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 Act (NYSHRL), has issued a notice stating that requests for Withdrawal of complaints will no longer be granted due to confidential private settlements after October 12, 2021..

If a complainant requests a discontinuance after this date before a hearing, his lawyer is required to provide a written statement of reasons. If a private settlement is a reason, the request will not be granted, and instead, the parties will be allowed to settle the matter publicly by way of a post-stipulated order that includes the terms of the settlement or by the through the DHR public hearing process.

This is an important development for employers given the far-reaching nature of the NYSHRL, which addresses, among many other issues, discrimination in employment. This law has grown considerably in recent years, especially with regard to allegations of sexual harassment. This includes the recent broadening of the definition of covered workers to broaden the number of people who can complain about harassment, lowering the level of a hostile work environment, the requirement for policies and training from the dealing employer. sexual harassment and the prohibition of clauses requiring arbitration before disputes.

Prior to this current rule, the state had already added a provision prohibiting nondisclosure clauses that prevent complainants from revealing the facts and circumstances surrounding the resolutions of harassment complaints. However, previously these laws allowed confidentiality as long as it was the preference of those making the complaint, but under this current policy, it would appear that is not an option.

This new rule does not mean that parties who file a complaint with the DHR will be unable to settle. However, a common reason for doing so, namely confidentiality, will no longer be possible. Under DHR’s new policy, Commissioner’s orders to end complaints in response to a private resolution will no longer be given. Instead, the terms of a settlement will be publicly disclosed either through a public hearing or an order. Given that the DHR reports that about 77% of cases identified as having a probable cause are resolved with settlements, with almost half of those achieved in private, this will be a significant change.

Employers will still have questions that will need to be clarified, for example whether this new rule applies only to cases that have been the subject of a probable cause determination, whether complainants can withdraw their complaints before a hearing and what terms of payment must be included in an Order after Stipulation. These issues will need to be addressed in time, but it is safe to say that many parties will be better served to attempt to reach a private resolution before filing a complaint.

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