SB 331 Would End Secret Settlements

SB 311 would ban employers from using nondisclosure agreements and secret settlements—as part of a severance agreement—to prevent workers from speaking out about alleged acts of illegal harassment and discrimination based on race, religion, gender identity, or ancestry.  

Also known as the “Silenced No More Act,” this bill was introduced in February 2021 and builds on a law passed in 2018 (SB 820), which specifically bans confidentially clauses in settlements in cases of sexual harassment, sexual discrimination, and sexual assault since secret settlements inherently preserved hostile work environments by hiding complaints from the public. SB 311 also expands on SB 1300, which was also passed in 2018 and makes it unlawful for employers to require workers to sign confidentiality and non-disparagement agreements to prevent them from disclosing information about unlawful workplace activities, as a condition of employment or continued employment, or in exchange for a bonus or raise. 

Nondisclosure agreements have been used by powerful tech companies—which are mainly based in California—and other industries. SB 311 would allow employees to come forward with allegations and prevent repeat offenders from harassing, discriminating, or retaliating against others. Furthermore, the bill would enable workers to disclose their experiences with loved ones and not release information to the public, an action that is prohibited by many of these agreements. 

The need for SB 331 can be summed up in a case involving two African American women who accused their company of racial discrimination for facing racist comments from their manager, being underpaid, and being subject to retaliation. Although the women ended up settling their claims and were protected by SB 208 for only their gender-based claims. Therefore, they can only disclose information regarding gender discrimination, as opposed to racial discrimination, which would be covered by SB 311. 

Supporters of the bill say secret settlements preserve workplace harassment and discrimination by preventing survivors from disclosing such acts to the public. On the other hand, those who oppose say that severance agreements protect employers against potential reputational harm. 

Gov. Gavin Newsom has until October 10 to sign or veto this bill. 

If you are dealing with an employment law issue in California, contact Polaris Law Group today at (888) 796-4010 for more information about our experienced legal services. Serving clients in Redding, Sacramento, Santa Rosa, Oakland, San Francisco, the Bay Area, Stockton & Modesto, Pleasanton, Redwood City, San Jose, the Silicon Valley, Hollister, Salinas, Fresno, Bakersfield, Santa Barbara, Oxnard, Santa Clarita, Riverside, San Bernardino, Orange County, and San Diego. 

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