New Law Restricts Washington Employers From Using Nondisclosure And Nondisparagement Agreements — Battle At Hilltop Location & Field Maps

The act's effect on existing Washington law. Permits Employees to Disclose/Discuss Many Types of Workplace Conduct, Limiting Use of Nondisclosure/Nondisparagement Provisions. Second, employers can still protect trade secrets, IP, and confidential information that do not otherwise involve illegal conduct or prohibited conduct. These states include Arizona, California, Hawaii, Illinois, Louisiana, Maine, Maryland, Nevada, New Jersey, New Mexico, New York, Oregon, Tennessee, Vermont, Virginia, and Washington. Effective June 9, 2022, Washington State's Silenced No More Act (the "Act") will prohibit nondisclosure and nondisparagement provisions regarding illegal acts of discrimination, harassment, retaliation, wage and hour violations, and sexual assault in employment agreements. However, employers need not update existing employment agreements to strike offending provisions—employers will only be in non-compliance and liable for applicable penalties if they attempt to enforce any forbidden terms after the effective date. Related Practice: Employment. Be cautious when entering into new employment agreements. It does not apply to NDA provisions regarding trade secrets or business information, NDAs signed in connection with a settlement or as part of a severance agreement, or complaints other than sexual harassment and assault. Specifically, employers should note that the law: - Covers Most Employment-Related Agreements. The bill targets pre-dispute sexual harassment claims and would nullify any NDA that purports to cover them. Under the house bill, the legislature acknowledged there are existing provisions in non-disclosure and non-disparagement contracts between employers and employees that want to silence victims or those with knowledge of illegal discrimination, illegal harassment, illegal retaliation, wage and hour violations, or sexual assault in the workplace.

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Silenced No More Act Washington University

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The White House statement on the Speak Out Act concluded, "the Administration looks forward to continuing to work with the Congress to advance broader legislation that addresses the range of issues implicated in NDAs and nondisparagement clauses, including those related to discrimination on the basis of race, unfair labor practices, and other violations. On March 24, 2022, Washington state Governor Inslee signed into law Engrossed Substitute House Bill 1795 (The Silenced No More Act) ("ESHB 1795"). In addition to prohibiting employers and employees from contractually agreeing to secrecy, the Silenced No More Act Prohibits employers from discharging, discriminating, or otherwise retaliating against an employee for discussing allegations of unlawful conduct. However, because the law applies retroactively in certain circumstances, Washington employers should immediately review and update their employment agreements with confidentiality and/or nondisparagement provisions and ensure they comply. Practical guidance for employers. California passed its own version of the Silenced No More Act last year. This communication is not intended to create or constitute, nor does it create or constitute, an attorney-client or any other legal relationship. The law did not, however, prohibit settlement agreements from containing confidentiality provisions. Current employees who enter into new NDAs would be covered, however. The Act covers conduct occurring at the workplace, work-related events, and between and among employers and employees regardless of where the misconduct occurs.

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No Exceptions For Settlement Agreements. "It is the intent of the legislature to prohibit non-disclosure and non-disparagement provisions in agreements, which defeat the strong public policy in favour of disclosure, " read the bill. The law also leaves alone confidentiality provisions limited to disclosure of the amount of any settlement. However, these provisions became particularly controversial in the wake of the #metoo era, when employees alleged these agreements acted as a manner of silencing employees from disclosing gender discrimination and harassment. Keep in mind, that employers may still prevent the "disclosure of the amount paid in settlement of a claim. " The trend that began with Washington state's Silenced No More law has now spread to 14 states, with two more states considering bills. The prohibition includes, but is not limited to, all settlement agreements, non-disclosure agreements, and non-disparagement agreements between an employer and an employee or independent contractor. Most employees sign employment agreements at the start of their employment, and employees use this opportunity to limit actions employees can take. Effective June 9, Washington employers will be subject to a sweeping new law more closely following California's similar law, causing most businesses to take immediate action to come into compliance. New York extended protections against harassment to employees previously uncovered by the state's human rights law, enlarged the statute of limitations for harassment claims from three to six years, created protections from retaliation for anyone helping a victim of harassment, and banned "no rehire" provisions against contractors or employees who claim harassment under New York law.

