How New York's NDA Law Changed After #MeToo

The #MeToo movement triggered a wave of state-level legislative responses, and New York moved faster and further than most. Beginning in 2018 and accelerating through 2023, the New York Legislature enacted a series of statutes that significantly restricted the use of non-disclosure agreements in employment and settlement contexts. Understanding the scope and limits of these changes is essential for employers, employees, and their counsel negotiating NDAs in the state.

These reforms did not ban NDAs across the board. Trade secret NDAs, confidential business information agreements, and standard employment confidentiality clauses remain enforceable in New York. What changed is the legal landscape for NDAs connected to claims of sexual harassment, other forms of discrimination, and certain workplace misconduct.

CPLR 5003-b: Restricting NDAs in Sexual Harassment Settlements

New York Civil Practice Law and Rules § 5003-b, originally enacted in 2018 and strengthened in 2023, addresses non-disclosure provisions in settlements of claims involving sexual harassment. The statute has evolved significantly since its original enactment:

The original 2018 version required that any NDA in a sexual harassment settlement include a 21-day review period for the complainant and a 7-day revocation period, and that the confidentiality terms be at the request of the complainant, not the alleged harasser or employer. The 2023 amendments to New York General Obligations Law § 5-336 extended these protections broadly to settlements involving any form of discrimination, harassment, or retaliation under state or local law.

Under current law, a settlement agreement that resolves a claim of discrimination (including sexual harassment) may contain a confidentiality clause only if: (1) the complainant requests it; (2) the complainant is given at least 21 days to consider the agreement; (3) the complainant has 7 days to revoke after signing; and (4) the agreement explicitly states that it does not prevent disclosure to the complainant's attorney, to a government agency, or in connection with a future legal proceeding involving the same conduct.

The "complainant preference" rule: Under NY GOL § 5-336, a confidentiality clause in a discrimination settlement cannot be included at the employer's insistence. The complainant must affirmatively request confidentiality. Employers may not condition a settlement payment on the complainant's agreement to keep the terms confidential. If the complainant does not request confidentiality, the settlement terms are not restricted from disclosure.

The HERO Act and Workplace Safety Disclosures

The New York Health and Essential Rights Act (HERO Act), enacted in 2021, primarily addresses workplace safety planning for airborne infectious disease. While the HERO Act is not an NDA statute per se, it has NDA implications: employers may not prohibit employees from disclosing information about potential violations of the workplace safety plan or any conduct that the employee reasonably believes constitutes a health or safety violation.

Critically, any NDA provision that would restrict an employee from reporting HERO Act violations to the New York State Department of Labor or a government agency is unenforceable. This creates an important carve-out that employers must explicitly include in their NDA agreements to ensure compliance. A blanket confidentiality clause that sweeps in workplace safety communications may be partially or wholly void to that extent.

Trade Secrets and the Defend Trade Secrets Act

The federal Defend Trade Secrets Act (DTSA), 18 U.S.C. § 1836 et seq., provides the primary framework for trade secret protection in New York, supplemented by New York common law principles. Unlike the restrictions on harassment-related NDAs, trade secret NDAs remain fully enforceable in New York and are widely used in technology, financial services, pharmaceuticals, and media.

Under the DTSA, a trade secret is broadly defined as any business, scientific, technical, economic, or engineering information that: (1) the owner has taken reasonable measures to keep secret, and (2) derives independent economic value from not being generally known to, or readily ascertainable by, others who can obtain economic value from its disclosure. The misappropriation standard covers both direct theft and indirect acquisition through improper means.

A critical compliance point under the DTSA: any NDA entered into after May 11, 2016 must include a whistleblower immunity notice informing employees and contractors that they may disclose trade secrets to government officials or attorneys in connection with reporting a suspected legal violation, or in a court filing under seal, without liability for trade secret misappropriation. Failure to include this notice precludes the employer from recovering exemplary damages or attorney's fees in a subsequent DTSA action.

Do not use boilerplate NDA language in New York without review. Standard NDA templates downloaded from generic legal sites frequently lack the DTSA whistleblower immunity notice, the discrimination carve-outs required by GOL § 5-336, and the safe harbor language for government agency disclosures. Using a non-compliant template in a settlement context can render the entire confidentiality provision voidable by the other party.

Reasonable Scope Requirements for Enforceable NDAs

Even outside the #MeToo context, New York courts apply a reasonableness test to NDA provisions. A non-disclosure clause that is overbroad in scope, duration, or subject matter may be deemed unenforceable as contrary to public policy, particularly in the employment context.

New York courts analyze several factors when evaluating NDA scope: whether the information sought to be protected is genuinely confidential or is actually known in the industry; whether the duration of the non-disclosure obligation is reasonably related to the legitimate business interest being protected; whether the clause identifies the confidential information with sufficient specificity; and whether the obligation extends to information that, while technically confidential, an employee cannot reasonably be expected to segregate from their general professional knowledge.

Courts have been particularly skeptical of NDA provisions that would effectively prevent a departing employee from working in their field, treating such clauses as de facto non-competes that must satisfy the more stringent enforceability requirements applicable to restrictive covenants. Courts will not rewrite an overbroad NDA in New York; they are more likely to void the entire provision if it cannot be severed.

Choice of Law in New York NDAs

New York courts give significant deference to contractual choice of law provisions in commercial agreements. If an NDA specifies that it is governed by New York law, New York courts will generally apply that law, including New York's restrictions on harassment-related NDAs, even if the employee works primarily in another state. However, New York courts also apply the principle that a choice of law provision will not be given effect if it would violate a strong public policy of another state with materially greater interest in the dispute.

For multi-state employers, this creates complexity. An employer based in New York who requires employees in California to sign NDAs with a New York choice of law clause may find that California courts refuse to enforce that clause to the extent it conflicts with California's Business & Professions Code, which renders non-competes — and potentially some overbroad NDAs — void. Similarly, Washington State's Silenced No More Act has its own mandatory application provisions that may override a New York choice of law clause for Washington-based employees.

Practical Drafting Guidance for New York NDAs

A compliant and enforceable New York NDA should include: