On November 17, 2023, Governor Hochul signed into law an amendment to existing New York State Law, making unlawful liquidated damage or clawback provisions tied to non-disclosure and non-disparagement provisions in settlement agreements involving claims of harassment, discrimination and/or retaliation.
The amendment, which is available here, S4516, went into effect immediately. The law applies to all agreements entered into on or after the effective date.
A number of outstanding questions remain, including whether clawback or liquidated damage provisions can still apply to non-disclosure of the agreement itself or other confidential/proprietary information (as opposed to information about the underlying claims).
Make sure to consult with counsel to ensure your agreements are in compliance with the law.