If two bills recently introduced in the New York State Legislature become law, employers across the state could face new restrictions on including certain common provisions in their employment-related agreements.

Quick Hits

• S4424/A5411 would invalidate any contractual provision waiving or otherwise limiting any employee’s substantive or procedural rights, remedies, or claims.
• A636/S4996 would define certain terms in standard form contracts as unconscionable, effectively rendering them illegal and unenforceable.

Waiver of Employment Rights

Senate Bill No. 4424, introduced on February 4, 2025 (and the identical Assembly Bill No. 5411, introduced on February 13, 2025), would amend the New York Labor Law and the New York State Human Rights Law to add new Sections 219-e and 302, respectively. Under these sections, contractual provisions waiving or limiting “any employee’s substantive or procedural rights, remedies, or claim” would be invalid.

Significant exceptions to this general rule would exist for waivers mutually agreed to and included in “the settlement of any good faith bona fide dispute in which an employee raises a claim against their employer” or “an agreement entered upon or following the termination of an employee’s employment.”

The bill clarifies that the “provisions of this subdivision shall not apply where application of such provisions would be preempted by federal law.”

Unconscionable Contract Terms

Assembly Bill No. 636, introduced on January 8, 2025, would...

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