Seyfarth Synopsis: In response to the #MeToo movement, several states have passed legislation aimed at combatting workplace sexual harassment. These legislative measures range from banning non-disclosure provisions and mandatory, pre-dispute arbitration agreements, to requiring employers to provide anti-harassment training and distribute anti-harassment policies and information. Multi-jurisdictional private employers, especially those with employees in California, Connecticut, Delaware, Maine, Maryland, New Jersey, New York, Tennessee, Vermont, and Washington State should be aware of these laws, as they have significant implications for the workplace.

It has been well over a year since #MeToo went viral. In response, several states ushered in sweeping legislative changes in 2018. Generally, these anti-harassment laws appear to be motived by two overarching goals: (1) increasing awareness about inappropriate workplace conduct and (2) ending what many have criticized to be a culture of silence surrounding workplace harassment. In furtherance of these goals, states have taken various approaches to these laws. For instance, some legislators have enacted laws that ban and/or void, under certain circumstances, non-disclosure agreements, mandatory pre-dispute arbitration agreements, and no re-hire provisions insofar as these provisions relate to harassment claims. Other legislators have enacted laws requiring employers to provide anti-harassment training, display posters, and distribute policies and information sheets, while at least one other state has imposed reporting obligations on employers with respect to harassment settlements. As such, while the below provides a brief overview of the new laws, this is not intended to give detailed guidance and private sector employers impacted by these laws should take further steps to ensure they are in compliance.

Non-Disclosure Agreements

State legislatures in California, New Jersey, New York, Tennessee, Vermont, and Washington State have adopted various approaches for curtailing the use of non-disclosure agreements. A high level overview of the laws in these states is set out below.

California - Effective January 1, 2019[1] California passed three laws that, depending on the type of contract at issue, affect the use of non-disclosure provisions.

SB 820 affects agreements settling lawsuits or administrative complaints, and voids contractual provisions that would prevent a party from disclosing “factual information” related to a claim filed in that proceeding if the information is “regarding” sexual assault, sexual harassment, workplace harassment or discrimination based on sex, failure to prevent discrimination or harassment based on sex in the workplace, or retaliation for reporting discrimination or harassment based on sex in the workplace. However, if the claimant requests confidentiality, the parties may agree to prevent the disclosure of “all facts” that would lead to the discovery of the claimant’s identity. Irrespective of preference, the “amount paid” to resolve any complaint may still be kept confidential.

AB 3109 affects all contracts and voids provisions that prevent a party from testifying about alleged criminal conduct or sexual harassment when the party has been compelled or requested to do so by lawful process.

SB 1300 affects agreements for raises, bonuses, or new or continued employment, making it an unlawful employment practice to require an employee “to sign a nondisparagement agreement or other document that denies the employee the right to disclose information about unlawful acts in the workplace, including, but not limited to, sexual harassment.”

For a more detailed analysis of these new California laws, see Seyfarth’s blog post here.

New Jersey - Effective March 18, 2019 New Jersey’s S.B. 121, provides that a “provision in any employment contract or settlement agreement which has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment” is against public policy and will be unenforceable against a current or former employee who is a party to the settlement or contract. The law permits an employee to enforce a non-disclosure provision in a settlement agreement against the employer, unless the employee “publicly reveals sufficient details of the claim so that the employer is reasonably identifiable.” For a more thorough discussion of this New Jersey law, see Seyfarth’s prior alerts here and here. Notably, New Jersey’s law is significantly broader than other states’ laws as it affects all claims of discrimination, retaliation or harassment — not just sexual harassment.

New York - Effective July 11, 2018 In New York, employers may not include non-disclosure provisions in settlement agreements resolving claims of sexual harassment, unless confidentiality is requested by the complainant. It is still permissible, however, to include a non-disclosure provision that prohibits disclosure of the settlement amount. If the complainant requests confidentiality, the terms of the confidentiality provision must first be provided to all parties in one, standalone agreement. The complainant then has 21 days to consider the terms (this consideration period cannot be waived or shortened), after which the confidentiality provision must be memorialized in the settlement agreement. The complainant then has 7 days to revoke the settlement agreement.

