Labor & Employment Law Daily Wrap Up, CONTRACT CLAIMS—E.D.N.Y.: Settlement agreement was unenforceable without employee’s acceptance of confidentiality and nondisparagement clauses, (Jan 13, 2025)

By Ursula Furi-Perry, J.D.

The county argued that because the confidentiality and nondisparagement acknowledgment was separate and apart from the settlement agreement, failure to sign it had no bearing on whether the agreement itself was binding and enforceable on the parties.

Confidentiality and nondisparagement provisions were a material component of a settlement agreement between a social services employee and her county employer and the county could not enforce the agreement without the employee’s acknowledgment of those forms. New York state law requires nondisclosure language within the release unless the “condition of confidentiality is the [employee’s] preference,” and provides the employee with a 21-day period to consider the agreement and seven days to revoke. The provisions were a material component of the settlement agreement, and the execution of the acknowledgment forms acted as a condition precedent to effectuate the settlement (Separ v. County of Nassau, 2:21-CV-00010 (OEM) (JMW) (E.D.N.Y. Jan. 8, 2025)).

Agreement to settle. The employee sued the County of Nassau, New York, alleging that it and Nassau County Department of Social Services unlawfully discriminated and retaliated against her on the basis of her age and breast cancer diagnosis. After years of litigation, the parties agreed to a settlement, which included a nondisclosure provision in the context of the resolution of the employee’s discrimination claims.

The employee signed the settlement agreement but refused to sign the confidentiality and nondisparagement acknowledgment form, which the agreement mandated that she sign. The employer filed a motion to enforce the settlement agreement.

The court noted that once a settlement is reached on all material terms, it is considered an enforceable contract. Moreover, the court explained, because the settlement here resolved claims of discrimination and included a nondisclosure or confidentiality provision, New York law requires nondisclosure language within the release unless the “condition of confidentiality is the [employee’s] preference,” and provides the employee with a 21-day period to consider the agreement and seven days to revoke. “These provisions were enacted to afford greater protection for workers subjected to discrimination whose employers seek to conceal acts of work-place misconduct,” the court stated.

The court disagreed with the employer’s argument that the employee’s failure to sign the specific provisions had no bearing on whether the agreement itself was binding and enforceable on the parties. The provisions were a material component of the settlement agreement, the court said, and the execution of the acknowledgment forms acted as a condition precedent to effectuate the settlement. “Plaintiff here simply exercised her right within the 21-day period not to move forward with the settlement,” the court stated. “The Settlement Agreement never became “effective” under section 15, and therefore there was nothing to revoke under section 9.”

Conclusion. The federal district court denied the county’s motion to enforce the settlement agreement.

The case is No. 2:21-CV-00010 (OEM) (JMW).

Judge: Wicks, J.

Attorneys: Adam Grogan (Bell Law Group) for Anne Separ. Howard Marc Miller (Bond, Schoeneck & King) for County of Nassau.

Companies: County of Nassau, New York

Cases: ContractClaims RemediesDamages Discrimination NewYorkNews