPULVEDA,  SKOUFIS  --  read  twice  and
   ordered  printed, and when printed to be committed to the Committee on
   Judiciary
 
 AN ACT to amend the general obligations law, in relation  to  nondisclo-
   sure and non-disparagement agreements

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 5-336 of the general obligations law, as amended by
 chapter 658 of the laws of 2023, is amended to read as follows:
   § 5-336. Nondisclosure AND NON-DISPARAGEMENT agreements. 1. AS USED IN
 THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   (A) "EMPLOYER" SHALL MEAN ALL PUBLIC AND PRIVATE EMPLOYERS WITHIN  THE
 STATE.
   (B)  "EMPLOYEE" SHALL MEAN ALL PUBLIC AND PRIVATE EMPLOYEES, INCLUDING
 APPLICANTS FOR EMPLOYMENT, FORMER EMPLOYEES,  PAID  OR  UNPAID  INTERNS,
 VOLUNTEERS  AND  NATURAL  PERSONS EMPLOYED AS INDEPENDENT CONTRACTORS TO
 CARRY OUT WORK IN FURTHERANCE OF AN EMPLOYER'S BUSINESS  ENTERPRISE  WHO
 ARE NOT THEMSELVES EMPLOYERS.
   2. (a) Notwithstanding any other law to the contrary, no employer, its
 officers,  AGENTS  or  employees  shall have the authority to include or
 agree to include in any WAIVER, settlement, agreement  or  other  resol-
 ution of any claim, the factual foundation for which involves [discrimi-
 nation,  harassment,  or  retaliation,  in violation of laws prohibiting
 discrimination,  including  discriminatory  harassment  or  retaliation,
 including  but not limited to,] AN ALLEGED VIOLATION OF THE LABOR LAW OR
 OF article fifteen of the executive law,  any  term  or  condition  that
 would  prevent the disclosure of the [underlying facts and circumstances
 to the claim or action unless the condition of  confidentiality  is  the
 complainant's  preference]  EMPLOYEE'S  WORKPLACE  EXPERIENCE  WITH  THE
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07796-02-5
 S. 5404                             2
              

