Workplace discrimination and harassment continue to plague workers in all sectors across the country. Heretofore, companies could employ nondisclosure agreements and other provisions to prevent discrimination and harassment victims from speaking publicly about the unlawful practices at their places of employment. Now, a new law in California that took effect on Jan. 1 of this year seeks to limit this practice of creating so-called secret settlements with victims.
The new law explained
Titled SB 331 CH 638, the new law applies to any agreement an employee makes with his or her employer before leaving the company. To curtail what amounts to gag orders, the law prohibits each of the following:
- Nondisclosure agreements-NDAs have long been used (and abused) to prevent former employees who left a company due to discrimination or harassment to speak publicly about what happened to them. In the past, those who failed to adhere to the terms could face substantial financial penalties and other consequences.
- Non-disparagement agreements – Similarly, a non-disparagement agreement prevents a former employee of speaking badly about the company publicly. The new law has added language that speaks directly to any form of discrimination or harassment that may be prevalent in the former employee’s workplace.
- Unlawful employment practices – Expanding upon the California Fair Employment and Housing Act, the new law makes it illegal for an employer to use raises, bonuses or other financial incentives to get an employee to sign an agreement that he or she will not publicly disclose any unlawful employment practices taking place inside the company.