Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

New Jersey Bans Non-Disclosure Agreements in Discrimination and Harassment Settlements

Author: Robert E. Levy

Date: April 23, 2019

Key Contacts

Back

Gov. Phil Murphy Recently Signed into Law Legislation that Prohibits Mandatory Non-Disclosure Clauses in Settlement Agreements Involving Workplace Discrimination and Harassment

On 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 New NDA Ban

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:

  • Waivers: A provision in any employment contract that waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment is “deemed against public policy and unenforceable.” The law further provides that no right or remedy under the New Jersey Law Against Discrimination (NJLAD) or any other statute or case law can be prospectively waived.
  • Non-Disclosure: A provision in any employment contract or agreement which has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment, is deemed against public policy and unenforceable. Notably, the law makes the non-disclosure provisions unenforceable against the employer if the employee publicly reveals sufficient details of the claim so as to make the employer reasonably identifiable.
  • Notification Requirements: Every settlement agreement resolving a discrimination, retaliation, or harassment claim by an employee against an employer must include a “bold, prominently placed notice” stating that although the parties may have agreed to keep the settlement and underlying facts confidential, such a provision is unenforceable against the employer if the employee publicly reveals sufficient details so that the employer is reasonably identifiable.
  • Exceptions: The law does not apply to the terms of any collective bargaining agreement between an employer and the collective bargaining representative of the employees. It also does not prohibit an employer from requiring an employee to sign a contract in which: (1) the employee agrees not to enter into competition with the employer during or after employment; or (2) the employee agrees not to disclose proprietary information, which includes only non-public trade secrets, business plan and customer information.
  • Anti-retaliation: The law prohibits employers from taking any retaliatory action, including but not limited to failure to hire, discharge, suspension, demotion, discrimination in the terms, conditions, or privileges of employment, or other adverse action, against a person, on grounds that the person does not enter into an agreement or contract that contains a provision deemed against public policy and unenforceable pursuant to the bill.
  • Enforcement: Any person claiming to be aggrieved by a violation of the law can initiate suit in Superior Court. The statute of limitations is two years after the cause of action accrued. All remedies available in common law tort actions are available to prevailing plaintiffs. A prevailing plaintiff may also be awarded reasonable attorney fees and costs.

Similar Prohibitions Under NY Law

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.

Next Steps for New Jersey Employers

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 questions, please contact us

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.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Public Allegations, Unfinished Investigation: What New Jersey Businesses Should Do Next post image

Public Allegations, Unfinished Investigation: What New Jersey Businesses Should Do Next

When facing public allegations of wrongdoing, companies should not let the speed of the public conversation dictate the speed of an investigation. An investigation designed to confirm a preferred narrative rather than establish the facts can create serious problems later, particularly if litigation, regulatory scrutiny, or employment claims follow. Key Takeaways When public allegations surface […]

Author: Sean M. Pena

Link to post with title - "Public Allegations, Unfinished Investigation: What New Jersey Businesses Should Do Next"
BESS Interconnection: Managing Grid, Cost, and Schedule Risk post image

BESS Interconnection: Managing Grid, Cost, and Schedule Risk

For battery energy storage system (BESS) developers, securing equipment and site control is only part of the development equation. A project must also connect to the electric grid, and increasingly, BESS interconnection is one of the biggest sources of schedule, cost, and contractual risk. Key Takeaways This article is Part 3 of our Battery Storage […]

Author: Nicholas Wall

Link to post with title - "BESS Interconnection: Managing Grid, Cost, and Schedule Risk"
Navigating Director and Officer Liability in Times of Financial Distress post image

Navigating Director and Officer Liability in Times of Financial Distress

Director and officer liability increases sharply when a company is in financial distress. Decisions that would draw little attention in a healthy business can later be challenged by creditors, shareholders, bankruptcy trustees, and regulators as breaches of fiduciary duty, fraudulent transfers, or oversight failures. Understanding where that exposure comes from, and how to manage it, […]

Author: Michael Mietlicki

Link to post with title - "Navigating Director and Officer Liability in Times of Financial Distress"
Before You Buy: Managing Real Estate and Permitting Risk for BESS Projects in New York and New Jersey post image

Before You Buy: Managing Real Estate and Permitting Risk for BESS Projects in New York and New Jersey

For developers pursuing battery energy storage system (BESS) projects, finding the right property is only the beginning. BESS site selection is as much a legal and transactional exercise as a real estate decision, with risk analysis central to the project’s ultimate success. Key Takeaways The core questions for BESS site selection in New York and […]

Author: Nicholas Wall

Link to post with title - "Before You Buy: Managing Real Estate and Permitting Risk for BESS Projects in New York and New Jersey"
What Business Owners Get Wrong Before Meeting a Litigation Attorney post image

What Business Owners Get Wrong Before Meeting a Litigation Attorney

What should you expect when meeting a litigation attorney about a business dispute? You should expect to describe the dispute in your own words, hand over the most important documents, flag any deadlines or immediate threats, and leave with a clearer picture of the problem, what information is still needed, and the likely next steps. […]

Author: Michael Mietlicki

Link to post with title - "What Business Owners Get Wrong Before Meeting a Litigation Attorney"
Arbitration vs. Litigation vs. Mediation: What New Jersey Businesses Should Know Before Signing a Contract post image

Arbitration vs. Litigation vs. Mediation: What New Jersey Businesses Should Know Before Signing a Contract

Arbitration resolves disputes privately before an arbitrator whose decision is usually final, while litigation resolves them in court with full rights of appeal. Whether a business ends up in arbitration or litigation is often decided when it signs the contract, long before any dispute arises. Key Takeaways When facing a contract dispute, carefully consider your […]

Author: Graham Staton

Link to post with title - "Arbitration vs. Litigation vs. Mediation: What New Jersey Businesses Should Know Before Signing a Contract"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. Message frequency may vary. You can reply STOP to opt-out of further messaging.
“If you would like to submit a file, please email it directly to info@sh-law.com.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!