Are non-disclosure agreements effectively dead in California?

For decades, any time a company wanted to quash rumors and complaints about everything from a racially hostile workplace to a powerful executive who couldn’t keep his hands to himself, non-disclosure agreements (NDAs) came out.

These agreements would be offered with a settlement to the victims to keep the issue out of court and the company’s name out of the newspapers because there really is such a thing as bad publicity.

A new law sharply limits NDAs in California

Thanks to various social movements over the last few years, things have changed. The 2018 Stand Against Non-Disclosures (STAND) Act prohibited California companies from using NDAs to silence the victims of workplace sexual harassment, discrimination, abuse or assault.

Now, starting Jan. 1, 2022, the “Silenced No More Act” will ban NDAs that seek to prevent workers from publicly talking about other types of workplace abuses, harassment and illegal activities.

This law doesn’t entirely kill NDAs, which can still be used to serve legitimate business interests. For example, if a company wants to hire a contractor for some specialized work, an NDA may be used to protect the company’s intellectual property.

What it does mean, however, is that companies can no longer hide their “dirty laundry” behind a paper agreement. This is likely to force a number of reckonings in different companies and industries where workplace abuses were common because transparency makes it harder for both companies and individuals to get away with bad behavior.

If you’ve been victimized by workplace sexual harassment or discrimination, find out more about your rights and options. They’re much broader than they once were.