Expanding California’s limitations on the use of non-disclosure provisions for certain claims filed in court or administrative proceedings, Governor Gavin Newsom signed SB 331 on October 7, 2021. This bill, impacting agreements entered into on or after January 1, 2021, adds to the list of claims that cannot be subject to a non-disclosure provision claims for acts of workplace and housing harassment or discrimination and now includes a variety of claims, not just those based on sex.
SB 331 follows up 2018’s SB 820. The 2018 law, enacted in response to the #metoo movement, prohibited provisions in settlement agreements regarding filed claims of sexual assault, sexual harassment, or harassment or discrimination based on sex. The goal of SB 820 was to prevent “secret settlements” that may allow a serial harasser to go undetected for a long period of time. In addition to the prohibition on non-disclosure provisions for these claims, the law also prohibited a court from entering an order that required such non-disclosure.
The current bill aims to cover all workplace harassment claims based on the Fair Employment and Housing Act that might be subject to a non-disclosure provision. As with its predecessor law, the current bill does not allow a court to order non-disclosure for discrimination or harassment claims.
Importantly, SB 331 expands the type of non-settlement agreements regarding employment harassment or discrimination that are subject to the non-disclosure prohibition, from agreements as a condition of employment or continued employment, to also include to an employee’s separation agreement.
SB 331 only applies to settlement agreements entered into on or after January 1, 2022. It does not state whether or not the expansion of the law as to separation agreements is retroactive or a date when it is effective.
