#MeToo Inspired Legislation Bans Settlement Provisions that Silence and Punish Those Who Stand Up Against Sexual Harassment and Gender Discrimination

“Work is about more than earning an income. For many, a job can provide a sense of purpose and belonging – the satisfaction of knowing your labor provides value to the world. Everyone should have the ability to feel that pride in what they do, but for too many workers, they aren’t provided the dignity, respect or safety they deserve. These laws will help change that.” -Governor Gavin Newsom

Recently, Governor Newsom and former Governor Jerry Brown signed into law legislation that has significantly improved workplace protections for California workers.  In particular, the #MeToo Movement [1] has inspired legislation that seeks to remedy the societal culture of silencing and punishing targets of sexual harassment and assault who have the temerity to seek justice for the harms caused to them.

Ban on Secret Settlements of Sexual Harassment Claims

This past year, Governor Brown signed Senate Bill 820 which created Code of Civil Procedure §1001.  This law bans Non-Disclosure Agreements (NDA’s) or “gag” provisions in settlement agreements entered into after January 1, 2019, involving claims of sexual harassment, gender discrimination, or retaliation.

Lawmakers and workers’ rights organizations working with lawmakers recognize that NDAs enable and perpetuate sexual misconduct, by preventing victims from speaking their truth against the perpetrators or defending themselves against ridicule and distrust.  Permitting victims to compelled gag provisions in settlement agreements harms the public.  Hush agreements prevent potential new victims from being warned of the danger posed by the perpetrator.  Silence enables the Weinsteins of the world.  In this #MeToo era, compelled silence is unacceptable.

The ban on confidentiality of factual information applies only to cases filed in court or with the Department of Fair Employment and Housing (DFEH). If neither a lawsuit nor a DFEH complaint has been filed, parties are still free to enter into confidentiality agreements with regard to these claims.  This ban gives women and targets of sexual harassment control over whether or not sensitive subject-matters are kept confidential.  Further, the parties are always permitted to keep the settlement amount confidential.

During the drafting phase of SB 820, the business community and defense bar warned that the ability to settle sexual harassment cases would be stifled if confidentiality provisions were banned.  However, since enactment of SB 820, there is no evidence that any settlements have not occurred due to this new law.  Defense attorneys and their clients have simply adjusted to the ban by either reaching settlements before claims have been filed in court or with the DFEH or resolving cases as they would when they realize that exposure to liability is great. Perpetrators now know they can no longer hide in the shadows, continuing to abuse unsuspecting women, safe in the thought that their past victims can never expose them.

Ban on “No Rehire” Provisions in Settlement Agreements of Harassment/Discrimination Claims.

Assembly Bill 749 bans “No Rehire” clauses in settlement agreements that restrict employment opportunities for women and workers who bring claims of discrimination,  harassment, or other employment disputes.

Like gag-provisions in settlement agreements, a “no-rehire” clause serves to further punish workers for bringing forth harassment or discrimination claims against their employer.  Survivors of sexual harassment or discrimination should not be required to forfeit their jobs or be prohibited from working for a company or its affiliates and related entities, simply because she/he sued the employer.  These “no rehire” provisions are often considered “standard” provisions of a settlement agreement despite the oppressive and retaliatory consequence. In fact, the long-standing policy of the Equal Employment Opportunity Commission is to refuse to include no-rehire provisions in its settlement agreements, which are viewed as retaliatory.

Use of expansive, overreaching provisions which expand the no-hire provisions to “affiliates or related entities” often prevent the harmed employee from ever working at the company, or affiliations that result from purchases or acquisitions. Some provisions require the plaintiff’s subsequent resignation years later if the new employer is purchased or acquired by the entity with whom the employee signed the no-hire provision.  Arguably, these provisions constitute illegal non-compete clauses, which violate public policy and are unenforceable.  “No rehire” provisions can effectively bar a plaintiff from an industry.  For employees who work for the State or some other public agency, no-rehire provisions can effectively preclude an employee from receiving pension and other employment benefits.

The defense bar argued that “no rehire” provisions serve to protect the employer from a subsequent retaliation lawsuit in the event the former employee tries to apply for a job and does not get hired  However, AB 749 does not require an employer to hire the former employee.  If the employer has a legitimate non-discriminatory basis for not hiring that employee, it still maintains the right not to hire.  A retaliation claim could not survive if an employer had a legitimate non-discriminatory reason to deny that candidate a job.

Forced Arbitration

Consistent with the logic of removing the cloak of secrecy from sexual harassment claims, forced arbitration should be prohibited.  Forcing employees into arbitration, a confidential process, forces an employee into secrecy and serves to hide a defendant(s) wrongdoing from public scrutiny and accountability.

AB 51, as signed by Governor Newsom, prohibits employers from forcing employees to waive their rights under FEHA or the Labor Code, as a condition of employment.  It also prohibits employers from discriminating or retaliating against a worker who refuses to sign an arbitration agreement.

Extending Exhaustion Deadline for Fair Employment and Housing Act Claims.

Governor Newsom signed AB 9 which extends the exhaustion deadline for filing harassment, discrimination, and other FEHA violations with the Department of Fair Employment and Housing, from one year to three years.

Targets of sexual harassment and assault do not report, or delay reporting incidents for many complex reasons.  The reasons include guilt, self-doubt, fear of retaliation and blame, humiliation, shock from the incident, or unfamiliarity with the law or the company policies regarding reporting procedures.  Now that the #MeToo movement has emboldened women to come forward, they find that their deadline to exhaust their administrative remedies with the DFEH has lapsed. Extending the statute of limitations on filing workplace harassment claims will give individuals time to fortify themselves with the emotional and legal help they need for seeking justice.

Conclusion  

These laws and legislation that are currently being drafted will prevent and reduce harassment, hold harassers and the companies that enable them accountable, and make it easier for survivors to get the justice and healing they deserve.

Toni Jaramilla is an employment lawyer and exclusively represents workers.  She is a past Chair of the California Employment Lawyers Association (CELA). With CELA leaders, she has been actively working on MeToo inspired legislation at the Capitol. This year, she and her client testified in support of AB 9 and helped draft and lobbied for the passing of AB 749 among other worker protection bills.

[1] The Me Too movement began well before (hashtag) #MeToo appeared on social media in 2017 when accusations of sexual harassment and assault were leveled against Hollywood producer Harvey Weinstein.   Tarana Burke is an African American civil rights activist.  She was recently named as one of the “Silence Breakers” by Time magazine and she created the Me Too campaign in 2007.  Its inception began even earlier in 1997 during Ms. Burke’s work with children of color from broken homes who were suffering through sexual abuse and violence.