Hunton Employment & Labor Perspectives

California already has prohibitions on including non-disclosure provisions in certain settlement agreements related to sexual harassment.  Now California seeks to expand these prohibitions by enacting the Proposed California SB-331 (“Silenced No More Act”).  The new Act aims to prohibit provisions within any agreement that prevent or restrict the disclosure of factual information of claims related to harassment, discrimination, and retaliation.  The proposed bill recently passed senate and assembly, and if approved by governor, will become effective January 1, 2022.

Existing law, California Code of Civil Procedure section 1001, prohibits a settlement agreement from preventing the disclosure of factual information regarding specified acts related to a claim filed in a civil action or a complaint filed in an administrative action.  These acts include

• sexual assault;
• sexual harassment;
• workplace harassment or discrimination based on sex, failure to prevent such an act, or retaliation against a person for reporting such act; and
• harassment or discrimination based on sex by the owner of a housing accommodation, or retaliation against a person for reporting such an act.

Cal. Civ. Pro. § 1001 was enacted as part of SB-820, known as the STAND (Stand Together Against Non-Disclosures) Act, which was a response to the #MeToo movement which argued that secret settlements played in shielding perpetrators of sexually inappropriate behavior.

California now seeks to expand the coverage of Cal. Civ. Pro. § 1001.  SB-331 seeks to prohibit provisions in settlement agreements that restrict or prevent the disclosure of factual information of claims related to all forms of harassment, discrimination, and retaliation.  In other words, the bill expands the prohibition to include acts of workplace harassment or discrimination not based on sex.  For example, it includes discrimination or harassment based on race, religion, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, familial status, sex, gender, gender identity, gender expression, age, sexual orientation, or veteran or military status.  (Cal. Gov. Code §§ 12940 and 12955.)

SB-331 also aims to prohibit an employer from requiring an employee to sign an agreement that denies an employee the right to disclose information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that an employee believes to be unlawful.  This section would apply not only to agreements made in exchange for a raise or bonus, or agreements made as a condition of employment or continued employment, but also to agreements related to an employee’s separation such as a severance agreement.