Disfavour toward employer/employee nondisclosure agreements (NDAs) has been an increasingly popular sentiment expressed by state legislatures over the last few years, and 2022 has seen the trend continue. Legislation in some states may void and make unenforceable certain employer/employee nondisclosure agreements; it may prohibit employers from requiring employees to enter into such agreements; or it may outright prohibit employers from executing the agreements, for example in employment contracts and separation agreements. Just over halfway through 2022, Hawaii, Maine, Oregon, and Washington have issued or amended state laws voiding, prohibiting, or restricting employer/employee nondisclosure agreements.
In late 2020, Hawaii passed a law prohibiting employers from requiring employees to execute nondisclosure agreements as a condition of employment, to the extent such agreement prevents the disclosure or discussion of sexual harassment or sexual assault that occurred in the workplace, at a work-related event, involved another employee, or involved the employer. On July 12, 2022, Hawaii amended the 2020 law by adding language that outright prohibits employers from entering into covered nondisclosure agreements. This amended law now not only prohibits covered nondisclosure agreements in employment contracts, but also in severance and settlement agreements. While the law was likely passed with good intentions, it will most certainly have an impact on the amount...
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