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California Bans Workplace Harassment, Discrimination NDAs

The law affecting nondisclosure agreements also prevents employers from offering severance agreements that block displaced workers from talking about unlawful acts in the workplace. The law goes into effect on Jan. 1, 2022.

(TNS) — Gov. Gavin Newsom signed a law last Thursday, Oct. 7, 2021, that aims to block California companies from using nondisclosure settlement agreements to silence workers on workplace harassment and discrimination cases.

The law also prevents, with few exceptions, employers from offering severance agreements that block the displaced workers from talking about unlawful acts in the workplace. Employers were already prevented from doing so for their current employees under Senate Bill 1300 in 2018, but not for those who are leaving their job.

"The California State Legislature and Gov. Newsom have now spoken: California workers should absolutely be able to speak out—if they so wish—when they are a victim of any type of harassment or discrimination in the workplace," said Sen. Connie Leyva, D- Chino, who wrote the law.

The law, which goes into effect Jan. 1, is among the broadest efforts in the United States to restrict how employers can use nondisclosure and severance agreements. Senate Bill 331 Levya expands on her 2018 law — sparked by the #MeToo movement — that has prevented such agreements to be used in cases of sexual harassment or discrimination.

Levya introduced the bill after a prominent case involving two Black female former Pinterest public policy officials, who left the tech firm and tweeted about the racial discrimination they faced at the company. Because they had signed non-disclosure agreements with Pinterest when they left the company, they faced legal consequences for speaking out.

Pinterest relented, ultimately saying it supports Levya's bill. But the issue isn't just limited to workers at prominent tech firms, said Ifeoma Ozoma, one of the former Pinterest workers and an advocate for Levya's bill.

"Whether you are a nanny for a celebrity... or a tech employee, it covers everyone," Ozoma said of Levya's bill.

Even low-wage workers, such as those working in warehouses, have been pushed to sign nondisclosure agreements to receive severance. For many workers who live paycheck to paycheck, not signing such agreements could mean not having the money to feed their families in the next days and weeks, Ozoma said.

Business organizations such as the California Chamber of Commerce had initially opposed the law, saying it would make it less likely for companies to offer severance payments to workers. However, they dropped their opposition after the law was revised in several ways, such as allowing companies to keep confidential the amount of severance agreements paid to workers.

Ozoma said Levya's bill could become a template for other states and even other countries. The law, Ozoma noted, does not apply to her because she now lives in New Mexico.

"But what it means is that no one else who is in a situation like I was in, where you are working so hard for a company for something you believe in while being attacked and harassed, has to keep silent about it or make the calculation I made," Ozoma said.

(c)2021 The Sacramento Bee (Sacramento, Calif.) Distributed by Tribune Content Agency, LLC.

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