DHR's Proposed Regulations Focus on Settlement, But the Real Story Is Due Process

Editor's Note: This analysis is based on the New York State Division of Human Rights' June 17, 2026 proposed amendments to 9 NYCRR Part 465. A copy of the proposed regulations is available at the end of this article.

On June 17, 2026, the New York State Division of Human Rights ("DHR") proposed amendments to its regulations at 9 NYCRR Part 465. Much of the proposal focuses on creating greater and sooner opportunities for settlement through both informal and formal conciliation. The proposed regulations also establish criteria for evaluating settlement offers, identify minimum standardized terms for settlement agreements, and clarify the process by which a complainant may object to a settlement proposal that DHR otherwise deems fair and in the public interest.

The full 19-page proposal is available for review at the end of this article.

While the proposal is largely framed as a settlement initiative, the most consequential change may have little to do with settlement at all. Instead, it may be DHR's recognition that respondents are entitled to a more definite statement of the allegations against them before being required to defend a discrimination claim.

The real story is due process.

Specifically, DHR proposes to add subdivision 465.11(f), entitled More Definite or Detailed Statement, which would allow a respondent to apply in writing to the Chief Administrative Law Judge for a more definite or detailed statement of the complaint. According to the proposal, this amendment is intended to ensure compliance with the State Administrative Procedure Act.

That is significant because, for years, discrimination respondents have often been required to defend claims based on vague allegations that do not clearly identify the specific conduct, dates, statements, decisionmakers, policies, comparators, or facts underlying the alleged discrimination. In practice, respondents have frequently been left guessing as to the actual allegations they must defend against.

If adopted, the proposed rule would provide respondents with a direct procedural mechanism to seek clarification before hearing, rather than waiting until after an adverse determination to argue that the proceeding failed to comply with the State Administrative Procedure Act. This is more than a technical amendment. It is a recognition that a respondent cannot meaningfully defend a discrimination claim without adequate notice of the allegations being asserted.

Settlement Reform Is Still Important

The proposed regulations also expand DHR's settlement framework. The amendments contemplate conciliation before a complaint is filed, conciliation after a complaint is filed but before a determination after investigation, pre-hearing settlement conferences, division-initiated settlements, and settlement review during the hearing process.

In evaluating whether a settlement offer is substantial enough to warrant termination of a proceeding in the public interest, DHR may consider factors including the probability of success, the reasonableness of the offer, the complainant's economic loss, evidence of mental pain and suffering, the egregiousness of the alleged discrimination, and whether the public interest is best served by continuing the proceeding.

That expanded settlement framework may create earlier opportunities for respondents to resolve cases, particularly where a complainant refuses a settlement that DHR deems reasonable. However, the value of that process will depend heavily on how DHR evaluates settlement value, damages, public interest, and the reasonableness of objections.

What the Proposal Still Does Not Fix

Although the proposed amendments move DHR toward greater procedural structure, they do not go far enough to solve two critical problems in DHR proceedings.

First, the proposed regulations do not create a meaningful discovery dispute resolution process. Litigants may still be required to commence a special proceeding in Supreme Court to enforce subpoenas or compel disclosure. In fact, the proposed amendments appear to move in the opposite direction by eliminating language that previously allowed an Administrative Law Judge to "agree to the issuance of subpoenas" during the preliminary conference process.

That omission matters. DHR proceedings can involve complex employment, housing, education, public accommodation, and business records. Without a clear administrative mechanism to resolve discovery disputes, parties may continue to face delay, inefficiency, and unnecessary court intervention when evidence is withheld.

Second, the proposed regulations do not expressly state that DHR settlements and awards must be evaluated under New York's Consistency-of-Remedies Principle, as established in Thoreson v. Penthouse International, Ltd., 80 N.Y.2d 490 (1992), and affirmed in Thoreson v. Penthouse International, Ltd., 179 A.D.2d 29 (1st Dep't 1992).

To be sure, the proposed regulations reference the "reasonableness of offer," but they do not go into evidence of emotional distress. Stated otherwise, they do not expressly state that damages should be assessed by reference to comparable state and federal case law. That omission is particularly important with respect to emotional distress damages, where DHR determinations are often challenged based on alleged departures from judicial precedent.

Why This Matters for Respondents

For employers, housing providers, real estate brokerages, educational institutions, municipalities, public accommodations, and businesses, the proposed due process amendment could become an important defense tool. If a complaint is vague, conclusory, or insufficiently detailed, respondents may soon have a formal mechanism to demand clarity before proceeding to hearing.

