The state of New York has updated its laws regarding nondisclosure agreements in the workplace. It is important to understand what these changes mean for employees in New York.
NDAs have come under greater scrutiny since social movements like #MeToo have exposed how powerful people like Harvey Weinstein have used NDAs in the past to hide claims of harassment, discrimination and retaliation.
What is an NDA?
Many businesses use NDAs to protect their business interests. Most companies have information that they want to protect, whether it’s trade secrets, financial information or other valuable data that they do not want to fall into the hands of competitors or made public if employees switch jobs or leave. The original intent of NDAs was to provide businesses with protections that would keep them competitive with those around them. An NDA is generally not supposed to prevent an employee from reporting illegal activity at the company, but unfortunately many employees do not understand exactly what they are agreeing to when they sign an NDA.
How has New York changed NDA laws?
The state of New York has updated NDA laws to better protect victims of sexual harassment or discrimination in the workplace. An employer is no longer allowed to require an NDA in the terms of any settlement related to harassment or discrimination. The person filing the complaint may still sign an NDA if they prefer it, but they have to make that preference clear in a signed agreement. There is a period of 21 days when the complainant may consider the NDA and decide whether or not they want to sign. After signing, the complainant has seven days to back out of the agreement if they so wish.