For years, employers have insisted that confidentiality and nondisparagement agreements be included in settlement agreements in a variety of employment disputes, such as discrimination, harassment, wage and hour, and others.
The reasoning is straightforward enough: Companies want to protect their reputations, and confidentiality/nondisparagement provisions in settlement agreements have been a way to ensure that unhappy employees do not continue to make disparaging statements about their current or former employers after the parties’ disputes have resolved. However, these provisions became particularly controversial in the wake of the #metoo era, when employees alleged these agreements acted as a manner of silencing employees from disclosing gender discrimination and harassment.
In 2018, the Washington Legislature passed a law, codified as RCW 49.44.210, that prohibited nondisclosure agreements, waivers or other documents preventing employees from disclosing sexual harassment or sexual assault. The law did not, however, prohibit settlement agreements from containing confidentiality provisions. That is no longer the case.
Effective June 9, the Washington Legislature rescinded the 2018 law in favor of a far stricter restriction on confidentiality and nondisparagement agreements. The new law prohibits any agreement, including any settlement agreement, that bars employees from discussing almost any unlawful employment activity, not just sexual harassment or sexual assault. Specifically, the new law bars any 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.”
The new law has a stiff penalty, allowing employees to bring a cause of action for actual or statutory damages of $10,000, whichever is greater, plus reasonable attorneys’ fees and costs. Employers should be particularly cautious, as even requesting employees to sign such agreements (or requiring them to do so) is a violation of the statute.