Washington State's New Law on NDAs and Settlement Agreements
On March 24, 2022, Washington State Governor Jay Inslee signed into law the “Silenced No More Act,” which becomes effective June 9, 2022 (“Effective Date”). The Act prohibits agreements containing non-disclosure and non-disparagement provisions that restrict applicants, employees, and independent contractors from openly discussing conduct or a legal settlement involving conduct that the applicant, employee, or contractor “reasonably believed” was illegal discrimination, harassment, retaliation, a wage and hour violation, a sexual assault, or conduct that is “against a clear mandate of public policy.” This new law does not prohibit an employer from keeping confidential the amount paid in the settlement of any claim, nor does it prohibit employers from protecting trade secrets, proprietary information, or confidential information that does not involve illegal conduct.
The Act’s prohibition is retroactive and invalidates non-disclosure and non-disparagement provisions in employment agreements created before the Effective Date that otherwise violate the Act. This retroactive application, however, does not void similar provisions found in settlement agreements. Additionally, employers who violate this new law can be subject to statutory damages of $10,000 or actual damages, whichever is greater.
While the Act only applies to applicants and workers in Washington State, employers should be aware of the limits of the new law and rethink their existing employment agreements. The Act makes it illegal for an employer to request an employee to sign a prohibited contract or attempt to enforce a non-compliant agreement. Therefore, employers should exercise caution before discussing such agreements and obligations in the hiring process, company policies, or at the separation of employment. On the Effective Date, employers will be barred from requesting that workers sign blanket non-disclosure and non-disparagement agreements. Moving forward, the language of confidentiality agreements must be specifically tailored to fit the narrow contours of the Silenced No More Act.
If you have any questions regarding the issues discussed in this Alert, please contact the authors, Jillian Skinner, an attorney in our Orlando office at jskinner@fordharrison.com, and Jeff Mokotoff, a partner in our Atlanta office, at jmokotoff@fordharrison.com. Of course, you can also contact the FordHarrison attorney with whom you usually work.
