Employers may include provisions in employment contracts or settlement agreements that limit employees’ ability to discuss issues like sexual harassment with others. When a settlement agreement contains this kind of provision, it may mean that the public cannot learn about the employee’s experience in the workplace. Other employees could be at risk of the same kind of experience if the employer took no action against the individual — or individuals — whose conduct led to the complaint and settlement. The New Jersey Legislature passed a law in 2019 that prohibits the use of non-disclosure agreements (NDAs) in connection with claims involving employment discrimination, harassment, or retaliation. A bill now pending in the New Jersey Senate would also prohibit non-disparagement clauses or agreements in those situations. If you have concerns about non-disclosure agreements involving a workplace matter, reach out to a New Jersey employment lawyer to get legal advice.
Businesses often use NDAs as a way to protect trade secrets and other proprietary information. An employment contract might include an NDA that protects information that could be of great interest or value to the employer’s competitors. Employers have also used NDAs to protect other kinds of information besides trade secrets, such as information that could be embarrassing.
News reports have identified numerous cases in which sexual harassment settlements included NDAs. Under this kind of NDA, one of the conditions for receiving a settlement payment is a promise by the complainant never to disclose the circumstances of the sexual harassment claims. The effect of this kind of NDA has been to keep important safety information away from the public. New Jersey passed a law in 2019 barring NDAs in employment contracts and settlement agreements as they might pertain to any “claim of discrimination, retaliation, or harassment.”
A bill currently pending in the New Jersey Senate, S2930, would amend the provisions of the 2019 bill to include non-disparagement agreements along with NDAs. In this context, non-disparagement agreements essentially bar a person from making negative comments about a business. Whether a statement is “disparaging” or not is often the subject of disagreement, but this kind of clause tends to prevent people from saying anything about their experiences with sexual harassment and other unlawful workplace acts.
A decision issued by the New Jersey Appellate Division in May 2022 found that the 2019 law did not bar the enforcement of a non-disparagement agreement. The plaintiff settled a lawsuit alleging sexual harassment, sex discrimination, and retaliation. The settlement agreement included a non-disparagement clause. The defendant, a police department, sought to enforce this clause after the plaintiff gave a televised interview in which she stated that the department “had not changed, and…was still a ‘good old boys club.’” The court’s decision prompted the introduction of S2930 the following month.
In the U.S. Senate, a pending bill known as the Speak Out Act would prohibit “predispute” NDAs and non-disparagement clauses in cases alleging sexual harassment or sexual assault. It defines a “predispute clause” as one that the parties sign before anyone files a lawsuit. The federal bill, if passed, presumably would not apply to NDAs or non-disparagement clauses in settlement agreements signed after litigation has begun. The New Jersey law, in contrast, specifically mentions both employment contracts and settlement agreements.
If you are involved in a dispute with your employer in New Jersey or New York, you need a knowledgeable and experienced advocate who can help you fight for your rights. The employment lawyers at the Resnick Law Group are here to help you understand your options and answer your questions. Please contact us online, at 973-781-1204, or at 646-867-7997 today to schedule a confidential consultation.