On March 24, 2022, Governor Jay Inslee signed into law Engrossed Substitute House Bill 1795, also known as the Silenced No More Act, which expands worker protection in Washington State. More specifically, it prohibits employers from requiring or requesting that workers sign agreements containing nondisclosure or non-disparagement provisions restricting their right to discuss factual information regarding illegal discrimination, harassment, sexual assault, retaliation, wage and hour violations, or any other conduct “that is recognized as against a clear mandate of public policy.”  Washington State’s Silenced No More Act will go into effect on June 9, 2022.

While other states such as California, New York, and Illinois have enacted similar NDA-narrowing laws covering different forms of employment discrimination, Washington’s new law is arguably the most restrictive. For instance, New York, California, and Illinois prohibit nondisclosure provisions related to unlawful discrimination in settlement agreements unless an employee wants such confidentiality. Washington State, however, takes it a step further by barring confidentiality clauses even if requested by the employee (as defined by the Act). As another example, New York law still permits nondisclosure clauses in pre-employment and severance agreements, but Washington’s law applies broadly to any agreement between the employer and “employee” as defined in the Act, including independent contractors not typically protected by EEO laws.

While Washington is the most recent state to pass a law on this subject, it may not be the last. The movement to prohibit secrecy covenants is gaining traction as workers’ advocates push for legislation at both the state and federal level banning the use of such covenants.

Prohibited Agreements

The newly-added section to Chapter 49.44 of the Revised Code of Washington provides that “a provision in an agreement between an employer and employee not to disclose or discuss conduct, or the existence of a settlement involving conduct, that the employee reasonably believed to be illegal discrimination, illegal harassment, illegal retaliation, a wage and hour violation, sexual assault, or against a clear mandate of public policy is void and unenforceable.” The Act broadly defines “employee” to include current, former, and prospective employees, as well as independent contractors; and encompasses all work-related conduct, whether occurring in the workplace or off-site.

Prohibited Conduct

In addition to prohibiting employers and employees from contractually agreeing to secrecy, the Silenced No More Act Prohibits employers from discharging, discriminating, or otherwise retaliating against an employee for discussing allegations of unlawful conduct. An employer also violates the Act by requesting that employees enter into a prohibited agreement, or attempting to enforce any provision of an agreement prohibited by the new law.

Limited Exceptions

As discussed above, Washington’s Silenced No More Act broadly applies to nearly all agreements between employers and employees. The only exceptions under the law are that employers may keep the amount paid in a settlement agreement confidential, and that the law does not apply to agreements protecting trade secrets, proprietary information, or confidential information that does not “involve illegal acts.”

Retroactive Application

Most importantly, Washington State’s Silenced No More Act applies retroactively and invalidates nondisclosure and non-disparagement provisions entered into “at the outset of employment or during the course of employment” prior to the Act’s effective date. However, the retroactivity provision does not apply to nondisclosure or non-disparagement provisions contained in settlement agreements.

Existing agreements that violate the act do not need to be revised, and a violation occurs only if employers attempt to enforce those agreements. Nevertheless, employers should consider amending or updating existing agreements to comply with the new statute to alleviate concern about enforcement efforts when protecting proprietary information and trade secrets.

Penalties for Violations

Not only does the new law render agreements containing prohibited nondisclosure provisions void, but it imposes significant penalties on non-compliant employers. After the Act takes effect, employers are subject to actual or statutory damages of $10,000, whichever is greater, plus attorneys’ fees, if they violate any of the law’s provisions.

Takeaways

Given the breadth of Washington’s Silenced No More Act, and its significant financial and non-financial ramifications, Washington State employers should immediately:

• Review and update any template employment agreements containing confidentiality and/or non-disparagement provisions;
• Seek legal counsel before attempting to enforce any existing confidentiality agreements entered into before the Act’s effective date; and
• Train managers and supervisors on the implications of the new law, including potential violations for requesting confidentiality and/or taking action against an employee who discusses allegations of illegal conduct.