Non-disclosure agreements are a standard tool for employers to protect against the release of trade secrets or confidential information by their employees. On the heels of the recent Hollywood sexual harassment allegations, these agreements may become subject to a new law in the settlement agreement context if two New York lawmakers have their way. The bill was introduced earlier this year by State Senator Brad Hoylman and Assemblywoman Nily Rozic.

Following the recent sexual harassment allegations against Hollywood movie producers, Hoylman and Rozic added new language to the bill specifically targeting sexual harassment claims in the workplace. If signed into law, the bill would nullify non-disclosure provisions in separation and settlement agreements that conceal claims of harassment, discrimination, retaliation or non-payment of wages.  While Hoylman has yet to officially submit the new language to the bill as the state legislature does not meet until January, a debate is likely to ensue between proponents of this bill who believe this will help curb toxic corporate cultures, and opponents who feel that the bill may actually make it harder for victims of sexual harassment to receive adequate compensation in a settlement because there is sometimes a price paid for confidentiality.

The issue of sexual harassment in the workplace has occupied much of the news for the past several months, and legislators seem eager to respond. In fact, California has already implemented limits on confidentiality agreements involving felony sexual assault and child sex abuse, and is considering next year to bar settlement in harassment cases.

In any event, New York employers should be sure to keep an eye out as the bill progresses through debate.