Many Californians are asked to sign nondisclosure agreements when they enter new jobs – before they have any idea what is to come. NDAs are designed to protect proprietary information, such as trade secrets, but these employment agreements have also been used to shield suspect actions and overt wrongdoing on the part of employers.
NDAs can even silence employees in relation to sexual assault or harassment due to fear of being sued. In the past, speaking out was seen as a fast track to, at best, losing one’s job or, at worst, never working again.
The Speak Out Act that recently became law upholds the right to speak out against harassment and assault – for those who signed NDAs prior to a dispute arising – but critics point out that it does nothing to address other avenues of disenfranchisement, including:
- Age discrimination
- Race discrimination
- Gender discrimination
- Discrimination based on disability
- LGBTQ+ discrimination
In early 2022, the Biden administration signed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act into law. The #MeToo movement and the many high-profile cases in which the voices of employees who’d been subjected to sexual abuse or harassment were silenced inspired this act. This law banned the pre-dispute arbitration clauses that many employees fell victim to in cases alleging sexual harassment or assault on the job.
Later in 2022, the administration signed The Speak Out Act into existence. This act takes the matter a step further by prohibiting the enforcement of those pre-dispute NDAs and non-disparagement clauses in cases involving sexual harassment or assault. These laws are intended to help pave the way for employees harmed by sexual harassment to seek justice – rather than allowing employers contractual means of silencing them.
California’s Silenced No More Act
California signed its own law, called the Silenced No More Act, into effect on January 1, 2022. The law places important restrictions on confidentiality provisions in a range of work-related settlement agreements that are based on harassment and retaliation under the Fair Employment and Housing Act (FEHA).
The Silenced No More Act affords employees protections that exceed those addressed by the federal Speak Out Act. Employees cannot be barred from disclosing underlying information related to any of the following forms of harassment, discrimination, or retaliation:
- Based on the employee’s sex
- Based on the employee’s age
- Based on the employee’s ethnicity
- Based on the employee’s disability
- Based on the employee’s sexual orientation
- Based on the employee’s religion
- Based on the employee’s national origin
- Based on the employee’s sexual orientation
In other words, California’s law takes a far more expansive approach.
The Name of the Bill Says It All
California Senator Connie M. Leyva, who wrote the Silenced No More bill, puts it this way:
“The name of the bill says it all, as no worker should ever be silenced from speaking out about their own experience of harassment or discrimination in the workplace. For far too long, these secret settlements and agreements have reinforced a culture of secrecy that prevents accountability, respect and justice. Workers in California deserve better than being forced into agreements that protect perpetrators and continue to harm survivors and others around them in the workplace.”
Prior to Silenced No More, employees in California were protected from signing requirements related to non-disparagement clauses that denied them the right to disclose unlawful acts in the workplace as a condition of employment or in exchange for raises or bonuses. The new act, however, broadens the meaning of unlawful acts in the workplace to include harassment, discrimination, or retaliation of any kind. The act also includes prohibitions against non-disparagement clauses in other forms of employment contracts, including separation agreements.
The Silenced No More law is not without limitations. The protections do not extend to non-disparagement clauses that relate to negotiated settlement agreements that resolve litigation pending in any of the following forums:
- In court
- Before an administrative agency
- In the form of alternate dispute resolution (ADR)
- Through an employer’s internal complaint process
Employers are not barred from using non-disparagement provisions in separation agreements and other tools that are intended to restrict employee disclosures regarding lawful workplace conditions. To ensure this distinction, however, the following disclaimer must be used – Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination, or any other conduct that you have reason to believe is unlawful.
Further, the act does not bar employers from protecting their proprietary and confidential business information, including trade secrets – all of which can be well protected by the law. Finally, the Silenced No More Act can’t stop an employer from including a general release or waiver of all the claims in a separation agreement that includes an employee consideration of some kind, such as a monetary consideration.
Time and Notice Requirements
California’s Silenced No More Act includes requirements that employers fulfill both the following requirements:
- Informing both current and former employees of their right to consult with professional legal counsel of their own choosing regarding any separation agreements
- Allowing employees at least five business days to obtain the legal guidance for which they are looking
Employees have the right to sign separation agreements prior to the passage of five days, but doing so must be voluntary and cannot be induced by fraud, threats to withdraw or alter the offer, misrepresentation, or incentives for not signing on the part of the employer.
How Employees Are Affected
The Silenced No More Act implements clear restrictions on employers and bars companies from turning to NDAs to protect themselves from their own wrongdoing in relation to workplace discrimination or harassment. The act does not extend, however, to employees who receive severance packages.
Employees are often required to sign NDAs that limit their legal rights when they are hired, during their tenure, and when they leave the company. The Silenced No More law limits the limitations these agreements can impose on employees. Additionally, the act helps to level the playing field when it comes to the rights of employees vs. the rights of their employers, who tend to have far greater resources and, as a result, tend to have far more legal sway.
A Hard-Fought Victory
The Guardian reports that workers in Silicon Valley have been very outspoken about the tech industry’s highly restrictive confidentiality requirements as posed by their NDAs – helping to create a culture of secrecy and silence in the face of corporate wrongdoing. The cascading problems came to light in the wake of the #MeToo movement when it became known that Harvey Weinstein leaned heavily on NDAs to silence his victims.
Ifeoma Ozoma is a former policy manager at Pinterest who co-authored the Silenced No More bill after having the courage to break her own NDA to denounce the company’s alleged discriminatory policies publicly. Both she and a colleague maintain that Pinterest failed to protect them from the harassment they experienced both on the job and outside the company. Although the bill sprang from the experience of tech workers, it applies to employees in all industries.
Ms. Ozoma’s Op-Ed
Losing the High-Profile Job She Loved
Ozoma worried about how she will share the news that she’d lost the high-profile job she loved with her colleagues, loved ones, community, and prospective employers. To make the matter more challenging, she had to navigate doing so without violating the terms of her exceptionally restrictive NDA that was crafted by Pinterest’s team of lawyers. It was a tall order.
Hesitant Movement Forward
The law in question, however, only afforded protections for NDAs that were broken in relation to sexual harassment, sexual assault, and gender discrimination. As a Black woman, Ozoma had also experienced race discrimination – leaving her only partially protected. It was at this point that Ozoma came together with Senator Leyva and joined in her effort to draft the Silenced No More Act.
Key Provisions of the Silenced No More Act
The California Silenced No More Act ensures additional provisions for employees that include:
- Upon request, the victim can keep their name confidential – as long as a government agency or public official is not a party to the settlement agreement.
- The act applies to employment agreements that guide the hiring and retention of employees, to separation agreements that guide the discharge or resignation of employees, and to other employment-related agreements.
- The act bars employers from silencing employees and former employers in relation to information about unlawful workplace acts, activities, or policies.
One matter that hasn’t changed, however, is that – If it’s included in the employment agreement – any settlement amount can be kept private. Keeping these often-immense sums away from public scrutiny can help companies maintain their veneer of innocence.