The State of New Jersey has passed an amendment to its Law Against Discrimination that explicitly prohibits the use of non-disclosure clauses in cases of discrimination, retaliation, or harassment claims. With the explosion of the #MeToo movement, sexual harassment and discrimination claims are on the rise as women and men are feeling more support to come forward. While it is undoubtedly a good thing, the recent increase in transparency surrounding sexual harassment and discrimination has also shone the light on non-disclosure agreements and their effect on employees’ abilities to speak out against their employers.
What Are Non-Disclosure Clauses and Agreements, Exactly?
Non-disclosure agreements, or NDAs, are agreements between two parties to keep the details about what led to their settlement a secret. Non-disclosure clauses are the exact same thing, only they are found as just one section within larger employment agreements. Many employees, when they accept employment and sign their contracts, do not even realize they have signed non-disclosure clauses.
Clauses like these prevent victims of sexual harassment, discrimination, or retaliation from telling their stories after settling with their employers. These clauses are obviously beneficial to employers who do not want their dirty laundry aired for the public to see. Larry Nassar, Bill Cosby, Andy Rubin, and Harvey Weinstein were all found to have been protected for years by confidentiality clauses and non-disclosure agreements. Cases like these are what forced the State of New Jersey to amend its law in order to provide victims the opportunity to tell their stories publicly should they choose to.
Limitations
The limitation in New Jersey’s new law concerns the actual monetary amount. The exact monetary amount for which the suit or claim was settled remains confidential under New Jersey’s amendment to its LDA. However, there is a limitation to this as well. If the employee chooses to disclose her story to the public and provides enough detail that would allow the employer to be identified, then the employer can choose to release its own account of the incident and include the amount of the settlement. This provision essentially allows the employer to convey to the public that the case was settled for such a small amount, implying that the accusation lacks merit.
Backfire?
There is talk about whether or not the banning of non-disclosure agreements and confidentiality clauses could backfire altogether. After all, an employer’s main incentive to settle cases involving discrimination, harassment, or retaliation is to protect its public image. Taking away that incentive could make employers less likely to settle, which could make it more difficult for an employee to pursue his or her claim.
Forced Arbitration
New Jersey’s amendment also includes language that prohibits an employment contract from waiving any “procedural right,” which at first reading seems to suggest that forced arbitration clauses are also prohibited under this new law. However, that provision is open to interpretation and will become clearer as courts start to get involved.
