The #MeToo Movement and Changes to California’s Laws Regarding Confidentiality Provisions in Settlement Agreements

In 2017, the #MeToo movement rocked the national consciousness and ushered in a period of much needed reflection and heightened focus on the wide spread scourge of sexual harassment in the workplace. As more and more brave women from a variety of industries spoke up about their personal experiences, a reoccurring issue arose relating to the use of confidentiality provisions in settlement agreements. These confidentiality provisions silenced victims of gender-based discrimination and sexual harassment. Time and time again, victims who had entered into settlement agreements were precluded from discussing their experiences. A troubling consequence of this was that it allowed repeat offenders with financial resources to buy their victims’ silence and continue to harass and discriminate against other victims without the public or even their colleagues having any knowledge of their past misconduct.

In 2018, the California Legislature responded and passed two laws that limited the scope of confidentiality provisions in settlement agreements. In AB 3109, the Legislature moved to invalidate confidentiality agreements that would act as a gag order to prevent a person from testifying in any judicial proceeding concerning alleged sexual harassment. AB 3109 was approved and codified as California Civil Code section 1670.11, which made any provision in a contract or settlement agreement entered into after January 1, 2019, that purports to waive a person’s right to testify concerning alleged sexual harassment void and unenforceable.

The Legislature took this same concept a step further in relation to SB 820, which was codified as California Code of Civil Procedure section 1001. While AB 3109 addresses contracts generally, SB 820 pertains to settlement agreements related to filed lawsuits and administrative complaints. Effective January 1, 2019, any settlement agreement confidentiality provision that prevents the disclosure of factual information related to an act of sexual harassment, an act of workplace harassment or discrimination based on sex, failure to prevent workplace harassment or discrimination based on sex or retaliation for reporting harassment or discrimination, is void.

Settling employers and defendants routinely insist on confidentiality as a condition of settlement. With these important changes to California law, employers will be unable to block victims of sexual harassment and discrimination based on sex from speaking about the surrounding factual circumstances. By pulling the veil of confidentiality back, employers and harassers will no longer be able to hide behind confidentiality agreements.

Top Secret No Longer. Confidentiality provisions used to silence victims of gender-based discrimination and sexual harassment allowed repeat offenders with financial resources to buy their victims’ silence free to continue to harass and discriminate against other victims secure in the knowledge their past misconduct was confidential.

For California employees and employers, it is important to fully understand these changes before entering into any settlement agreement. From the employer or defendant perspective, it is critical that any confidentiality agreements be drafted in accordance with these new laws to avoid an invalid confidentiality provision that could be severed from the settlement agreement or potentially invalidate the entire agreement. From the employee or victim perspective, it is imperative to have a complete understanding of your rights in relation to what can be disclosed after entering into a confidentiality agreement and what limits on disclosure are invalidated by these recent changes to California law.

-Author Justin C. White is a Super Lawyers Rising Star and associate attorney with the Louderback Law Group