#MeToo, and I’m Free to Tell – New Jersey’s New Employment Discrimination

By Rick Shulman, Member of the Firm

In the aftermath of the #MeToo movement, and the furor surrounding recent newsworthy cases relating to sexual harassment, a number of states across the country have enacted or considered legislation which would permit the victims of discrimination or sexual harassment to disclose their experiences without the fear of legal retribution. Perhaps not surprisingly, New Jersey, which is often in the forefront of progressive statutory and case law changes in this context, in March 2019 amended its “Law Against Discrimination” (“LAD”) in a number of significant respects to “shine the light” on certain perceived inequities in the employment context, and with respect to agreements providing for non-disclosure of claim details as a condition of settlement. The main provisions of this new law are as follows:

1. Any provision in an employment contract which prospectively waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation or harassment, or based upon substantive rights guaranteed by the LAD, will be deemed to violate public policy, and may not be enforced by a Court.
2. Any provision in an employment contract, or in a settlement agreement, which has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation or harassment asserted by a current or former employee which is a party to the contract or settlement, will be deemed against public policy, and unenforceable against the employee. Conversely, the confidentiality provision in such a contract or settlement agreement will be enforceable against the employer, unless the employee’s disclosure reveals sufficient details so as to make the identity of the employer identifiable, in which case the employer will then also be free to discuss the claim and its settlement.
3. Every settlement agreement resolving a discrimination, retaliation or harassment claim by an employee against an employer must include a bold, prominently placed notice that although the parties may have agreed to keep the settlement and the underlying facts confidential, if the employee reveals sufficient details of the claim to enable identification of the employer, then the employer will also be free to discuss the claim and its settlement.
4. These new rules will not prevent an employer from requiring an employee to sign an agreement providing for his or her non-disclosure of proprietary business information, and/or providing for employee non-competition either during or after the employee’s period of employment with the employer.
5. No person or company may take any retaliatory action against an employee or prospective employee who refuses to enter into an agreement that contains any provision that this statute makes void as against public policy.
6. These new laws will apply to all contracts and agreements entered into, renewed, modified or amended after the date of the statute’s enactment.
7. Any party claiming that the new provisions have been violated will have two (2) years from the date of the alleged violation to bring suit, and a prevailing plaintiff will be entitled to any and all of its common law remedies, and shall recover reasonable attorneys’ fees and costs.

It is important to note that these statutory provisions provide for recourse to a court for enforcement of the substantive rights bestowed by the legislation, even if the underlying employment contract or settlement agreement mandate dispute resolution through arbitration. Whether an employment contract waiver of the right to court adjudication for claims arising outside of the new statutory provisions (i.e., mandatory arbitration) will be deemed constitutional is an open question. Lastly, this statute does not address similar confidentiality provisions in non-employment harassment or similar contexts (for example, in the Stormy Daniels situation), and it remains to be seen whether the public policies behind this “sunshine” legislation will, in the future, be applied to those situations as well.

Rick Shulman

Contact Rick at rshulman@pricemeese.com should you have questions about this article.