California employers should ensure that they discuss the use of departure agreements, non-insults, or settlement agreements with their preferred CDF attorney before the end of the year and before use in 2022 to ensure compliance. [2] “Negotiated” means that the agreement is voluntary, deliberate and informed; the agreement gives the employee valuable consideration; and the employee is dismissed and has the opportunity to hire a lawyer or is represented by a lawyer. SB 331 also restricts the use of non-disclosure provisions in other types of employment contracts, including departure agreements, even if no internal dispute, lawsuit or complaint has been filed. ==External links==The Tax Cuts and Employment Act enacted in December 2017 amended the Internal Revenue Code to prohibit tax deductions as ordinary and necessary business expenses for settlements or payments “related to sexual harassment or sexual abuse” if such settlement or payment is subject to a non-disclosure agreement. The law also prohibits any deduction of attorneys` fees related to confidential billing or payment. See 26 U.S.C§ 162(q). In addition, an employer must give an employee or former employee at least five days to review a termination agreement that the employer offers to the employee. Finally, SB 331 requires that when an employer offers a severance agreement to an employee, it must inform the employee that it has the right to contact a lawyer. The employer must allow a reasonable period of time (at least five working days) for the consultation. An employee may decide to sign such an agreement before the end of the consultation period, provided that the employee`s decision is conscious and voluntary and is not motivated by the employer by fraud, misrepresentation or a threat to withdraw or modify the offer before the end of the consultation period, or by employees who sign such an agreement before the end of that period; provides other conditions. SB 1300 added section 12964.5 to the Government Code, making it illegal for an employer to request the release of a claim or right under the Employment and Housing Equity Act (“FEHA”) and sign an employee. In addition, the law prohibits an employer from requiring an employee to sign a non-participation agreement or other document denying the employee the right to disclose information about illegal acts in the workplace, including but not limited to sexual harassment.
The new law came into force on 1 January 2019. In 2019, a California law went into effect that prevented employers from imposing non-disclosure agreements (NDAs) as a condition of settling a civil or administrative action that had raised complaints of sexual harassment or gender discrimination. The Act extends these restrictions to complaints of harassment and discrimination based on a protected characteristic raised in a civil or administrative complaint. Parties to a settlement agreement may not prevent or restrict a person from disclosing the underlying factual information in connection with any claim of harassment, discrimination or retaliation under FEHA, including, but not limited to, claims based on race, sexual orientation, religion, color, national origin, ancestry, disability, health status and age. As mentioned above, this restriction builds on and extends SB 820, which initially prohibited settlement agreements with respect to sex-based claims. Since SB 331 applies to agreements entered into on or after January 1, 2022, employers should update their forms and carefully consider resolving potential or ongoing litigation before the new year. [1] “Information about illegal acts in the workplace” includes, but is not limited to, information about harassment, discrimination or any other conduct that the employee has for legitimate reasons to believe is unlawful. insert the required disclaimers of the law into employment contracts (including letters of offer and confidentiality agreements) and separation agreements that contain non-disclosure or non-disparaging clauses; and Section 1001 of the California Code of Civil Procedure currently provides that a settlement agreement cannot prevent the disclosure of factual information in connection with a lawsuit or indictment filed by an administrative agency concerning sexual assault, sexual harassment, gender discrimination, or retaliation against a person for reporting harassment or discrimination based on sex. The law allows the parties to agree to protect the identity of the applicant and the amount of a settlement agreement.
To this end, SB 331 provides an example of language that, in conjunction with a general confidentiality clause, allows an “exception” to be used in any agreement between an employer and an employee as follows: “Nothing in this Agreement prevents you from disclosing information about illegal acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe, that is unlawful to discuss or disclose. SB 331 leaves the provisions of the old right to protect the identity of the applicant. In particular, if the applicant requests a provision to protect the applicant`s identity and any facts that could reveal the applicant`s identity, a confidentiality provision is legal as long as a government agency or public servant is not a party to the settlement agreement. As a little extra respite, employers can always include non-insult clauses or similar provisions in agreements, provided there is specific language that clarifies the employee`s right to disclose information about illegal acts in the workplace. Without that wording, the provision would be contrary to public policy and inapplicable. Certainly, to ensure applicability, the creation of such language is best managed by consulting a lawyer. A termination agreement may not prohibit a separate employee from disclosing information about illegal acts in the workplace unless (1) the provision forms part of a settlement agreement to resolve a complaint of discrimination in the workplace that the employee has filed in a court of law, “before an administrative authority, in an alternative dispute resolution forum or through an employer`s internal grievance process.” ” and (2) “the employee was dismissed and given the opportunity to hire a lawyer, or [was] represented by a lawyer”. Notwithstanding these limitations, the new legislation allows parties to a settlement agreement to keep confidential the identity of the applicant and any fact that could lead to its discovery, at the request of the applicant. The parties may also agree to treat the amount paid in the settlement as confidential. In a settlement agreement that includes a prosecution or indictment already filed, the new law also allows the identity of the plaintiff and any facts that could lead to the discovery of the applicant`s identity to remain confidential at the request of the plaintiff.
The law does not prohibit the parties from agreeing to keep confidential the amount paid to settle a claim […].
