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California law prohibits employers from requiring NDAs with sexual harassment settlements

| May 25, 2021 | Employment Law

California enacted new workplace sexual harassment laws in the wake of the #MeToo movement that brought to light multiple stories of harassment and assault by some of the entertainment industry’s biggest names. The biggest of those names, Harvey Weinstein, who’s already serving time, is currently facing 11 additional charges in Los Angeles over crimes including forcible rape and sexual battery involving five women. 

One law can be linked to Weinstein’s requirement that employees who made sexual harassment and assault complaints sign nondisclosure agreements (NDAs) preventing them from ever discussing the harassment or abuse they’d suffered or witnessed.

What does California law say?

This and other laws may have gotten their impetus in the entertainment industry, but they apply to all industries. In California, it’s illegal for any private or public employer to require someone to sign an NDA when they settle an administrative claim or lawsuit involving sexual harassment, assault, discrimination, failure to prevent those things or retaliation against employees who report them.

Any settlement agreement that involves an NDA or any other type of confidentiality requirement regarding those activities is considered invalid. By being allowed to speak out, proponents of the law argued, predators and predatory workplaces won’t be able to continue to foster a toxic work environment for as long as Weinstein and his company did.

What can still be kept confidential?

There are a couple of things that may still be kept confidential. These include the amount paid to the claimant in settlement over a harassment claim and (if they request it) the claimant’s name or anything that could lead to their identification. It should be noted that the law doesn’t apply to settlement or severance agreements based on a demand letter from an attorney representing the claimant.

Businesses seldom have sexual harassment or assault issues that get to the point of a lawsuit or settlement agreement. When they do, it’s always wisest to make sure that the company is in full compliance with the law. That makes your company’s position easier to defend.