Since certain amendments in 2019, it has been widely recognized that (N.J.S.A. 10:5-12.8) prohibits non-disclosure provisions in employment agreements or employee settlement agreements if those provisions 鈥渉a[ve] the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment鈥� that could be disclosed by the current or former employee.聽

What was slightly less apparent until recently was whether other restrictive contractual clauses labeled as 鈥渘on-disparagement鈥� provisions are enforceable, even if they have a similar effect on an employee鈥檚 permitted speech. 

This precise issue was examined and determined resoundingly in May 2024 by the New Jersey Supreme Court in the . This case involved a former police sergeant鈥檚 (Christine Savage) sexual harassment, discrimination, and retaliation claims against the Neptune Township police department. In settling these claims, the parties鈥� agreement included a broad but generic non-disparagement clause.聽

Shortly after settlement, Ms. Savage gave a television news interview during which she stated, among other things, that the defendants had 鈥渁bused [her] for eight years.鈥� The defendants then moved to enforce the agreement on the ground that Ms. Savage鈥檚 statements violated her non-disparagement clause. Ms. Savage disagreed with the defendants鈥� reading of the agreement in this regard, asserting instead that the non-disparagement clause was unenforceable under N.J.S.A. 10:5-12.8. 

Finding in Ms. Savage鈥檚 favor, the New Jersey Supreme Court held, unanimously, that any contractual provision that curtails an employee鈥檚 ability to speak about the details of their discrimination, retaliation, or harassment claim, whether or not labeled as a non-disclosure clause, violates the broad prohibitions of N.J.S.A. 10:5-12.8. 

In reaching this determination, the Court focused on the plain language of the statute that bars 鈥渁 provision鈥hich has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment (hereinafter referred to as a 鈥榥on-disclosure鈥� provision).鈥� Noting that the law鈥檚 鈥渃ritical language鈥� does not tether the statute鈥檚 restrictions to a particular type of contractual clause, the Court observed that the invocation of a 鈥渘on-disclosure provision鈥� in the law is nothing more than a shorthand reference informed only by the definition proffered in the statute itself. Thus, it covers all contractual restrictions that may limit an employee鈥檚 ability to speak freely about their claims, whether the clause is labeled as a non-disclosure provision or otherwise. 

The Court also pointed out that the law鈥檚 legislative history reflects that the primary purpose of N.J.S.A. 10:5-12.8 was to stop discriminatory and harassing conduct by ensuring that victims could discuss their claims even if they settle them. Therefore, any contractual limitation on that ability violates the intent of the law. Finally, the court also held that the attempt to salvage a prohibited non-disparagement clause by carving out statements by the employee 鈥渞elated to other proceedings including lawsuits鈥� is futile. Specifically, the Supreme Court stated 鈥淸s]urvivors of discrimination and harassment have the right to speak about their experiences in any number of ways, and they can no longer be restrained by confidentiality provisions in employment contracts or settlement agreements.鈥� Thus, is it insufficient merely to allow an employee to speak about their claims in other proceedings. They must be permitted to speak about them in all 蹿辞谤耻尘蝉.听

In the wake of the Savage decision, employers in New Jersey should review their standard employment and settlement agreements to make sure that there are no non-disclosure obligations hidden in other clauses. In particular, they should consider their non-disparagement provisions to make sure that they do not inadvertently curtail speech that is protected by N.J.S.A. 10:5-12.8. Moreover, as New Jersey鈥檚 law is not unique, and there is an ever-growing list of states with some restriction on non-disclosure and non-disparagement clauses, employers across the country should consider and be ready to confront these same issues.聽

New York governor Kathleen Hochul recently signed into law , which amended General Obligations Law Section 5-336 (鈥淕OL 5-336鈥�). The amendments expanded restrictions on the use of nondisclosure provisions (鈥淣DAs鈥�) in certain workplace settlement agreements. 

These amendments, which took effect on November 17, 2023, apply to all agreements entered into after that date. 

GOL 5-336, one of the country鈥檚 first #metoo statutes, originally prohibited employers from requiring confidentiality of underlying facts in sexual harassment settlement agreements unless, after a 21-day waiting period, confidentiality was the preference of the employee making the complaint. Over the years, the New York Legislature has amended the statute to expand its protections. These latest amendments include five notable changes:

1. Whereas the previous restrictions only applied to claims of unlawful discrimination, the restrictions regarding the use of nondisclosure provisions now apply to settlements, agreements, and other resolutions involving claims of harassment or retaliation in violation of laws prohibiting discrimination.
2. Settlements, agreements, and other resolutions involving claims of unlawful discrimination, including discriminatory harassment or retaliation, may not include provisions that require a complainant to:
   • make an affirmative statement, assertion, or disclaimer that the complainant was not subject to unlawful discrimination;
   • pay liquidated damages for violation of nondisclosure or nondisparagement clause; or
   • forfeit all or part of the consideration for the agreement for violation of a nondisclosure clause or nondisparagement clause.
3. While complainants still have up to 21 days to consider the inclusion of a confidentiality provision in a pre-litigation settlement agreement, that consideration period is now waivable. It is important to note that Section 5003-B of the New York Civil Practice Law & Rules, which requires employees to wait the full 21 days before signing an agreement containing a nondisclosure provision, still governs settlement agreements related to discrimination claims that have been filed in court.  
4. GOL 5-336 now applies to independent contractors in addition to employees and potential employees.
5. A settling complainant must be notified that they are not prohibited from speaking to the New York Attorney General.

Employers in New York State should review agreements entered into after November 17, 2023, to confirm the enforceability of those agreements and compliance with S4516.