New York Federal Court Ruling Highlights a Potential Pitfall in Settlement Agreement Enforcement
On January 8, 2025, the U.S. District Court for the Eastern District of New York held that an employee’s refusal to sign a confidentiality and nondisparagement acknowledgment form annexed to a settlement agreement resolving discrimination and retaliation claims invalidated the entire agreement. Quick Hits New York’s General Obligations Law (GOL) § 5-336 and Civil Practice Law and Rules (“CPLR”) § 5003-B both impose strict requirements on nondisclosure clauses in matters involving discrimination claims, including that the inclusion of such clauses in a settlement agreement be at the plaintiff’s preference. The U.S. District Court for the Eastern District of New York recently held that an unsigned GOL § 5-336 and CPLR § 5003-B acknowledgment form annexed to a settlement agreement did not constitute a separate settlement agreement; rather, it was “a material component of the broader [s]ettlement [a]greement,” as its execution was required to make the settlement agre...