By, Jane Weston
6 things HR professionals need to know about those agreements you have your employees sign.
The Silenced No More Act passed in June 2022 in Washington State will cause many Human Resource professionals to pause a little before next agreeing to settle a dispute. Washington, like several other states, is responding to #Metoo in invoking societal change for the equality of rights and protection of all. This law was invoked quickly and closely follows the California law of a similar name. Although many employers in the state lobbied against the law, there wasn’t much public discussion and many human resource professionals were unaware of its passing.
The #Metoo movement created a societal change for the good but some of these laws are having unintended consequences for employers and can get them into some hot water with fines. When laws are quickly passed and have little debate, there can be a lack of awareness of the implications of how they may play out, this law is one where the implications may result in some behavior that negatively impacts those for who the law was specifically designed to protect.
Many employers and HR professionals conduct a type of risk assessment in evaluating and settling employment disputes. Human Resource professionals are like judges, juries, conscience, and insurance for corporations. The role of HR professionals is to help protect both parties and support the resolution of employment disputes. At times nuisance complaints can be brought to HR. At times, cases are presented that aren’t quite so cut and dry. These situations can result in a judgment call by HR to make a decision to proceed with a case or, make the call to settle. The more egregious situations are arguably easy to make that call on.
The cases that aren’t as clear or are perceived as having less merit in litigating can result in HR deciding to recommend settling. Many of these cases are distracting and would result in hiring legal counsel, preparing witnesses, conducting depositions, and countless hours of preparation for many employees and managers. These cases may cause HR to pause and make the judgment call to evaluate the cost/benefit and make the call to settle rather than continue the argument.
Before June 2022, when these cases were settled, they often came to an agreement. A settlement of monies, in exchange for confidentiality and non-disparagement by either party.
Although these settlements may still occur, confidentiality and non-disparagement protection provisions may no longer apply. So, the question arises, why would any employer settle?
We are seeing an increase in employers not settling for this very law change. Employees who perhaps believed they were wrongly treated and wanted to dispute their case could have wanted to not raise attention and quietly settle for a monetary award and go about their employment business. Those that wanted this protection, have been denied that.
The law outlines that contracts may not contain clauses that prohibit discussion of conduct that the employee reasonably believes to be discrimination, harassment, retaliation, wage and hour violations, or sexual assault. At the workplace, at work-related events coordinated through or by the employer, between employees or between an employer and employee whether on or off the employment premises and that prohibited nondisclosure and non-disparagement provisions include those contained in employment agreements, independent contract agreements, agreements to pay compensation in exchange for the release of a legal claim or any other agreement between an employer and an employee.
Here are the top things you need to know.
Employers can no longer ask for a confidentiality clause in settlement agreements relating to nondisclosure or non-disparagement, prior agreements including arbitration clauses are void
It’s retroactive to January 2022
Employers can still ask for confidentiality but only to protect trade secrets or other confidential information if it does not touch on harassment, discrimination, or retaliation elements
Having a clause in an agreement referring to confidentiality and non-disparagement can invoke an actual or statutory damage claim of $10,000 or more, as well as reasonable attorney fees and costs
This law applies to Washington residents, so other state employers who have remote workers need to be aware of where their workers are residing and/or working
There is a movement toward this being a federal law
Non-disclosure clauses and arbitration agreements along with severance agreements are standard employment agreements and a significant number of American employers use them. HR professionals need to be aware of how this law impacts settlements, severances, reductions, layoffs, employee handbooks, and other employment agreements and the language they contain.
Activism is alive and well and with growing fines, public challenges, and trials by social media - employers should be cautious about entering into agreements that unknowingly may cause fines and public attention.
Not every employer can afford legal counsel, but no employer can afford to not have HR counsel in these rapidly changing times.
This work is licensed under CC BY-ND 4.0