In 2018, in response to the #MeToo movement, California passed SB 820, the STAND (Stand Together Against Non-Disclosure) Act. SB 820 prohibited using confidentiality provisions in settlement agreements in cases involving claims of sexual assault, sexual harassment, and workplace harassment or discrimination based on sex. We blogged about SB820 previously here. After SB 820 became law, settlement agreements could not prevent individuals from discussing the underlying facts related to claims of workplace sexual harassment or sex discrimination. Significantly, SB 820 did not extend to claims based on other protected characteristics (age, race, sexual orientation, etc.).
But all that changed on January 1, 2022 when another bill, known as SB 331, took effect. With the enactment of SB 331, the prohibition on confidentiality now applies to any type of claim of workplace harassment or discrimination – not just sexual harassment or sex discrimination, but also claims of workplace harassment or discrimination based on age, race, religion, color, national origin, ancestry, sexual orientation, gender, disability, medical condition, familial status, or any other protected characteristic.
SB 331 also expands Government Code Section 12964.5. That statute previously prohibited employers from including in non-disparagement agreements any clause restricting an employee from disclosing information about sexual harassment or other related unlawful acts in the workplace in exchange for a promotion, bonus, or continued employment. But now, SB 331 makes it illegal to include in a non-disparagement agreement any provision that prohibits an employee from disclosing information about any type of harassment or discrimination or other conduct that an employee reasonably believes is unlawful in the workplace, unless the agreement contains specific language spelled out in the statute.
While SB 331 continues to allow settlement or severance agreements to keep amounts paid confidential, and continues to support protection for employer trade secrets, proprietary information, and other confidential information that does not involve unlawful workplace harassment or discrimination, SB 331 still brings sweeping and significant change for California employers. SB 331 applies to all agreements entered into on or after January 1, 2022; therefore, employers should review their severance and/or non-disparagement agreements now to ensure that they comply fully with SB 331.