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New Jersey Moves to Bar Confidentiality in Certain Settlements

Consistent with what appears to be a recent legislative trend throughout the country, New Jersey Senate Bill S121 would bar the use of confidentiality provisions in the settlement of certain discrimination and sexual harassment suits.  On June 7, 2018, this bill passed the Senate almost unanimously.  If passed in its current form, the law would prohibit the inclusion of a non-disclosure provision in any employment contract or settlement agreement that conceals “details relating to a claim of discrimination, retaliation, or harassment,” and would deem such provisions to be “against public policy and unenforceable against a current or former employee… who is a party to the contract or settlement.”  However, the bill also provides that if the employee “publicly reveals sufficient details of the claim so that the employer is reasonably identifiable, then the non-disclosure provision shall also be unenforceable against the employer.”  In addition, the bill currently contains a requirement that a “bold and prominently displayed” notice be included in “every settlement agreement resolving a discrimination, retaliation, or harassment claim…[stating] that although the parties may have agreed to keep the settlement and underlying facts confidential, such a provision in an agreement is unenforceable against the employer if the employee publicly reveals sufficient details of the claim so that the employer is reasonably identifiable.”  Violations of this law would allow for a private cause of action with a two-year statute of limitations, and would allow for the recovery of attorneys’ fees and costs by a prevailing plaintiff.

As always, employers are well-served to take all appropriate steps to address the prevention of workplace harassment and discrimination.  These serious issues remain in the forefront in both New Jersey, and on a national level, and prevention of harassment is a consistent focus of the Equal Employment Opportunity Commission.  Training of employees and managers is a must for all employers, and our L&E Group can provide that training.  Click here to learn more about our training.

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