Tennessee - Effective May 15, 2018 Tennessee’s law provides that an employer shall not require an employee or prospective employee to execute or renew a non-disclosure agreement with respect to sexual harassment in the workplace as a condition of employment. This law does not affect settlement agreements.

Vermont - Effective July 1, 2018 Vermont enacted H. 707, prohibiting employers from requiring any employee or prospective employee, as a condition of employment, to sign an agreement or waiver that prohibits, prevents, or restricts the employee or prospective employee from opposing, disclosing, reporting, or participating in an investigation of sexual harassment. Additionally, the law requires that certain language be included in agreements to settle a sexual harassment claim.

Washington State - Effective June 7, 2018 Washington State passed S.B. 5996, which prohibits employers from requiring employees to “sign a nondisclosure agreement, waiver, or other document that prevents the employee from disclosing sexual harassment or sexual assault occurring in the workplace” as a condition of employment. Any such restriction is void and unenforceable. The law does not prohibit confidentiality provisions in settlement agreements.

Mandatory, Pre-Dispute Arbitration Provisions & Waivers of Other Substantive and Procedural Rights

Maryland, New Jersey, New York, Vermont, and Washington State have passed legislation that prohibits employers from requiring employees to waive certain substantive and procedural rights and remedies as a condition of employment. These prohibited waivers generally include mandatory, pre-dispute arbitration agreements, class action waivers, and jury trial waivers. While these laws are likely preempted by the Federal Arbitration Act, as discussed in more detail here, employers should be aware of them.

Maryland’s Disclosing Sexual Harassment in the Workplace Act, effective October 1, 2018 (and set to expire absent legislative action on June 30, 2023) provides that “any provision in an employment contract, policy, or agreement” that waives any “substantive or procedural right or remedy to a claim that accrues in the future of sexual harassment or retaliation for reporting or asserting a right or remedy based on sexual harassment” is null and void. Additionally, employers who attempt to enforce such a provision will be liable for the employee’s reasonable attorneys’ fees and costs.

New Jersey’s S.B. 121 makes provisions in employment contracts unenforceable that “waive[] any substantive or procedural right or remedy” relating to a claim of discrimination, retaliation, or harassment. The legislation also creates a private right of action for employees who claim to be aggrieved by such a provision, and entitles a successful plaintiff to attorneys’ fees and costs.

New York’s legislation prohibits employers from including in contracts with employees provisions that mandate pre-dispute arbitration of claims of sexual harassment. The law also declares null and void clauses in existing contracts that mandate arbitration of sexual harassment claims.

Vermont’s legislation prohibits employers from requiring any employee or prospective employee, as a condition of employment, to sign an agreement or waiver that “purports to waive a substantive or procedural right or remedy available to the employee with respect to a claim of sexual harassment.” Any such provision will be void and unenforceable.

Washington State’s law, SS B 6313, provides that a provision of an employment agreement is void and unenforceable “if it requires an employee to waive the employee’s right to publicly pursue a cause of action arising under [Washington State Human Rights laws] or federal antidiscrimination laws or to publicly file a complaint with the appropriate state or federal agencies, or if it requires an employee to resolve claims of discrimination in a dispute resolution process that is confidential.” Notably, and similar to New Jersey, this law applies to all claims of discrimination, not just sexual harassment.

No-Rehire Provisions

So far, Vermont is the only state that has enacted legislation prohibiting employers from inserting no re-hire provisions in settlement agreements resolving claims of sexual harassment.

Training

California, Connecticut,[2] and Maine have required training for some time, but both California and Maine updated their training laws in 2018. New York State, New York City, and Delaware passed new legislation in 2018.

California While California has required certain employers to conduct interactive anti-sexual harassment training since 2005, in 2018, California passed S.B. 1343, and significantly amended its training requirements. Now, employers with 5 or more employees are required to provide at least 2 hours of interactive sexual harassment prevention training to all supervisory employees and at least 1 hour of such training to all non-supervisory employees, by January 1, 2020. Training must be provided once every 2 years thereafter.