That can impact litigation strategy from the outset. A more definite statement can help respondents identify relevant witnesses, preserve documents, evaluate exposure, prepare defenses, and assess whether early settlement is appropriate.

Stated differently, the proposed regulations are not merely about settlement. They are about how discrimination cases are framed, defended, valued, and resolved before DHR.

What Happens Next

The public comment period is open for 60 days before adoption.

While DHR's proposed amendments are framed largely as a settlement initiative, the more consequential development may be the agency's recognition that respondents are entitled to sufficient notice of the allegations against them. If adopted, the new procedure for seeking a more definite or detailed statement could become a significant due process tool in defending discrimination claims before the Division.

However, the proposal leaves unresolved major issues involving discovery enforcement and consistent damages valuation. Stakeholders should review the proposed regulations carefully and consider whether comments should be submitted before the rule is finalized.

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Source Material

This article is based on the New York State Division of Human Rights' proposed amendments to 9 NYCRR Part 465, published in the June 17, 2026 edition of the New York State Register as I.D. No. HRT-24-26-00008-P.

View the Official New York State Register Publication

Download the Proposed Regulatory Text (PDF)

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Discrimination defense requires more than knowing the law. It requires knowing how administrative agencies apply it. Lieb at Law, P.C. represents employers, housing providers, real estate brokerages, educational institutions, municipalities, public accommodations, and businesses in discrimination litigation and administrative proceedings throughout New York. If your organization is facing a claim before the New York State Division of Human Rights, contact Lieb at Law, P.C. to develop a strategic defense from the outset.

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New Executive Order Ties DEI Compliance to False Claims Act Risk for Federal Contractors

New Executive Order Ties DEI Compliance to False Claims Act Risk for Federal Contractors

On March 26, 2026, the White House issued an executive order titled Addressing DEI Discrimination by Federal Contractors. The order states that its purpose is to “promote economy and efficiency in Federal contracting by preventing racial discrimination.” 

The order does not regulate DEI programs in the abstract. It directly connects certain practices to federal contracting eligibility, payment, and potential liability under the False Claims Act. Interestingly, the False Claims Act is now before the Supreme Court in Eli Lilly and Company v. United States, et al., ex rel. Ronald J. Streck, where it could undercut or strengthen this executive order by clarifying the rights of a private citizen to bring a claim in claiming an "injury" exists to the United States. 

What the Executive Order Requires

The order requires federal agencies to include a clause in contracts stating that:

“The contractor will not engage in any racially discriminatory DEI activities…”

It also defines those activities as “disparate treatment based on race or ethnicity in the recruitment, employment… contracting… program participation, or allocation or deployment of an entity's resources.”

Contractors must also:

• “furnish all information and reports, including providing access to books, records, and accounts”
• report subcontractor conduct that “may violate this clause”
• comply with agency-directed remedial actions

Payment and the False Claims Act

The order expressly links compliance to payment under federal contracts. The required clause states:

“The contractor recognizes that compliance with the requirements of this clause are material to the Government's payment decisions…”

The order further directs that the Attorney General shall:

“consider whether to bring actions under the False Claims Act against any contractors or subcontractors that violate the clause…”

It also requires prompt review of whistleblower actions brought under 31 U.S.C. § 3730, but again, see the case now before the Supreme Court. 

As a result, practices tied to hiring, promotion, training programs, or vendor selection may have implications beyond contract compliance where payment certifications are involved.

Subcontractor and Vendor Requirements

The order applies to subcontractors and lower-tier subcontractors. It requires that:

“The contractor will report any subcontractor's known or reasonably knowable conduct that may violate this clause…”

It also provides that contracts may be:

“canceled, terminated, or suspended… and the contractor or subcontractor may be declared ineligible for further Government contracts.”

Scope of Covered Programs

The order defines “program participation” broadly to include:

“training, mentoring, or leadership development programs; educational opportunities; clubs; associations; or similar opportunities…”

This definition extends beyond hiring and promotion and includes internal programs sponsored by the contractor.

Enforcement Framework

The order directs agencies to take action for noncompliance, including:

• contract cancellation, termination, or suspension
• suspension and debarment

It also directs federal agencies to identify “economic sectors that pose a particular risk” and issue further compliance guidance. 

Implementation Timeline

• Within 30 days: agencies must begin including the required clause in contracts
• Within 60 days: interim FAR guidance is expected
• Within 120 days: agencies must review and report on implementation

What General Counsel Should Review

• Hiring and promotion practices tied to federal contracts
• Eligibility criteria for training, mentorship, and leadership programs
• Vendor and subcontractor selection and oversight
• Contract terms addressing compliance and reporting obligations
• Internal records, communications, and documentation subject to agency review
• Statements or certifications tied to payment requests
• The case before the Supreme Court and the precedent it sets

Bottom Line

This executive order establishes that certain internal practices may affect federal contract eligibility, payment, subcontractor oversight, and potential False Claims Act exposure. It requires alignment between company practices, documentation, and contractual representations in connection with federal work.

