When companies settle harassment, discrimination, or retaliation cases, it's pretty standard that all parties sign non-disclosure agreements. For example, a Florida man had to give back an $80,000 settlement for discrimination after his daughter blabbed

But, New Jersey has decided enough is enough, and from now on, if the victim wants to keep everything quiet, they can, but if they want to speak up, there's nothing to stop them. Incidentally, once the plaintiff speaks up the defendant (the company) can also speak up.

Employment attorney, Eric Meyer, explains the changes as follows:

Put simply, employees will always be able to discuss claims arising under New Jersey's Law Against Discrimination, including how much your business paid them to settle those claims.

If the employee publicly reveals sufficient details of the claim so that the employer is reasonably identifiable, then the non-disclosure provision is unenforceable against the employer.

So, if both sides want to remain tight-lipped about a settlement, they can.

(The new law does not apply either to non-competition agreements or agreements concerning non-disclosure of proprietary information or trade secrets. It also exempts collective bargaining agreements.)

Why I changed my mind about this type of legislation

When Pennsylvania looked into this earlier, I opposed the legislation, but I support the New Jersey take, for one key reason: the plaintiff gets to decide. I didn't want to discourage people from reporting sexual harassment or racial discrimination because they didn't want their names all over the internet, but this allows the plaintiff to stay quiet and the company can be bound to silence as long as the plaintiff says nothing.

This also encourages fair settlements, as the companies know it can be spread all around the internet if the plaintiff wants. For instance, what better encouragement than to not give bad references to a former employee who settled a lawsuit?

You should pay attention, even if you're not in New Jersey

As far as I know, no other state has a similar law, but legislatures love to borrow from each other. Massachusetts prohibited employers from asking candidates about their previous salaries and a bunch of other states jumped on board. 

If this proves to be effective in New Jersey (and possibly, even if it doesn't), you may see your state legislature adopt similar legislation. This is one of the many reasons why you should never write a settlement document or a general release on your own without consulting a local employment attorney who is up to date on all relevant laws.

Published on: Mar 25, 2019
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