What You Need to Know About Nondisclosure Agreements and Sexual Harassment
According to California law, sexual harassment includes unwanted sexual advances or other sexual conduct based on an employee’s sex that creates an unsafe work environment. Here’s everything you need to know about nondisclosure agreements and sexual harassment in California.
Contrary to popular belief, sexual harassment conduct does not have to be motivated by sexual desire, but it can also be motivated by other factors including (but not limited to) an employee’s sex, pregnancy status, gender identity or expression (actual or perceived), and sexual orientation (actual or perceived).
Related: How to File a Sexual Harassment Complaint in California
Nondisclosure Agreements: When can they be signed?
According to California Government Code Section 12964.5, employers cannot require employees to sign away any of their rights under the Fair Employment and Housing Act (FEHA). This includes their right to not be discriminated against for any of the protected categories listed in FEHA, and their protection against retaliation, including for reporting sexual harassment or assault in the workplace. Employers also cannot sign any non-disparagement document or document with a non-disparagement clause regarding an employee’s right to report any unlawful acts that occur in the workplace, including sexual harassment.
Exceptions
A keyword in the code is “require.” This law does not apply to settlement agreements that are negotiated between the employee and employer in order to resolve a claim (either in court or through an administrative process). The word “negotiated” is defined in the code as “voluntary, deliberate, and informed” on the part of the employee. The employee must be aware of the agreement and given the opportunity to be represented by an attorney.
What Facts Can be Disclosed?
However, there are still distinctions to be made in terms of what can remain confidential in a negotiated agreement. According to California Code of Civil Procedure Section 1001, all settlement agreements negotiated in court or with a California administrative agency regarding sexual harassment or assault in the workplace, discrimination based on sex in the workplace, or an act of retaliation due to an employer reporting either of those, cannot include nondisclosure provisions unless they are specifically in place to protect the identity of the claimant (the individual filing the claim). The relevant California administrative agencies would be the Department of Fair Employment and Housing or the United States Equal Employment Opportunity Commission.
All facts related to the case that are not related to the identity of the claimant cannot be protected from disclosure in the settlement agreements. Facts that can be included in nondisclosure provisions include:
- Any pleadings filed in court (documents stating the plaintiff’s complaint, the defendant’s response or counter-claim, and the specificities of the case)
- Any facts involving the identity of the claimant (as stated above), and
- The amount paid in the settlement.
A further exception to this rule is that the identity of the claimant cannot be protected if one of the involved parties is a government agency or public official.
Testifying to Sexual Harassment Claims
According to California Civil Code Section 1670.11, employee contracts or settlement agreements cannot include any provisions relinquishing an individual’s right to testify in any type of proceeding regarding sexual harassment or assault allegations when such testimony is subpoenaed or requested by a California court, legislature, or administrative agency. In other words, an individual cannot waive their right to testify to sexual harassment conduct in any sort of court settlement agreement.
Pre-Litigation Settlements
There are other ways of settling sexual harassment claims, such as pre-litigation mediation. In pre-litigation mediation, trained mediators or attorneys attempt to settle disputes or claims without filing a lawsuit. In cases that are settled pre-litigation, confidentiality provisions are still allowed (so long as they are agreed to by both parties in the settlement).
This exception incentivizes employers to mediate pre-litigation, as they often wish to avoid the negative publicity that can result from sexual harassment claims.
Tax Deductions for Sexual Harassment Settlements
A tax deduction is an expense that a taxpayer pays during the year that can be subtracted from their gross taxable income. Having less taxable income means that the taxpayer is liable to pay less in taxes and as such, tax deductions are appealing to employers.
Under the Tax Cuts and Jobs Act, it is illegal for employers to receive tax deductions for sexual harassment or abuse payments that are negotiated under nondisclosure agreements. This law forces employers to choose between settling sexual harassment cases confidentially and receiving tax deductions for the settlement. This incentivizes employers to negotiate settlements without nondisclosure agreements.
Contact Us
If you have any more questions about nondisclosure agreements and sexual harassment in California, contact us. We’ll match you with the right lawyer to help you file a sexual harassment complaint. Get your free consultation with one of our Workplace Sexual Harassment Attorneys in California today!