
Robert E. Levy
Partner
201-896-7163 rlevy@sh-law.comFirm Insights
Author: Robert E. Levy
Date: April 23, 2019
Partner
201-896-7163 rlevy@sh-law.comOn March 18, 2019, New Jersey Gov. Phil Murphy signed legislation into law that prohibits mandatory non-disclosure clauses in settlement agreements involving workplace discrimination, harassment, and retaliation claims. The new law became effective upon signing and applies to all contracts and agreements entered into, renewed, modified, or amended on or after March 19, 2019.
New Jersey’s latest employment law, Senate Bill 121, prohibits any provision in any “employment contract or settlement agreement which has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation or harassment.” It also bars provisions in employment contracts that waive rights or remedies.
Below are several of the law’s key provisions:
New Jersey is the third state in the country to ban the use of NDAs in sexual harassment settlements. In the wake of the #MeToo movement, several other states have taken steps to both enhance transparency and restrict mandatory arbitration with respect to sexual harassment, retaliation, and other employment claims.
New York has similar restrictions in place. The state’s 2018-2019 budget, signed into law by New York Gov. Andrew Cuomo on April 12, 2018, contained a ban on mandatory arbitration clauses for claims of workplace sexual harassment. It specifically prohibits “any clause or provision in any contract which requires as a condition of the enforcement of the contract or obtaining remedies under the contract that the parties submit to mandatory arbitration to resolve any allegation or claim of an unlawful discriminatory practice of sexual harassment.” The provision states that such prohibited clauses will be considered null and void, except where inconsistent with federal law or in conflict with a collective bargaining agreement.
Because the law took effect immediately, New Jersey employers should act quickly to review all employment and settlement agreements to determine if their nondisclosure and arbitration provisions must be revised. To ensure compliance, we advise consulting with an .
If you have any questions or if you would like to discuss the matter further, please contact me, Robert E. Levy, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.
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