 
 EMPLOYER. ANY SUCH TERM OR CONDITION  SHALL  BE  DEEMED  AGAINST  PUBLIC
 POLICY AND UNENFORCEABLE AGAINST AN EMPLOYEE.
   (b)  [Any  such  term  or condition must be provided in writing to all
 parties in plain English, and, if applicable, the  primary  language  of
 the complainant, and the complainant shall have up to twenty-one days to
 consider such term or condition. If confidentiality is the complainant's
 preference, such preference shall be memorialized in an agreement signed
 by  all  parties.  For  a  period  of  at least seven days following the
 execution of such agreement, the complainant may revoke  the  agreement,
 and  the  agreement  shall  not become effective or be enforceable until
 such revocation period has expired.
   (c) Any such term or condition shall be void to  the  extent  that  it
 prohibits  or  otherwise restricts the complainant from: (i) initiating,
 testifying, assisting, complying with a subpoena from, or  participating
 in  any manner with an investigation conducted by the appropriate local,
 state, or federal agency; or (ii) filing or disclosing any facts  neces-
 sary  to receive unemployment insurance, Medicaid, or other public bene-
 fits to which the complainant is entitled.
   2.] THE PROVISIONS OF THIS SUBDIVISION DO NOT PROHIBIT  THE  INCLUSION
 OR  ENFORCEMENT  OF  A  PROVISION  IN  ANY  AGREEMENT THAT PRECLUDES THE
 DISCLOSURE OF ANY MONETARY AMOUNT PAID IN SETTLEMENT OF A CLAIM.
   (C) THE PROVISIONS OF THIS SUBDIVISION DO NOT PROHIBIT  THE  INCLUSION
 OR ENFORCEMENT OF A PROVISION IN ANY AGREEMENT THAT RESTRICTS AN EMPLOY-
 ER  FROM REVEALING THE IDENTITY OF THE EMPLOYEE AND THE EXISTENCE OF AND
 CIRCUMSTANCES SURROUNDING THE EMPLOYEE'S COMPLAINT ABOUT WORKPLACE PRAC-
 TICES, EXCEPT AS REQUIRED BY LAW.
   (D) AGREEMENTS THAT  SETTLE  LEGAL  CLAIMS  BETWEEN  AN  EMPLOYER  AND
 EMPLOYEE  SHALL  STATE IN BOLD LANGUAGE THAT THE EMPLOYEE IS ENTITLED TO
 RECEIVE A COPY OF THE AGREEMENT IN THEIR PRIMARY LANGUAGE.
   3. Notwithstanding any provision of law to the contrary, any provision
 in a contract or other agreement OR APPLICATION FOR  EMPLOYMENT  between
 an  employer  or  an  agent  of  an employer and any employee, potential
 employee, or independent contractor of that employer entered into  AS  A
 CONDITION  OF  THE EMPLOYEE'S EMPLOYMENT, on or after January first, two
 thousand [twenty] TWENTY-SIX, that prevents the  disclosure  of  factual
 information  related  to  any  future  [claim of discrimination] ALLEGED
 VIOLATIONS OF THE LABOR LAW OR OF ARTICLE FIFTEEN OF THE EXECUTIVE  LAW,
 OR  THAT  PREVENTS THE DISCLOSURE OF THE EMPLOYEE'S WORKPLACE EXPERIENCE
 WITH THE EMPLOYER, is void  and  unenforceable  [unless  such  provision
 notifies  the  employee,  potential  employee, or independent contractor
 that it does  not  prohibit  the  complainant  from  speaking  with  law
 enforcement,  the  equal  employment  opportunity  commission, the state
 division of human rights, the attorney general, a  local  commission  on
 human  rights,  or  an  attorney  retained  by the employee or potential
 employee]. THE PROVISIONS OF THIS  SUBDIVISION  SHALL  NOT  PROHIBIT  AN
 EMPLOYER  AND  EMPLOYEE FROM AGREEING TO PROTECT TRADE SECRETS, PROPRIE-
 TARY INFORMATION, OR CONFIDENTIAL  INFORMATION  THAT  DOES  NOT  INVOLVE
 ALLEGED  VIOLATIONS OF THE LABOR LAW OR OF ARTICLE FIFTEEN OF THE EXECU-
 TIVE LAW. ANY SUCH  CONFIDENTIALITY  OR  NONDISCLOSURE  AGREEMENT  SHALL
 INCLUDE  A  STATEMENT  THAT THE EMPLOYEE HAS THE RIGHT TO SPEAK WITH LAW
 ENFORCEMENT, THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION,  THE  DIVISION
 OF  HUMAN  RIGHTS,  ANY  LOCAL  COMMISSION ON HUMAN RIGHTS, THE ATTORNEY
 GENERAL, ANY REGULATORY AGENCY THAT INVESTIGATES  WORKPLACE  CONDITIONS,
 OR AN ATTORNEY RETAINED BY THE EMPLOYEE OR POTENTIAL EMPLOYEE.
   [3.  Notwithstanding  any other law to the contrary, no release of any
 claim, the factual foundation  for  which  involves  unlawful  discrimi-
 S. 5404                             3

 nation,  including  discriminatory  harassment, or retaliation, shall be
 enforceable, if as part of the agreement resolving such claim:
   (a)  the  complainant  is  required  to  pay  liquidated  damages  for
 violation of a nondisclosure clause or nondisparagement clause;
   (b) the complainant is required to forfeit all or part of the  consid-
 eration  for  the  agreement, for violation of a nondisclosure clause or
 nondisparagement clause; or
   (c) it contains or requires any affirmative statement,  assertion,  or
 disclaimer  by  the  complainant  that  the  complainant was not in fact
 subject to unlawful discrimination, including discriminatory harassment,
 or retaliation.]
   § 2. 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.