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The recent legislative attention to NDAs is a response to the #MeToo movement, which highlighted the use of NDAs by "bad actors" to silence victims of sexual harassment. Washington employers are already prohibited from using employment agreements that restrict workers from disclosing claims of workplace sexual assault and sexual harassment – but will soon be unable to use nondisclosure agreements encompassing nearly all common employment claims and all employment agreements, including settlements. Over the past few years, an increasing number of states have passed legislation restricting the permissible scope of non-disclosure agreements ("NDAs") for employees. The act will implicate nondisclosure and nondisparagement provisions in many existing standard offer letters, confidential information and invention assignment agreements, separation or settlement agreements, and consulting/independent contractor agreements. Because of the broad scope of the act, the severe penalties, the requirement not to enforce prior agreements, and the mandate of compliance moving forward, it is imperative that Washington employers consult with their legal advisors to ensure compliance with the new law. Whether the Act's broadly-written requirement of Washington law for Washington employees will extend to agreements protecting trade secrets or proprietary information that are unrelated to claims of discrimination or harassment. Some of these laws (e. g., New Jersey) prevent employers from enforcing an NDA against an employee only prospectively, while other state laws (such as Maine's) make most existing NDAs unenforceable as well (unless entered into as the result of a compensated settlement). On top of that, the legislation said it is also a violation for an employer discharge, discriminate, or retaliate against an employee for discussing or disclosing illegal harassment, illegal discrimination, illegal retaliation, wage and hour violations, or sexual assault that took happened in the workplace or work-related events. Jay Inslee signed into law the Silenced No M o re Act, greatly restricting the scope of nondisclosure and nondisparagement provisions that employers may enter into with employees who either work or reside in Washington state. Later that year, Oregon passed its Workplace Fairness law. A similar bill signed by President Biden on March 3, 2022 – the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 – invalidated mandatory arbitration agreements signed before a dispute that preclude a party from filing a lawsuit in court involving sexual assault or sexual harassment. While the Act only applies to applicants and workers in Washington State, employers should be aware of the limits of the new law and rethink their existing employment agreements. You are entitled to your full pay for your labor, in a workplace free from harassment and discrimination.

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For more information, contact Shirley Lou-Magnuson, Heather, or Katheryn Bradley. It is based on Washington law and is intended for use with employees or businesses located in Washington. Special thanks to Lane Powell's 2021/2022 Summer Associate Antonia Gales and 2022 Summer Associate Justine Kim for their assistance in authoring this Legal Update. The Speak Out Act is limited in scope, in that it only applies to sexual assault and sexual harassment disputes. An employer who violates the law after it goes into effect is responsible for damages up to $10, 000, as well as attorneys' fees and costs. The broad sweep of these laws will no doubt create compliance challenges, especially for multi-state employers. It is a violation for an employer to: - discharge, discriminate, or retaliate against an employee for discussing conduct that the employee reasonably believed to be illegal; - request or require that an employee agree to abide by a prohibited clause; or. Or in the case of a lawsuit, include one in settlement agreements. "Another game changer! " This bill will allow all survivors of inappropriate or illegal workplace misconduct to share their experiences if they choose to do so. The new law prohibits any agreement, including any settlement agreement, that bars employees from discussing almost any unlawful employment activity, not just sexual harassment or sexual assault. If they include language that could reasonably be interpreted to prohibit discussion of discrimination, harassment, retaliation, wage and hour violation, and/or sexual assault, the agreement needs to be revised. Which NDAs are retroactive under the new law?

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Employers must also provide employees a copy of the employer's anti-discrimination policy, the requirements of which are described in ORS 659A. The 2018 law excepted human resources staff, supervisors, or managers when they are expected to maintain confidentiality as part of their assigned job duties. 210 had a carve-out specifically addressing and permitting confidentiality during ongoing workplace investigations. Washington State, however, takes it a step further by barring confidentiality clauses even if requested by the employee (as defined by the Act). In 2018, Washington implemented legislation in response to the #Metoo movement. In New Jersey, the state recently passed legislation that bans any provision in any "employment contract or settlement agreement which has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation or harassment" – in other words, an NDA. The act retroactively voids any such agreements entered into and makes it a violation for an employer to attempt to enforce any non-disparagement or non-disclosure agreement related to the illegal acts. Entering into a new agreement that contains noncompliant provisions or attempting to enforce an existing agreement that contains noncompliant provisions may result in penalties.

Silenced No More Act

SB 331 contains some additional parameters that do not apply to negotiated settlements of claims filed in court or with an administrative agency or submitted through an internal workplace complaint procedure, but that are important for employers in the normal course of business. Or should they be eliminated? Under Oregon law, an employee may request that a non-disclosure or non-disparagement clause be included in an employment contract or settlement agreement so long as an attorney represents the employee. After an instance of workplace discrimination or harassment, employers could also negotiate nondisclosure in exchange for payment to settle the claim. Some state laws–including New Jersey, Illinois, Maine, New York, and Oregon–go beyond sex-based harassment to cover a broader array of issues. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties. The New Jersey law allows the parties to agree to a confidentiality provision, but it does not prevent employees from breaking confidentiality. Workplace whistleblowers also receive additional protection. Beginning January 1, 2023, all employers with 15 or more employees must disclose the following salary and benefits information in job postings: - The salary or pay range for the position; and. Assess employee severance agreements to avoid nondisclosure or nondisparagement provisions that are not compliant with the new law. E. 1795 covers both independent contractors and employees and voids any employment-related agreements that contain provisions that prohibit workers from discussing allegations of: - Illegal discrimination, harassment, or retaliation; - Wage and hour violations; - Sexual assault; or. Specifically, don't tell your new employees that as a condition of their employment they cannot discuss the topics above.

California permits an aggrieved party to make a motion for fees, including under any contractual fee provision contained in the challenged agreement. "This is a simple bill that can go a long way toward eradicating misconduct in the workplace that is too often swept under the rug, " Keiser said in a statement. In addition to the recent state laws, legislation limiting the use of NDAs in cases of sexual harassment has recently been advanced by both houses of Congress. But Oregon's law only permits such a prohibition when requested by the aggrieved employee and only if the agreement contains a seven day revocation period and does not involve a public employee that has engaged in the discriminatory, harassing, or retaliatory conduct.

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