New Jersey just banned NDAs in discrimination, retaliation, and hostile work environment settlements


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Well, it appears as though I may need to update my PowerPoint for a local New Jersey SHRM conference at which I am presenting tomorrow.

Yesterday, New Jersey Governor Phil Murphy signed into law this bill, which makes any non-disclosure provisions in an employment contract or settlement agreement which have the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment unenforceable against a current or former employee who is a party to the contract or settlement.

Put simply, employees will always be able to discuss claims arising under New Jersey’s Law Against Discrimination, including how much your business paid them to settle those claims.

If the employee publicly reveals sufficient details of the claim so that the employer is reasonably identifiable, then the non-disclosure provision is unenforceable against the employer.

So, if both sides want to remain tight-lipped about a settlement, they can.

(The new law does not apply either to non-competition agreements or agreements concerning non-disclosure of proprietary information or trade secrets. It also exempts collective bargaining agreements.)

How about a nice, slow clap?

Additionally, every settlement agreement resolving a discrimination, retaliation, or harassment claim by an employee against an employer must include a bold, prominently placed notice that although the parties may have agreed to keep the settlement and underlying facts confidential, such a provision in an agreement is unenforceable against the employer if the employee publicly reveals sufficient details of the claim so that the employer is reasonably identifiable.

How about another slow clap?

What happens if you try to enforce one of these NDAs? You’ll be on the hook for the employee’s reasonable attorney fees and costs.

The law takes effect immediately.

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