Maine recently joined the list of states—including California, Illinois, New Jersey, New Mexico, New York, Oregon, Washington, and others—with laws restricting employers’ use of nondisclosure agreements (NDAs) and confidentiality terms in settlement, separation, and severance agreements. Governor Janet Mills signed H.P. 711—Legislative Document (L.D.) 965, “An Act Concerning Nondisclosure Agreements in Employment” into law on May 12, 2022, with the new measure set to take effect August 8, 2022. Not surprisingly, the recently enacted NDA law is somewhat vague and subject to interpretation.
Maine’s new NDA law prohibits employers from requiring applicants, interns, or employees to enter into settlement, separation, or severance agreements that:
limit their rights to report, testify, or provide evidence to a federal or state agency that enforces employment or discrimination laws;
prevent them from testifying or providing evidence in federal of state court proceedings in response to a legal process; or,
prohibit them from reporting conduct to a law enforcement agency.
The new law further provides that settlement, separation or severance agreements may include provisions preventing the subsequent disclosure of factual information relating to a claim of unlawful employment discrimination only if:
the agreement expressly provides for separate monetary consideration for the employee’s guarantee of nondisclosure that is in addition to any other compensation;
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