Lieb at Law, P.C. represents companies in litigation arising from federal contract compliance, including False Claims Act claims, contract termination disputes, and enforcement actions. We focus on defending complex matters where regulatory risk becomes litigation.

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NYC Enacts Gender-Motivated Violence Protection Law

There is a new civil cause of action in NYC (Administrative Code of the City of New York section 10-1104) for crimes of violence motivated by gender that occurred prior to January 9, 2022. Now, any person claiming to be injured by a party who committed, directed, enabled, participated in, or conspired in the commission of a crime of violence motivated by gender may bring a civil claim against that party. This allows survivors to bring claims even if those claims would have otherwise been barred by the statute of limitations. However, the revitalization of claims is not permanent where claims brought under this law must now be commenced within 18 months of January 28, 2026. So, act immediately if this impacts you. Also, if you brought a claim between March 1, 2023 and March 1, 2025 that would satisfy the requirements of a cause of action under this section, you may now amend or refile (if dismissed) their claim to add a cause of action under this section. Finally, you can recover compensatory and punitive damages, injunctive and declaratory relief, attorney's fees and costs, and such other relief as a court may deem appropriate. 

DEI, the False Claims Act, and the New Enforcement Reality for Employers

National Law Review article published this week highlights a significant shift in federal enforcement strategy: the U.S. Department of Justice is now actively using the False Claims Act (FCA) to scrutinize workplace DEI initiatives at companies that receive federal funds or hold government contracts.

Read the article here:
https://lnkd.in/ee_mvzCg

According to the article, DOJ is issuing civil investigative demands to major employers and treating DEI-related inquiries as potential fraud investigations, not policy disagreements. The focus is no longer limited to what a DEI policy says on paper, but how it operates in practice.

For employers and the attorneys, this represents a material change in exposure.

The FCA has traditionally been used to police false billing and fraudulent payment claims. DOJ is now advancing a novel theory: that maintaining certain DEI practices while certifying compliance with federal anti-discrimination laws can constitute a false or misleading claim for payment. This approach has been reinforced by executive orders, DOJ guidance, and public statements from senior DOJ leadership.

Whether courts ultimately endorse this theory remains to be seen. In the meantime, investigations are underway, and the cost of responding to a CID alone can be significant. Documentation, internal decision-making, and how DEI concepts are operationalized are now front and center.

This is exactly why Attorney Andrew Lieb recently served as a featured instructor for a New York State Bar Association CLE titled Risk-Informed DEI: Balancing Legal Exposure and Organizational Culture. The program was designed to address the reality employers and counsel are facing now.

The CLE focuses on practical, defensible frameworks for advising employers in this environment. That includes identifying where FCA risk may arise, understanding how regulators evaluate DEI implementation rather than labels, and developing documentation and compliance strategies that align with both legal obligations and organizational goals.

For attorneys advising employers, and for organizations that contract with or receive funding from the federal government, DEI is no longer a purely cultural initiative. It is a legal risk management issue that requires careful, informed handling.

Details on the NYSBA CLE, including registration and CLE credit information, are available here:
https://lnkd.in/eHK9FHfk

As enforcement continues to evolve, employers should not assume that rebranding or surface-level changes are sufficient. The question regulators are asking is how programs actually function, how decisions are made, and what representations are being made to the government. Getting that analysis right now can make the difference later.

What Brokers Need to Know About NY’s New Restrictive Covenant Removal Law

Starting on June 3, 2026, NYS A1820A requires sellers of real estate to remove restrictive covenants that discriminate on the basis of race, color, religion, sex, sexual orientation, familial status, marital status, disability, national origin, source of income or ancestry. To do this, Real Property Law 327-a requires sellers of servient property (where the covenant has its effect) to submit "a restrictive covenant modification document" to the County Clerk and the purchaser at or prior to closing. A restrictive covenant is a private zoning agreement that (in this scenario) runs with the land. 

Additionally, by June 3, 2027, Condos, Co-ops, and HOAs must "delete or amend any covenants, conditions and restrictions that exist in a recorded document which discriminate on the basis of race, color, religion, sex, sexual orientation, familial status, martial status, disability, national origin, source of income, or ancestry." 

If discriminatory restrictions surface in a deal, our litigation team handles these cases. Contact Lieb at Law, P.C. for a case evaluation. 

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