At the close of this legislative session, one of the laws signed by the Governor effectively prohibits any provision in settlement agreements preventing the disclosure of information regarding sexual harassment and sex discrimination. The law takes effect on January 1, 2019, and will retroactively apply to any previously entered settlements barring the disclosure of such information.
The law will specifically ban any settlement agreement provision that prevents disclosure of facts regarding: acts of sexual assault, acts of sexual harassment, acts of workplace sexual harassment, acts of workplace sex discrimination, failure to prevent acts of workplace sexual harassment or sex discrimination, and retaliation against a person for reporting sexual harassment or sex discrimination. While seemingly all encompassing, the law does permit a provision which would shield the identity of the claimant and facts which could reveal this person’s identity from disclosure. But, this is only available upon the request of the claimant and in matters not involving a government agency or public official.
This new law is aimed at ending the practice of “secret settlements” where the names and facts of sexually-based claims would be kept strictly confidential as a term of the settlement. This information will no longer be subject to these strict confidentiality provisions. One fact which can remain confidential, however, is the amount paid in settlement of a claim.
Both public and private employers will be subject to this new law in both civil and administrative actions. Any violation of the new law can result in liability for civil damages.
The new rule poses a serious risk to even the best-run companies, as allegations of sexual harassment, discrimination, and retaliation will no longer remain confidential. Instead, these allegations run the risk of seriously damaging a company’s reputation, regardless of whether they are true or not. While proponents of the new law believe this will assist victims of harassment in filing their complaints, critics believe it will deter companies from settling these types of claims because the allegations, whether true or false, can become public knowledge and hurt the company’s image and reputation.
It goes without saying that the best way to avoid having to deal with allegations of sexual harassment in the workplace is to comply with training requirements, promote a transparent complaint system which can effectively resolve these types of issues, and observe your employees and outside contractors (whose acts of sexual harassment or discrimination against your employees may cause liability for you) to ensure they are not harassing or discriminating against anyone else, among other things.
If you would like more information about the new developments in this area of law, if you think your policies regarding sexual harassment need to be reviewed, or if you need assistance in determining whether sexual harassment may be an issue within your company, contact the attorneys at Navigato & Battin.