A proposed bill in California seeks to protect workers against nondisclosure agreements and empower them to speak out about alleged acts of discrimination, including racism. Senate Bill 331, known as the Silenced No More Act, was introduced in February 2021 and seeks to expand protections against confidential settlements to cover all forms of harassment or discrimination under California law, including on the basis of race, ancestry, religion or gender identity. If passed, the law will impose greater restrictions on companies’ freedom to contract settlement and non-disparagement agreements.
New Obligations if SB 331 Passes
- SB 331 will expand the existing prohibition of provisions that prohibit discussing sexual harassment in the workplace to discussing any type of harassment (i.e., race, age, religious harassment). (See discussion of SB 820 below.)
- The law will prohibit non-disparagement agreements that prohibit the disclosure of information about unlawful acts in the workplace.
- The law also will create new obligations, such as the requirement to notify the employee that the employee has a right to consult an attorney regarding the agreement and giving the employee “a reasonable time period of not less than five business days” in which to do so.
Several Employer-Friendly Changes to Observe
- The law clarifies that including a general release or waiver of all claims in an agreement related to an employee’s separation from employment does not violate the statute.
- It verifies that the law does not prohibit a provision that precludes the disclosure of the amount paid in settlement of a claim.
- It confirms that employers may protect trade secrets, proprietary information, or confidential information that does not involve unlawful acts in the workplace.