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In a sweeping expansion of existing law, Fisher Phillips reports that Governor Gavin Newsom signed legislation that broadly prohibits non-disclosure clauses in settlement agreements involving workplace harassment or discrimination on any protected bases, not just sex.

SB 331 – known as the “Silenced No More Act” – takes what state lawmakers believe will be a final stand against employers preventing employees from discussing unlawful acts in the workplace. The new law, which takes effect on January 1, 2022, will nullify and make void provisions within any agreement entered on or after that date that prevent or restrict an employee from disclosing factual information on any type of harassment, discrimination, or retaliation.

SB 331 builds on SB 820, also known as the STAND (Stand Together Against Non-Disclosure) Act, which California passed in 2018 in response to the #MeToo movement. To address what advocates of the movement coined as “secret settlements” used to cover up cases of sexual harassment involving high-profile executives, the STAND Act prohibited the use of confidentiality provisions in settlement agreements for actions including claims based on sex. As such, for several years, the STAND Act has allowed employees to discuss factual information relating to sexual harassment in the workplace.

Primarily, SB 331 amends Code of Civil Procedure Section 1001 (previously enacted by SB 820 in 2018) to expand the prohibition of confidentiality provisions in agreements entered into on or after the effective date for all acts of workplace discrimination or harassment, not only based on sex. For example, this includes acts based on race, religion, color, national origin, ancestry, disability, medical condition, familial status, sex, gender, age and other protected characteristics as described in various subdivisions of Sections 12940 and 12955 of the Government Code.

With its substantial changes, the new law importantly preserves the existing protection against disclosure of the settlement amount. While employees may discuss the underlying facts of the case, employers can still insist on clauses that prevent disclosure of the amount of money paid to settle the claim. Therefore, employers remain somewhat shielded against current and former employees “piggybacking” off a settlement with the aim of seeking a similar payout.

As another slight reprieve, employers may still include non-disparagement clauses or similar provisions in agreements provided there is specific language stating the employee’s right to disclose information about unlawful acts in the workplace. Absent that language, the provision would be against public policy and unenforceable. Certainly, crafting such language to ensure enforceability is best handled by consulting with legal counsel.

For those employees with privacy concerns who wish to protect themselves against public attention, the Silenced No More Act leaves untouched the exception allowing claimants to maintain privacy. Therefore, at the request of the claimant, a settlement agreement may still include a provision that shields the claimant’s identity and all facts that could lead to the discovery of their identity. Consistent with prior law, this exception does not apply if a government agency or public official is a party to the settlement agreement.