Happy New Year! In California, a new year often brings new laws protecting employees. Let’s dive into one that applies to our clients dealing with NDAs and employment contracts: The Silenced No More Act.

As of 2 years ago, California already broke new ground in protecting employees by outlawing confidentiality provisions in settlement agreements for civil actions and administrative complaints including allegations of sexual assault, sexual harassment, or workplace harassment or discrimination based on sex.

Now, effective January 1, 2022, the same protection will apply for agreements involving workplace harassment or discrimination on any protected basis, not just sexual harassment or sex.

California’s Senate Bill 331 (“Silenced No More Act”) also beefs up employee rights in nondisparagement agreements and separation agreements, which I will explain in a moment.

Employers frequently want to impose requirements that effectively silence their employees who wish to speak about illegality. SB 331 has an important impact on employers’ ability to achieve that through employment contracts.

The #MeToo movement created an opportunity to fight back against the legal tactics used to silence survivors, and now this fight has broadened to all kinds of unlawful workplace conduct.

Confidentiality in Settlement Agreements

With the enactment of SB 331, the prohibition on confidentiality in settlement agreements will apply to any type of workplace harassment or discrimination claims, not just those based on sex. This includes harassment or discrimination based on race, religion, color, national origin, ancestry, disability, medical condition, familial status, gender, age, and all other protected characteristics.

If the claimant requests a provision protecting the claimant’s identity and any facts that could reveal the claimant’s identity, a confidentiality provision is lawful so long as a government agency or a public official is not a party to the settlement agreement.

Non-Disparagement Agreements

SB 331 also expands the protections first enacted two years ago. Beginning on January 1, 2022, SB 331 makes it illegal to include any nondisparagement clause that prohibits an employee from disclosing information about illegal workplace conditions unless the agreement includes the following carve-out language in substantial form: “Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.”

The employee’s right to speak out on workplace violations includes:

• any type of harassment or discrimination
• any other conduct that an employee reasonably believes is unlawful
• These rules governing nondisparagement provisions apply to employment contracts, settlement agreements and separation agreements.

Going forward, this new law requires us to be extra wary of employer’s nondisparagement provisions that have the purpose or effect of denying the employee the right to disclose information about unlawful acts in the workplace.

 

Separation Agreements

SB 331 also applies its anti-gag-rule protections to any agreement related to a current or former employee’s separation from employment. Any such separation agreement must provide: (1) notice about an employee’s right to consult an attorney, and (2) reasonable time (at least 5 business days) for the consultation with an attorney. If an employee wishes to accept the agreement before the end of the 5-business-day period, it must be “knowing and voluntary” and not a result of improper inducement by the employer.

This requirement does not apply to a negotiated agreement to resolve an underlying claim filed by an employee in court, before an administrative agency, in arbitration, or through an employer’s internal complaint process.

Typically, our clients who have been given a separation agreement have not filed a claim yet. But they are struggling with the emotions of the separation, lots of fine print and time pressure to sign them quickly. These new protections are designed to give them a better chance to obtain prompt advice from a qualified attorney.

Have questions? Contact us today.