MODEL BILLS

Limiting Sexual Harassment Clauses in Non-Disclosure Agreements Act

Summary: The Limiting Sexual Harassment Clauses in Nondisclosure Agreements Act prohibits such clauses except for settlement agreements between an employer and former employee.

Based on Washington SB 5996 (enacted 2018)

SECTION 1. SHORT TITLE

This Act shall be called the “Limiting Sexual Harassment Clauses in Nondisclosure Agreements Act.”

SECTION 2. FINDINGS AND PURPOSE

(A) FINDINGS—The legislature finds that:

1) Nondisclosure agreements are very common in business and it is widely accepted that nondisclosure agreements are appropriate in order for a business to maintain its trade secrets.

2) It has also become fairly common for businesses to broaden nondisclosure clauses in their employment agreements to cover more than trade secrets, and many now explicitly include broad provisions forbidding employees and former employees from making any critical comments that could harm the company’s or the company executives’ business reputation.

3) A nondisclosure agreement that purports to prevent an employee or former employee from speaking about sexual harassment may considered to violate the National Labor Relations Act. However, even if such an agreement is prohibited by federal law, there is extremely little case law on the subject and an employee would face years of expensive litigation to challenge one.

4) While employment contracts should be prohibited from including nondisclosure for sexual harassment, it is appropriate to allow such a nondisclosure agreement as part of a settlement between an employer and former employee; otherwise the former employee would have less leverage in negotiations.

(B) PURPOSE—This law is enacted to protect the health and safety of employees.

SECTION 3. SEXUAL HARASSMENT CLAUSES IN NONDISCLOSURE AGREEMENTS

After section XXX, the following new section XXX shall be inserted:

(A) DEFINITIONS—In this section:

1) “Sexual assault” means any type of sexual contact or behavior that occurs without the explicit consent of the recipient.

2) “Sexual contact” has the same meaning as in [cite existing law].

3) “Sexual harassment” has the same meaning as in [cite existing law].

4) “Employee” does not include human resources staff, supervisors, or managers when they are expected to maintain confidentiality as part of their assigned job duties. It also does not include individuals who are notified and asked to participate in an open and ongoing investigation into alleged sexual harassment and requested to maintain confidentiality during the pendency of that investigation.

(B) LIMITS ON NONDISCLOSURE AGREEMENTS

1) Except for settlement agreements under subsection (4) of this section, an employer may not require an employee, as a condition of employment, to sign a nondisclosure agreement, waiver, or other document that prevents the employee from disclosing sexual harassment or sexual assault occurring in the workplace, at work-related events coordinated by or through the employer, or between employees, or between an employer and an employee, off the employment premises.

2) Except for settlement agreements under subsection (4) of this section, any nondisclosure agreement, waiver, or other document signed by an employee as a condition of employment that has the purpose or effect of preventing the employee from disclosing or discussing sexual harassment or sexual assault occurring in the workplace, at work-related events coordinated by or through the employer, or between employees, or between an employer and an employee, off the employment premises is against public policy and is void and unenforceable.

3) It is an unfair practice under chapter [cite existing law] for an employer to discharge or otherwise retaliate against an employee for disclosing or discussing sexual harassment or sexual assault occurring in the workplace, at work-related events coordinated by or through the employer, or between employees, or between an employer and an employee, off the employment premises.

4) This section does not prohibit a settlement agreement between an employee or former employee alleging sexual harassment and an employer from containing confidentiality provisions.

SECTION 4. EFFECTIVE DATE

This Act shall become effective on July 1, 20XX.