The legislation seeks to prevent an employer’s abuse of ‘secret settlements’ to shield offenders from claims or prosecution
As of Jan. 1, a new Californian law has taken effect, which prohibits an employer from adding a provision in certain agreements that denies disclosing information about harassment, discrimination or other unlawful conduct in the workplace.
SB 331 CH 638 applies to settlement, non-disparagement and “separation from employment” agreements. The legislation seeks to prevent an employer’s abuse of “secret settlements” to shield offenders from claims or prosecution.
On Non-Disclosure Agreements
The new law prohibits the use of non-disclosure agreements (NDAs) to settle employment and housing-related legal claims involving unlawful harassment, discrimination or retaliation of any kind, with exceptions when requested by the complainant.
As discussed in the Senate, the new law seeks to prevent the abuse of NDAs. The Senate commented that the case of US Olympic gold medalist McKayla Maroney is “illustrative,” saying that Maroney was among the more than 200 victims sexually abused by former USA Gymnastics team doctor Larry Nasser. The Senate pointed out that the agreement she reached to settle her claims against Nasser contained a non-disclosure provision. “According to the terms, if Maroney spoke publicly about what happened to her, she faced a $100,000 penalty. Similar NDAs reportedly bound many of Harvey Weinstein’s victims to silence,” the Senate said.
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