New York #MeToo Law Limits Damages for Nondisclosure Violations

A new law in New York bars nondisclosure agreements that require parties to pay liquidated damages if they later speak out about sexual harassment and other workplace abuse.

Gov. Kathy Hochul (D) signed the bill (SB 4516) late Friday.

Allowing liquidated damages in nondisclosure agreements means plaintiffs who settle their sexual harassment claims face higher penalties for speaking out later, which can be a source of leverage for the defendants, said Erica Vladimer, an attorney and co-founder of the Sexual Harassment Working Group, comprised of former legislative staffers who advocate against sexual abuse in state government.

The new law means parties to NDAs have to prove real economic harm for supposed breaches of the agreements.

Nondisclosure agreements prior to this law were “just another way to hold the victims silent and keep them quiet so you can continue to protect the abuser and the institution,” said Vladimer. “You should have to prove that there is actual economic harm as a result of a victim speaking out.”

The measure, which takes effect immediately, is one of many laws approved by New York lawmakers in recent years in response to the #MeToo movement. Proponents say legal tools like settlements with nondisclosure agreements enabled continued violations similar to the behavior of Harvey Weinstein.

State lawmakers in New York eventually enacted a series of changes that included redefining sexual harassment in 2019 as behavior that went beyond “petty slights and trivial inconveniences” rather than the “severe and pervasive” standard previously under state law.

State lawmakers overwhelmingly approved the bill affecting NDAs, first introduced in 2015, in the legislative session that concluded in June.

Liquidated damages became a target of anti-harassment efforts in New York following cases involving former Assemblyman Vito Lopez (D), who resigned in 2013 amid a litany of accusations of harassment and other misbehavior.

In addition to curbing liquidated damages, people alleging harassment will no longer have to sign statements that they were “not in fact subject to unlawful discrimination, including discriminatory harassment, or retaliation” as part of the law.

“It’s one of those things where like it’s so niche and technical,” said Vladimer, “but we know that when it comes to the real experience of a survivor when they’re trying to seek justice, these are the barriers that they face.”