It's common for employers to require employees to sign nondisclosure and nondisparagement clauses during hiring, in severance agreements and in legal settlements. But employers and HR professionals need to be careful that these clauses don't violate new state laws.
Maine, Oregon and Washington are the latest states to restrict how employers can use those types of contracts. Other states such as California, Illinois, New Jersey and New York also have similar laws. Many of these state laws were passed in the wake of the #MeToo movement in order to prevent companies from covering up sexual harassment and sex discrimination by executives and supervisors.
"Since the #MeToo movement started in 2017, there have been several states that have passed laws restricting the use of confidentiality and nondisparagement agreements in employment, and I expect this trend will continue," said Jim Morrison, an attorney with BakerHostetler in Seattle.
"Before these types of laws came into effect, the worst-case scenario of a poorly constructed nondisclosure or nondisparagement provision was that it would not be enforceable," he added. "Now, requesting that an employee sign such an agreement can expose the company to liability."
A nondisclosure agreement, also called a workplace confidentiality agreement, is a legally binding contract in which one party agrees to give a second party confidential information about its business or products, and the second party agrees not to share this...
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