NDAs Stifled by Cal. ‘Silenced No More’ Law in 2022

No More Non Disclosures

California Governor Gavin Newsom on Thursday signed into law the Silenced No More Act, which starting next year will broaden restrictions on the use of nondisclosure agreements when settling employees’ bias and harassment lawsuits.

California has been taking steps in recent years to drastically reduce the use of nondisclosure and nondisparagement agreements that shield claims of sexual harassment from public light, S.B. 331 aims to broaden restrictions to cover a wider range of discriminatory acts.

California State Legislature and Governor Newsom have now spoken: “California workers should absolutely be able to speak out – if they so wish – when they’re victim to any type of harassment or discrimination in the workplace.”

“It is unconscionable that an employer would ever want to seek to silence the voices of survivors that have been subjected to racist, sexist, homophobic or other attacks at work. To that end, I greatly appreciate the Governor’s signature of S.B. as it will empower survivors to demand accountability and prevent future abuses by perpetrators.”

The bill is set to take effect on Jan. 1, 2022, and it will extend the state’s existing restrictions on the use of NDAs in sexual harassment settlements to cover a wider range of employment and housing-related settlements under California’s Fair Employment and Housing Act. It prohibits NDAs in settlements resolving legal actions that assert workplace discrimination, harassment and retaliation claims not based on sex, as well as claims that bias and harassment were committed by the “owner of a housing accommodation.”

Current laws provide that settlement agreements resolve claims of workplace sexual harassment, sexual assault, or sex-based bias and retaliation in employment or housing are generally limited in their ability include an NDA. Employers in California are also unable to tie a job or things like raises and bonuses to a worker signing an NDA that prevents them from speaking out about unlawful conduct or waiving their right to pursue workplace bias claims.

S.B 331 will also prevent employers from inserting confidentiality clauses into certain severance agreements that limit a worker’s right to disclose actions at their former workplace that they believed to be unlawful, unless the worker wants such a provision included.

Law 360’s Jessica Stender stated that “NDAs and nondisparagement agreements have become corporate gag orders.”

“It never should have been legal for employers to hide behind these agreements by silencing those who experienced racism and other forms of discrimination while working for them,” Stender said.

Stender also noted that S.B. is the first bill of its kind in the U.S. because it addresses both NDAs and nondisparagement agreements. Equal Rights Advocates hopes it becomes a blueprint for other states.

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