By Jean Schroll, Esq.
On October 1, 2021, the New York State Division of Human Rights (the “Division”) announced that, for all complaints filed on or after October 12, 2021, it will no longer issue Commissioner’s Orders discontinuing complaints after private settlement. This is a significant change because, as the Division notes, “nearly half of all post-probable cause settlements are private settlements without any public record of the terms of the settlement.”
Prior to this announcement, employers and complainants could negotiate a private settlement and simply request a Commissioner’s Order to discontinue the complaint. The terms of the private settlement did not need to be disclosed to the public, or even to the Division. For all complaints filed on or after October 12, 2021, however, this is no longer a possibility. Now, after a probable cause determination, a Complainant’s attorney will be required to state in writing why they are seeking a discontinuance, which will not be granted if the reason is private settlement.
Instead, the parties must either: (a) settle the matter through an Order after stipulation that includes the settlement terms, or (b) proceed through the public hearing process. This effectively eliminates the ability to confidentially settle a matter without public disclosure of the terms – one of the major draws of settling privately in the first place.
The Division states it is making this change “in the public interest for increased transparency and good governance regarding settlements.” It further states that, as all cases are brought in the name of the Division, it has a vested interest in each outcome to ensure that the terms of the settlement comply with the Division’s standards and do not violate public policy.
A few questions remain. First, it is unclear if the new prohibition only applies in cases where a probable cause determination has already been issued, or if the parties can still privately settle up to that point. Second, the announcement does not specify exactly which terms must be included if the matter is settled through an Order after stipulation.
For many employers, confidentiality is a material term that weighs heavily in a decision to settle. Going forward, employers should carefully consider the impact of this announcement when strategizing settlement negotiations for a matter pending before the Division.
The Division’s announcement can be accessed here: https://dhr.ny.gov/discontinuance-private-settlements.
Please contact me or a member of NFC’s litigation team if you have any questions about the Division’s announcement.