California Senate Bill 331 is currently in Assembly after passing the State Senate 29-8. Named the “Silenced No More Act,” the measure was introduced by Senator Connie Leyva and seeks to expand protections for employees in relation to non-disclosure agreements (NDAs). Having by now become commonplace in various industries as part of the hiring or exit process, workers are often required to sign these contracts in order to start a particular job or receive a severance package.
The State Legislature passed the STAND (Stand Together Against Non-Disclosures) Act in 2018, which prohibits the use of NDAs in cases involving allegations of sex discrimination, sexual harassment, or sexual assault. This bill was prompted by participants in the #MeToo movement who made clear how NDAs included within settlement agreements had repeatedly silenced victims of such discrimination and abuse. SB-331 would cover workplace discrimination in several other areas as well, including allegations of employment discrimination on the basis of race, ethnicity, age, disability, and religion.
Frequently written with “language designed to confuse and intimidate,” it’s important for workers to understand their options when it comes to NDAs. Knowing about applicable protections like the STAND Act in California is a start, and an employment lawyer can advise on the relevant laws in a given jurisdiction. It’s also helpful to reframe the power of an agreement like this.
There is a lot of misunderstanding about how NDAs operate in the real world. The case of former Pinterest employee Ifeoma Ozoma is instructive. She spoke out publicly in 2020 alleging racial discrimination at the company – in clear violation of the NDA she signed. Contrary to what many people believe, signing a contract in which you promise not to do something doesn’t actually keep you from doing it. Agreeing to an NDA means that you may be subject to penalties for breaking confidentiality, but the employers who require these are often disinclined to sue. If a company is already getting bad press for what a former employee has revealed, many will, like Pinterest, choose not to sue for breach of the NDA so as not to add to the negative publicity. This is especially true in cases of alleged discrimination or harassment.
While legislators in California seek to create protections around NDAs and perhaps set a precedent for other parts of the country, remember that, wherever you are, the existence of a contract like this doesn’t mean you’re without options. As career coaches, we can also help to provide guidance around non-disclosure agreements and other common employment practices used in the hiring and severance processes. Below are ten things to keep in mind when it comes to non-disclosure agreements.
- A non-disclosure agreement is a contract or clause requiring a person to maintain confidentiality about a particular organization or situation. New hires are often asked to sign these on the first day of a job, and these are increasingly utilized with independent contractors as well as full-time employees.
- The use of NDAs by employers, at either the hiring or severance stage, has grown in recent years.
- As with many written contracts, a non-disclosure agreement will often stipulate financial penalties for violating its terms. These commonly allow the prevailing party in a lawsuit to recover attorneys’ fees.
- Contrary to what many people believe, signing an NDA doesn’t prevent you from disclosing, but it does mean you have to be willing to pay the penalties if you do.
- In California, workers subject to NDAs are protected by the STAND Act. Inspired by the #MeToo movement and passed in 2018, this law prohibits the use of NDAs in cases involving allegations of sex discrimination, sexual harassment, or sexual assault.
- The California State Assembly is currently considering Senate Bill 331, which would expand these protections to cover workplace discrimination on the basis of race, ethnicity, age, disability, and religion.
- While an employer may have grounds to sue a former employee for breach of an NDA, it’s not always in the company’s best interest.
- There are many examples of former employees breaking their NDAs to expose discrimination without consequences. In the case of Ifeoma Ozoma, for example, Pinterest has not sued.
- Crowdfunding platforms like GoFundMe offer an alternative for those who do face penalties for speaking out. Stormy Daniels, for instance, used crowdfunding in 2018 in battling her much-publicized NDA.
- If you’ve signed an NDA, you still have options. The best way to weigh these is to consult with a lawyer who specializes in employment law within your state.
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