Delaware In August 2018, H.B. 360 was passed, and it went into effect on January 1, 2019. Pursuant to the law, Delaware employers with 50 or more employees must provide interactive sexual harassment training to all employees. New employees must receive training within one year of hire, and current employees must receive training by January 1, 2020. Training must be repeated every two years.

Maine Since 1991, Maine has required that employers with 15 or more employees provide anti-sexual harassment training to new employees within 1 year of hire. In 2018, Maine updated its law to require employers use a checklist prepared by the Maine Department of Labor to develop their sexual harassment training programs. The checklist is a 1-page narrative defining sexual harassment and summarizing the substantive topics that each training must cover.

New York State and New York City Pursuant to Labor Law Section 201-g, all employers in New York State must provide annual, interactive sexual harassment prevention training to all employees. Employers have until October 8, 2019 to complete the first year of training. The State has prescribed certain minimum substantive requirements that each training must meet.

In May 2018, New York City amended its Administrative Code to require all employers with 15 or more employees provide annual, interactive, anti-sexual harassment training to all employees. New York City also requires training for independent contractors who have performed work in furtherance of the business for more than 90 days and more than 80 hours in a calendar year. New York City’s law takes effect on April 1, 2019. For more detail about the New York State and City legislation, please refer to our prior alerts here and here.

Written Notice and Policy Requirements

In addition to imposing training requirements, lawmakers in Delaware, New York State, and New York City have also passed legislation requiring that employers distribute to employees a sexual harassment information sheet or policy, or display a sexual harassment poster in the workplace.

As of January 1, 2019, Delaware employers must distribute a sexual harassment notice to new employees at the commencement of employment and to current employees by July 1, 2019.

Effective October 9, 2018, pursuant to Labor Law Section 201-G, all New York State employers must provide employees with a sexual harassment prevention policy and a complaint form. The State has prescribed minimum standards for the policy, and published a model policy and complaint form on its website.

As of September 6, 2018, all New York City employers must conspicuously post a sexual harassment prevention poster (in English and Spanish) in employee common areas and distribute to new employees a sexual harassment prevention information sheet (in English or Spanish, depending on the employees preference).

Other states, including California, Maine, Massachusetts, and Vermont, already had some sort of written notice requirement in place. California employers have been required to provide employees with a discrimination, harassment, and retaliation policy. This is in addition to the distribution of the Department of Fair Employment and Housing’s brochure on sexual harassment. Maine requires all employers to post a sexual harassment poster and provide annual, written notice to employees. Massachusetts requires employers with 6 or more employees to adopt a written policy against sexual harassment (the State’s model policy is available here). Vermont requires all employers to display a poster and distribute a policy against sexual harassment (Vermont has published a model policy).

Reporting Obligations & Expanded Government Oversight

Maryland’s recently-enacted Disclosing Sexual Harassment in the Workplace Act requires employers with 50 or more employees to submit a survey to the Maryland Commission on Human Rights on or before July 1, 2020 and again on or before July 1, 2022. The survey must report: (1) the number of settlements made after an allegation of sexual harassment; (2) the number of times the employer paid settlements in reference to sexual harassment claims made against the same employee over the last 10 years; and (3) the number of sexual harassment settlements that contained non-disclosure provisions. The Commission will publish the aggregate results of the surveys on its website and submit an executive summary to the Governor.

Vermont’s new law authorizes the Vermont Attorney General to enter and inspect any place of business or employment, question any person who is authorized by the employer to receive or investigate complaints of sexual harassment, and examine an employer’s records, policies, procedures, and training materials related to the prevention of sexual harassment. The Attorney General, as a result of his investigation, may require the employer to provide annual training to all employees and/or to conduct an annual, anonymous working-climate survey.

Employer Takeaway

Employers with employees in any of these jurisdictions should be aware of these new laws and ensure that they are in full compliance. Seyfarth attorneys are available to advise employers on any aspect of these laws.