NJ advances bill that would ban confidentiality provisions in any settled discrimination claim


Photo by Kristina Flour on Unsplash

Some states, like the Commonwealth of Pennsylvania for example, have responded to the #MeToo movement by drafting legislation that would ban confidentiality provisions in private sexual harassment settlements.

The State of New Jersey has taken it one step further.

Before I get to that, I want to thank the hundreds of HR professionals who packed the room for my “I’ll Help You Become an ADA Accommodation Expert” series at the sold-out 2018 SHRM Employment Law & Legislative Conference in Washington, DC. I had a great time presenting.

If you couldn’t attend in person and want to see what you missed, here is a copy of the slide deck.

Senate Bill 121 (here) would make it unlawful for an employer to enforce any employment contract or settlement agreement against an employee, where the agreement has the purpose or effect of concealing the details relating to any claim of discrimination, retaliation, or harassment.

So, why would an employer ever agree to settle a discrimination case on such one-sided terms? 🤔

Good question. Or not.

But, then it gets even more perplexing because the proposed bill also states that “[i]f the employee publicly reveals sufficient details of the claim so that the employer is reasonably identifiable, then the non-disclosure provision shall also be unenforceable against the employer.”

In other words, the two sides can reach an arms-length agreement — maybe one that counsel for both sides negotiates for their respective clients — only to give the employee the right to breach confidentiality at his or her option?!?

Plus, we’re not just talking sexual harassment here.

So, for example, let’s say that an individual alleges that his former employer failed to accommodate his disability. The company views the claim as marginal and would like to resolve it for “nuisance value.” For what it’s worth, the employee is not interested in protracted litigation and agrees to settle the case quickly to put a few bucks in his pocket and avoid the risk of getting nothing later on.

Senate Bill 121 completely chills that.

But wait, there’s more.

Even Senate Bill 121 also states that “a provision in any employment contract that waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment shall be deemed against public policy and unenforceable.”

I read that to include arbitration agreements and other agreements to shorten the statute of limitations on discrimination claims.

There’s not much to like about this current version of the bill. However, Senate Bill 121 has made it out of committee.

I’ll keep tabs on it and update you as/if it progresses.


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