Asima J. Ahmad and Kevin M. Passerini
As predicted in a previous post, New Jersey Governor Phil Murphy signed Senate Bill 121 last month. This bill has two primary effects:
- “A provision in any employment contract [(other than a collective bargaining agreement, which is excepted)] that waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment” is now against public policy and unenforceable.
- “A provision in any employment contract or settlement agreement which has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment” is now unenforceable “against a current or former employee who is a party to the contract or settlement,” but remains enforceable against the employer unless “the employee publicly reveals sufficient details of the claim so that the employer is reasonably identifiable.”
The practical effect of these provisions is a ban on companies’ use and enforcement of nondisclosure provisions to conceal claims of discrimination, retaliation, and harassment and a ban on companies’ efforts to avoid or frustrate application of New Jersey law through, among other things, forum-selection, dispute resolution, and choice-of-law provisions. While the law does permit employers to defend themselves against an employee who publicizes information related to such claims, in order to exercise that right, “[e]very settlement agreement resolving a discrimination, retaliation, or harassment claim by an employee against an employer shall include 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.” Continue reading “New Jersey Governor Signs #MeToo Bill, Potentially Impacting All Employment and Settlement Agreements—Employers Beware!”