On August 7, 2023, the "POWR" Act will go into effect. As discussed in a previous blog post, this new law will change the law of workplace discrimination and harassment in many ways. In some cases, the implications will not be clear until Colorado courts issue opinions construing POWR's provisions. However, it is clear that it will be very difficult to have a non-disparagement, non-disclosure, or confidentiality agreement in separation agreements and employment settlement agreements in Colorado.

The new law bans agreements which prohibit an employee or prospective employee from disclosing discriminatory or unfair employment practices, with some a very limited exception. A non-disclosure provision is not prohibited if:

• The provision applies equally to all parties to the agreement;
• The provision states that it does not prohibit disclosure of the underlying facts of any alleged discriminatory or unfair employment practice to immediate family members, government agencies, in response to subpoenas or other legal process, and for any other purpose required by law;
• The provision states that if the employer disparages the employee, the employer may not seek to enforce the provision against the employee (but all other terms of the agreement remain enforceable);
• Any liquidated damages provision must not be punitive, must be reasonable under the circumstances, and must be "varied based on the nature or severity of the breach";
• The agreement contains an addendum, signed by all the...

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