Employers accused of employment discrimination, sexual harassment, or retaliation often times offer the claimant a settlement. The settlement is generally an attempt to make the claim disappear or “go away” to avoid litigation. This avoids the high costs associated with litigation and allows the accused party to settle without any admission of liability or guilt. In addition to an agreed-upon amount of money, the settlement typically also contains a confidentiality and/or non-disclosure provision. These types of agreements ensure that the original claims stay quiet and word does not get out.
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Recent Amendments to NJLAD
However, recent amendments to the New Jersey Law Against Discrimination (NJLAD) may change the outcomes of these types of claims. Under New Jersey Senate Bill 121, employers are not permitted to enforce arbitration agreements. Even though arbitration allows for claims to be adjudicated in a private setting, employers will now be denied this opportunity. As a result, these changes may create unintended consequences in employment disputes.
New Jersey Senate Bill 121
The New Jersey Senate Bill 121 amends the NJLAD in significant ways. In one way, the law provides that non-disclosure provisions in settlement agreements that have the purpose or effect of concealing details of an employment claim are against public policy and unenforceable. When a current or former employee makes a discrimination or harassment claim about her employer, there can be a settlement made which includes a non-disclosure agreement. However, this new law renders any mandatory non-disclosure provision completely unenforceable. Notably though, the law does not apply any agreements entered into before the law went into effect.
The law still permits employers and employees to enter into confidentiality or non-disclosure agreements. However, if the two parties do agree to these terms, the agreement must now include bolded, prominently placed notice advising 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.” So although the parties can still choose to insert these types of provisions in settlement agreements, employees are now permitted to disregard these provisions. Effectively, confidentiality and non-disclosure agreements are no longer enforceable by the employers. The employee can choose at any time to ignore the provisions.
However, the employers become released from the confidentiality or non-disclosure provisions if the employee “publicly reveals sufficient details of the claim so that the employer is reasonably identifiable.” Though this standard has not yet been strictly defined or determined.
Additionally, the law also provides that any provision in an employment contract “that waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment” is “against public policy and unenforceable.” Therefore, an employment contract that requires an employee to waive his or her right to a jury trial or arbitrate a claim of discrimination, retaliation, or harassment, is now void.
However following these recent amendments, there is an argument made that these changes are preempted by the Federal Arbitration Act (FAA).
If you experience any discrimination or harassment in the workplace, you are not alone. We are here for you.
Marlton Employment Discrimination Lawyers at McOmber & McOmber, P.C. Protect Employees from Discrimination in the Workplace
If you have experienced any discrimination, a Marlton employment discrimination lawyer at McOmber & McOmber is ready to help you. We are experienced in all facets of New Jersey employment law and will tirelessly work for you. To schedule a free, confidential consultation, call our Marlton office at 856-985-9800, our Red Bank office 732-842-6500, or contact us online.