On September 30, 2018, California Governor Jerry Brown signed SB 820, prohibiting non-disclosure provisions in some settlement agreements related to claims of sexual assault, sexual harassment, and discrimination based on sex.
The bill, which was introduced by Senator Connie M. Leyva, adds Section 1001 to the California Code of Civil Procedure, and specifically prohibits non-disclosure provisions in settlement agreements that prevent the “disclosure of factual information related to a claim filed in a civil action or a complaint filed in an administrative action” regarding:
- An act of sexual assault that is not governed by subdivision (a) of Section 1002;
- An act of sexual harassment as defined in Section 51.9 of the Civil Code;
- An act of workplace harassment or discrimination based on sex;
- The failure to prevent an act of workplace harassment or discrimination based on sex; or
- An act of retaliation against a person for reporting harassment or discrimination based on sex.
Section 1002 of the California Code of Civil Procedure prohibits non-disclosure provisions in settlement agreements that prevent the disclosure of information related to civil actions regarding certain enumerated sexual offenses, including felony sex offenses, childhood sexual abuse, sexual exploitation of minors, and sexual assault.
The law includes some limited exceptions, which allow employers to enter into narrow non-disclosure agreements in order to (1) prevent disclosure of amounts paid in settlement of a claim, or (2) shield the identity of a claimant (at the claimant’s request). The latter exception is not applicable where a government agency or public official is a party to the settlement agreement.
Notably, the plain language of Section 1001 prohibits non-disclosure provisions where the facts are “related to a claim filed in a civil action or a complaint filed in an administrative action” (emphasis added), leaving open the possibility that the law only applies to agreements where a lawsuit or administrative action has already been filed. However, until more guidance is issued, California employers should exercise care in using such provisions even where the settlement agreement seeks to resolve only pre-litigation and pre-administrative claims.
The prohibitions outlined in new Section 1001 apply to both private and public employers, and will apply to settlement agreements entered into on or after January 1, 2019. California employers who have questions regarding compliance should consult with Employers Council’s California legal services group at CAInfo@EmployersCouncil.org.