Our Lips Are(n't) Sealed

How a new bill will affect employer NDAs in New Jersey.

Brittany S. Hale, Esq.

Governor Phil Murphy signed a new bill into law on Monday which will restrict the use of non-disclosure agreements in employment and settlement contracts. Under the new law, employers may not prohibit employees from discussing or bringing forth cases that include harassment, discrimination, or retaliation. Complaints of sexual assault and sexual harassment also fall within the purview of the new bill.

Non-disclosure agreements ("NDAs") are typically found in employment contracts when sensitive information, such as trade secrets, are being used. However, these provisions have also been used to limit public discussion of potentially troubling behavior either in a settlement agreement or when an employee chooses to leave an employer. In the #MeToo era, such provisions are often seen as a means to silence victims of illegal discrimination or harassment. Why? Because violating an NDA can result in an employer filing for injunctive relief and/or an employee having to pay monetary damages.

So what does this mean for employers? Well, any provision which requires an employee to conceal details pertaining to claims of harassment, discrimination, or retaliation will be unenforceable. An employer will not be able to prevent an employee from discussing claims of alleged abuse or harassment. This does not, however, mean that employers lose the ability to protect against such claims. If an employee publicly discloses enough information so that the employer is identified, that employer is free to discuss the case and claims as well.

Here are a few questions employers might want to consider in the coming weeks:

• "How reliant are we on these NDA provisions?"
• "How can we work to provide a safer environment for our employees?"
• "Where can we eliminate risk?"

With change comes opportunity. Company goals need not oppose employee interest. New Jersey employers have the chance to use this bill to demonstrate just how seriously they take employee safety and bridge the gap between individual contributions and collective success.