Employment Law Update: New Jersey Bans Non-Disclosure Agreements in Employment Settlements — Best Chicago Non-Compete Agreement Lawyers

Employers in New Jersey must review their current policies and practices to ensure compliance with a new statutory prohibition on the inclusion of non-disclosure provisions in employment contracts or settlements involving discrimination, harassment, or retaliation claims. The new law, signed by New Jersey governor, Phil Murphy, on March 18, 2019, and effective immediately, states that employers cannot insist that employees keep confidential the details of such claims or settlements. The law makes clear though that it should not be construed as prohibiting employers and employees from entering into non-compete agreements and confidentiality agreements relating to proprietary information, such as non-public trade secrets, business plans, or customer lists or information.

The law renders any provision in an employment contract that waives “any substantive or procedural right or remedy relating to a claim of discrimination, retaliation or harassment … against public policy and unenforceable against a current or former employee who is a party to the contract or settlement.” The law also does not permit prospective waivers of any right or remedy under the New Jersey Law Against Discrimination, or any other state statute or case law. The new provisions, however, do not apply to collective bargaining agreements.

Also required by the new law, every settlement agreement that resolves discrimination, harassment, or retaliation claims must also include a “bold, prominently placed notice” indicating that although the parties may agree to maintain the confidentiality of the settlement and some or all of the underlying facts, such a provision would be unenforceable as against an employer if the “employee publicly reveals sufficient details of the claim so that the employer is reasonably identifiable.” In other words, the law permits enforcement of a one-sided non-disclosure provision against the employer unless the employee discloses first. Employers are still free to protect other elements of a settlement agreement, however, including the amount of the settlement and any proprietary business information – though the law limits protection to non-public trade secrets, business plans, and customer information. Non-compete provisions remain unaffected by the law. One potential area of concern for employers is that the law offers little protection against a   potential defamation or retaliation claim by an employee against an employer based on the employer’s public statements.

Finally, the law protects employees from any form of retaliation if they refuse to enter into an agreement or contract that contains a provision deemed unenforceable and against public policy. The law creates a statutory private right of action for individuals claiming a violation of the law and makes available recovery of attorneys’ fees and costs in addition to all remedies available in common law tort actions.

If you are an employer seeking to enter a settlement agreement with an employee or you are an employee being asked to sign a settlement agreement, it is always advisable to seek the assistance of experienced employment and law discrimination attorney. Our Wheaton employment law, wage and hour, and non-compete agreement attorneys have more than three decades of experience representing individuals and businesses of all sizes, including small or closely held businesses for whom competition from an ex-employee can be a serious threat. Lubin Austermuehle a firm of Chicago employment and business dispute lawyers have defended high-level executives and represented classes of hourly workers in wage violation cases. A case in which our firm defended a former Motorola executive was covered in Crain’s Chicago business. You can view that article by clicking here.

Our Chicago business litigation lawyers with offices near Wheaton, Oakbrook Terrace and Schaumburg have substantial experience in restrictive covenant and breach of contract cases, and we are proud of our record of strong results. Our Chicago non-compete agreement attorneys represent both plaintiffs and defendants in such cases, and can also help stop litigation before it starts by reviewing contracts to look for covenants and clauses that could create problems later. Based in Elgin and downtown Chicago, our Willowbrook and Hinsdale non-compete clause lawyers take cases from LaGrange, Burr Ridge and many other cities throughout Illinois, as well as in Indiana, Wisconsin, and the entire United States. To learn more or set up a free consultation, please contact one of our Chicago business dispute lawyers through the Internet or call toll-free at (833) 306-4933 today.