States Increasingly Restricting NDA Laws
Updates in Hawaii, Maine, Oregon, and Washington, with more to come
The National Law Review, a rather conservative outlet, recently published an article called “States Continue Crack Down on Nondisclosure Agreements”, a handy summary of recent state legislative activity to restrict employer’s ability to require employees to sign NDAs and other silencing mechanisms. Here is a summary.
Hawaii amended its existing laws to prohibit employers from entering into covered nondisclosure agreements, which only includes sexual abuse and harassment.
Maine’s new law restricts the ability of employers to limit employees rights to speak about discrimination, but unfortunately still allows employers to pay to silence workers. (Effective August 8.)
Oregon has amended its law to make it stronger. Covered nondisclosure agreements that were not requested by the employee, or that were a condition of the employer’s offer of settlement, are deemed void and unenforceable. (Effective January 2023.)
Washington, as a wrote about previously, has enacted the strongest law in the nation because it applies to all wrongdoing, and to all agreements, is retroactive, and unlike the California law, does not require the employee to file a claim to be covered.
The most encouraging news is how the article ends:
“There is every reason to expect that states will continue enacting or enhancing prohibitions and limitations on nondisclosure agreements between employers and employees. Accordingly, employers should work closely with employment counsel to ensure they are not executing employment, severance, or settlement agreements that run afoul of these prohibitions or limitations.”
I could not agree more but would go further to advise that employers follow the Washington State example and not restrict employees’ voices, period.