September 27, 2022
What Is The Silenced No More Act?
For many years, confidentiality and non-disparagement clauses have been common in employment-related agreements, including, among other things, employment contracts signed at the commencement of employment along with termination or severance agreements concluding such employment. Typically, these clauses worked to limit what the employee or former employee could say with respect to working conditions and conduct observed or experienced during the course of their employment.
However, in more recent years, these types of clauses have come under increasing scrutiny, particularly in the wake of revelations about abuses of power in the form of sexual harassment and other sexual misconduct in the workplace, which often went unreported at least in part due to use of non-disparagement and confidentiality clauses.
California state law implemented in 2022, however, addresses some of the perceived imbalances between employers and employees related to such controversial clauses by limiting the ability of employers to employ or enforce them. The “Silenced No More Act”, implemented on January 1, 2022, as California Senate Bill 331, prevents employers from placing certain restrictions on employees relating to harassment, discrimination, and retaliation conduct that is prohibited by California’s Fair Employment and Housing Act (FEHA), California’s primary civil rights law relating to employment.
What Does the Silenced No More Act Prohibit?
Pursuant to the Silenced No More Act, employers are prohibited from entering into certain contracts with employees that prevent the employee from discussing illegal acts in the workplace relating to prohibited sexual assault, sexual harassment, workplace discrimination, workplace discrimination, or retaliation against an employee.
According to the Silenced No More Act legislative record, “FEHA makes it an unlawful employment practice for an employer, in exchange for a raise or bonus, or as a condition of employment or continued employment, to require an employee to sign a nondisparagement agreement or other document that purports to deny the employee the right to disclose information about unlawful acts in the workplace, including, but not limited to, sexual harassment or discrimination.”
The legislative record goes on to clarify that the Silenced No More Act prohibits an employer from requiring an employee to sign a nondisparagement agreement or other document to the extent it has the purpose or effect of denying the employee the right to disclose information about those acts. Under this new law, it is, therefore, an “unlawful employment practice for an employer or former employer to include in any agreement related to an employee’s separation from employment any provision that prohibits the disclosure of information about unlawful acts in the workplace.”
Specifically, pursuant to the express language of the Silenced No More Act, a nondisparagement or other contractual provision that restricts an employee’s ability to disclose information related to conditions in the workplace shall include, in substantial form, the following language: “Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.”
The law does not apply to confidentiality clauses relating to information regarding legal acts in the workplace, for example, a clause preventing an employee from discussing certain business strategies and other trade secrets relating to the employer’s business.
Notably, the law makes an exception for negotiated settlement agreements related to resolving pending litigation, for example, litigation pursued by an employee against a former employer relating to acts in the workplace where the employer enters into a settlement agreement with the employee involving financial compensation to the employee and an obligation on the part of the employee not to discuss the underlying acts at issue.
Key Takeaways From the Silenced No More Act for Whistleblowers
Whistleblowers who come forward with knowledge of illegal acts by an employer – whether a current or former employer – play a key role in preventing unfair competition, consumer fraud, and fraud perpetrated on taxpayers, among other things.
Furthermore, under certain state and federal whistleblower statutes – including the federal False Claims Act (FCA), the California False Claims Act (CFCA), and the Dodd-Frank Wall Street Reform and Consumer Protection Act (the SEC Whistleblower statute) – individuals who come forward with actionable evidence of illegal acts by a current or former employer may be eligible for a significant financial reward for their efforts in doing so.
Those individuals who are considering becoming whistleblowers can often feel concerned about potential negative consequences of doing so, such as termination of employment or being held liable for violating a confidentiality clause or non-disparagement claim signed with an employer. What the Silenced No More Act makes clear is that when whistleblowers come forward with evidence of the types of illegal conduct that form the basis of the aforementioned statutes – which relate to illegal conduct such as Medicare and Medicaid fraud, customs fraud, military and defense procurement fraud, contractor fraud, and securities law violations, among other things – cannot be prevented from doing so by an employment agreement, severance agreement, or termination agreement.