Possible Bar on Non-Disclosure Provisions

You have been the victim of sexual harassment or discrimination in the workplace. You notify your employer’s human resource manager, who initiates an appropriate investigation into your claim.  Your employer eventually wants to reach an amicable settlement with you. In exchange for your agreement to settle your claim, your employer requires you to sign the settlement agreement containing, among other things, a provision whereby you agree not to disclose the details of your harassment or discrimination.

Employers in New Jersey that have been accused of unlawful sexual harassment or discrimination claims may be prohibited from including such a nondisclosure provision within a settlement agreement. Recently, the New Jersey State Senate approved a bill that would prohibit language in a settlement agreement or employment contract that would seek to conceal the details of sexual harassment, retaliation or discrimination claims.  The bill stems in part from the recent climate regarding sexual harassment and the desire to prevent victims from being further silenced or intimidated.  While employers and employees are still free to enter into settlement agreements or employment contracts containing nondisclosure provisions, such provisions can no longer be used to silence the victims of sexual harassment or discrimination.

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Some in the legal community, however, believe the proposed legislation may be counterproductive. For example, the thought is that defendants to a sexual harassment or discrimination claim would be less encouraged to settle if their underlying conduct was not kept confidential.  Without the impetus to settle, defendants may be apt to continue their inappropriate conduct.

To learn more about the pending legislation and how it may impact your business, feel free to contact me at cheyer@scura.com or call me at 973-786-1582.