Private Settlements of Employment Discrimination Claims Prohibited
The Division of Human Rights (the “Division”) is the state agency charged with investigating claims of unlawful discrimination and harassment in employment. After a complaint is filed, the Division conducts an investigation in order to determine whether or not probable cause exists to believe that unlawful discrimination or harassment took place. If there is no probable cause, the complaint is dismissed. However, where probable cause is found to exist, the Division schedules the matter for a public hearing before an administrative law judge.
It has been our experience that the vast majority of the complaints are dismissed after investigation for lack of probable cause. When the Division finds probable cause, those cases are often settled prior to hearing. However, the Division just implemented a new policy for all complaints filed after October 12, 2021. The Division will no longer grant discontinuances for private settlements.
According to the Division’s press release announcing the change:
This change is being made in the public interest for increased transparency and good governance regarding settlements. Oftentimes, when a complainant retains private counsel and the matter settles, the parties enter into private settlements—meaning the terms of the settlement are not disclosed in a written agreement available to either the Division or the public. Nearly half of all post-probable cause settlements are private settlements without any public record of the terms of the settlement. The Division has a vested interest in the ultimate resolution of all cases—even cases with private counsel—to ensure that the terms of any settlement comply with our basic standards and do not violate public policy.
From now on, after a probable cause determination, a complainant’s attorney will be required to state in writing why they are seeking the discontinuance. If the reason is a private settlement, the Division will not grant the discontinuance.
Does this mean that employers will be forced to go through a public hearing? Not necessarily. This change only prohibits private settlements. From now on, parties wishing to settle must do so by entering into a publicly available stipulation that includes the terms of settlement. The stipulation is subject to the Division’s approval.
Most complainants are not represented by private counsel. Instead, complainants who receive a favorable probable cause determination end up having a Division attorney assigned to prosecute their case through the public hearing process. Division attorneys who negotiate settlements on behalf of claimants were already subject to the stipulation process. Thus, the new policy is not expected to have much of an impact on the type of claims we typically handle on behalf of our clients.
There have been numerous changes to New York Human Rights Law over the last several years. We invite you to read our posts about these changes (New York Expands Anti-Discrimination Protections for Employees, New York Releases Final Guidance on New Sexual Harassment Prevention Law, and New York Requires Policies and Training to Combat Sexual Harassment).
We have represented countless employers facing complaints of unlawful discrimination or retaliation before the Division. If your business is facing a complaint of discrimination in the Division or a charge of discrimination before the U.S. Equal Employment Opportunity Commission, please contact us to discuss how we may be able to assist you.
If you would like to schedule a consultation to talk about our firm’s employment litigation practice, please contact Peter Weishaar at email@example.com or 585.512.3542. Peter's employment practice includes the representation of businesses and individuals in matters involving restrictive covenants, non-compete agreements, discrimination, failure to pay wages in State and Federal Courts, and before administrative agencies, including the New York State Division of Human Rights and the United States Equal Employment Opportunity Commission.
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McConville Considine Cooman & Morin, P.C. is a full-service law firm based in Rochester, New York, providing high-quality legal services to businesses and individuals since 1979. With over a dozen attorneys and a full paralegal support staff, the firm is well-positioned to right-size services tailored to each client. We are large enough to provide expertise in a broad range of practice areas, yet small enough to devote prompt, personal attention to our clients.
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