The New York State Division of Human Rights (“NYSDHR”) recently announced a shift in policy such that complaints filed on or after October 12, 2021 can no longer be resolved through private settlement.

The NYSDHR implemented this change following its determination that approximately half of all settlements that follow a probable cause determination are private without public record. According the NYSDHR, it has “a vested interest in the ultimate resolution of all cases – even cases with private counsel – to ensure that the terms of any settlement comply with [its] basic standards and do not violate public policy.”

As a result of this change, after a probable cause determination, a complainant’s attorney will be required to set forth in writing the reasons why the complainant seeks an order discontinuing a case. If the reason is private settlement, a discontinuance will not be granted. Instead, the parties will be encouraged to settle the matter after a stipulation indicates the terms of the settlement or proceed through the NYSDHR’s public hearing process.

This change is illustrative of other efforts within New York to prohibit employers from shielding the facts and circumstances of any discrimination, harassment or retaliation claims. Recent changes to Section 5-336 of the General Obligations Law and Section 5003-b of the New York Civil Practice Law and Rules, for example, effectively ban nondisclosure clauses that would prevent the disclosure of the underlying facts and circumstances in settlements of harassment claims.

Parties proceeding before the NYSDHR will still be able to settle disputes, but confidentiality, often a key incentive, can no longer be a condition. Employers may be best served to explore resolution of a threatened action prior to an aggrieved employee filing a complaint.

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