Law Against Discrimination Amended To Prevent Confidentiality Provisions

On March 18, 2019, Governor Phil Murphy signed a bill amending New Jersey’s Law Against Discrimination. The amendment, which took effect immediately, provides that non–disclosure provisions that seek to conceal details relating to a claim of discrimination, retaliation, or harassment are void against public policy. This amendment applies to any employment contract or settlement agreement entered into, renewed, modified, or amended on or after the effective date of the act

Moving forward, employees who enter into a non–disclosure agreement are entitled to disclose the details of his or her claim to the public. However, employers are bound by the agreement unless and until the employee reveals the identity of the employer. Any employer that attempts to enforce an unenforceable provision “shall be liable for the employee’s reasonable attorney fees and costs.” Additionally, employers cannot retaliate against a current or prospective employee “on the grounds that the person does not enter into an agreement or contract that contains a provision deemed against public policy and unenforceable.”

The amendment further requires that settlement agreements now contain “a bold, prominently placed notice 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.”

Non–disclosure provisions have long been an essential element of employment contracts and settlement agreements. They help reduce uncertainty and provide an incentive for the parties to settle claims quickly and discreetly. This amendment will undoubtedly change the way employers analyze employment and settlement decisions, and may result in more protracted litigation.

Finally, the amendment provides that an employee cannot prospectively waive any right or remedy under the Law Against Discrimination or any other statute or case law. The true scope of this section is presently unknown. The amendment could plausibly be read as a prohibition on mandatory arbitration provisions and jury trial waivers. If so, serious questions arise as to whether this section will survive judicial scrutiny.

Accordingly, this amendment will force employers to reconsider their litigation strategy as well as their employment contracts, settlement agreements, and employee handbooks. Should you have any questions about the law or how it could impact your business, please contact the employment lawyers at Brown & Connery, LLP.