When Washington’s new Silenced No More Act went into effect earlier this month, companies across the state were prohibited from requiring that employees agree to or comply with non-disclosure and non-disparagement agreements, including settlements.
Silenced No More should serve as a wakeup call for companies to review their existing NDAs and employment agreements and realize their employees have vastly more freedom to talk publicly about everything from harassment, sexual assault and retaliation to discrimination, safety claims, and wage and hour violations.
The new law, which went into effect on June 9, makes Washington only the second state to provide such extensive prohibitions. A similar law in California became effective on Jan. 1.
The law’s language is abundantly clear, stating that “a provision in an agreement by an employer and an employee not to disclose or discuss conduct, or the existence of a settlement involving conduct, that the employee reasonably believed under Washington state, federal, or common law to be illegal discrimination, illegal harassment, illegal retaliation, a wage and hour violation, or sexual assault, or that is recognized as against a clear mandate of public policy, is void and unenforceable.”
All employment agreements are fair game under the law, including independent contractor agreements, agreements to pay compensation in exchange for release of a legal claim, or any other agreement between an employer and an employee. The only caveats are that employers can continue to use non-disclosure agreements to safeguard confidential information, proprietary information and trade secrets.
Stated simply, Washington companies that were used to saying to employees “this stays confidential” have little ground to require or even request such confidentiality going forward – and will need to revise prior agreements that require it. Even during internal investigations, companies are now prohibited from suggesting that employees keep those matters confidential.
In settlement and severance agreements – where companies have often routinely required confidentiality provisions – the only issue employees can now be restricted from disclosing is the dollar amount. But they are free to discuss their allegations and claims of company misconduct.
The law also is retroactive, meaning agreements signed before June 9, 2022, that preclude disclosure cannot be enforced going forward. However, settlement agreements signed before the effective date do not fall under the new rules. Non-disclosure and non-disparagement clauses in those earlier settlements will still keep former employees from discussing them.
So, what should Washington companies do in the coming days and weeks?
- Review existing employer-employee agreements to make sure nothing violates the new law. Revise them when necessary.
- Be cautious when entering into new employment agreements. Specifically, don’t tell your new employees that as a condition of their employment they cannot discuss the topics above.
- Other than seeking restrictions on disclosure of settlement or severance amounts, do not ask for non-disclosure and non-disparagement clauses in severance and settlement agreements. Don’t even suggest it.
Employers who proceed without heading Silenced No More do so at their own peril. The law states that an employer who requires or requests non-disclosure may be liable for statutory damages of $10,000 or actual civil damages.
Peter Hicks is a shareholder at Jordan Ramis, where he focuses on litigation and counseling with an emphasis on employment and commercial law.
Article Source: Vancouver WA Business Journal