California Would Ban ‘Secret Settlements’ in Discrimination Lawsuits Under Proposed Law

Three years after California outlawed sexual misconduct non-disclosure agreements, a Democratic state lawmaker introduced new legislation on Monday that would expand the law to include all workplace harassment and discrimination settlements.

Source: The Sacramento Bee | Published on February 12, 2021

Close up of a generic non-disclosuer agreement with a pen and a gavel.

Dubbed the “Silenced No More Act,” Senate Bill 331 would include discrimination against race, ethnicity, sexual orientation, age, disability and religion in the 2018 law that currently applies to instances of gender-based mistreatment and sexual offenses.

Sen. Connie Leyva, D-Chino, who also wrote the 2018 bill, introduced this year’s proposal as the next chapter in the #MeToo movement that began in 2017 to raise awareness on and help end sexual violence.

“It is unacceptable for any employer to try to silence a worker because he or she was a victim of any type of harassment or discrimination,” Leyva said in a prepared statement. “SB 331 will empower survivors to speak out—if they so wish — so they can hold perpetrators accountable and hopefully prevent abusers from continuing to torment and abuse other workers.”

Non-disclosure contracts prohibit individuals from making public the terms of any settlement or agreement between involved parties, which activists have said are a way to silence victims.

In 2018, the California Chamber of Commerce and other business associations argued that the law would “interfere” with the settlement process, which they said is often a business decision that weighs litigation versus agreement costs. The groups also claimed that “allegations in a complaint are often disputed” and that settlements can help both the employer and worker avoid a trial loss.

But after banning these so-called “secret settlements,” Leyva said more work remained to address unlawful behavior in the workplace. Claims aren’t always limited to sexual harassment. Instead, they’re often connected to other demographics, like race, sexual orientation and age. Expanding this law, supporters said, would ensure all claims are protected against non-disclosure agreement rules.

The bill would enhance “intersectional protections,” said Ifeoma Ozoma, a former Pinterest employee who raised concerns over allegedly being underpaid and subjected to racist comments and retaliation in the company.

The measure would also prohibit confidentiality and non-disparagement clauses that employees are sometimes required to sign in a severance process.

“Employers have increasingly been allowed to use silencing agreements to strip workers of their right to speak out about their experience in the workplace,” Mariko Yoshihara, legislative counsel and policy director at California Employment Lawyers Association, said in a statement. “This bill is critically important to ensure that workers never have to sign away their ability to speak out about harassment or discrimination as a condition of their employment or to settle a claim.”