Silenced No More: State Laws and Corporate Policies Lifting Gag Orders
Last week, tech giant Salesforce announced it would no longer enforce non-disclosure clauses and similar silencing mechanisms in employment agreements. The move is the latest in a growing list of corporate policies that are shifting in response to an impressive state-by-state advocacy campaign to change the law.
Non-disclosure agreements or NDAs have long been misused by corporations, non-profits, and other institutions to silence employees (especially women) from speaking out about sexual harassment, discrimination, and other abuses. Additional silencing mechanisms include non-disparagement and confidentiality clauses.
Thanks to the organizing efforts of the Transparency in Employment Agreements Coalition, numerous tech companies are now facing shareholder resolutions designed to force companies to stop silencing their employees.
One of the coalition’s leaders is Ifeoma Ozoma, who broke her own NDA to blow the whistle on Pinterest’s racism and sexism. She then became a co-sponsor of the California bill called Silenced No More, which was enacted last year. It’s the language of this law that Salesforce announced it is extending to all employees. This is significant because it’s acknowledging that a state-by-state approach does not make sense for large companies with employees around the nation. As Ozoma explains:
This policy change by Salesforce marks one of the largest expansions of Silenced No More protections across the country, as it will cover workers in states that are less likely to pass legislation similar to the bills in California, Washington, and New Jersey.
Other companies that already announced similar policies (also thanks to shareholder resolutions) include Google, Twilio, Expensify, and Pinterest. Apple initially tried to fight off the effort, but eventually acquiesced as well, but it appears for now it’s only required to create a report; the company is also under investigation by the SEC for allegedly misleading the agency regarding NDAs.
At the state level, this Law360 article entitled “One By One, States Are Banning NDAs To Protect Workers” breaks it down.
Washington State recently enacted the strongest law so far. While California’s Silicon Valley gets a lot of attention, Washington is home to such corporate giants as Microsoft, Amazon, Costco, Boeing, and Starbucks.
The Washington State law goes further than California in at least two ways: first by taking silencing mechanisms off the table completely. The California law prohibits silencing mechanisms only after certain kinds of claims has been filed (for example, sexual assault or sexual harassment), but the employee still has the option to agree to a silencing mechanism before filing any claims. This is not ideal because many cases resolve before a claim gets filed, and silencing could still be misused by employers in pre-litigation negotiations.
Secondly, Washington addresses all employee agreements. Another way that silencing clauses are misused is when companies require employees to sign them up front. Now, the “Washington law voids all blanket NDAs and non-disparagement clauses entered as a condition of employment, no matter when they were signed.” In addition, “in settlements with whistleblowers, employers will no longer be allowed to ask employees to sign confidentiality agreements.”
This makes Washington State’s language the current high bar for other states and corporations to follow, with one caveat: No state laws passed so far are retroactive as it relates to settlements or severance agreements. The Washington law voids silencing mechanisms in previous settlements, but only where no money was exchanged. In contrast, some corporate policies are making all previously signed silencing clauses null and void. For example, Pinterest announced last year (as part of a settlement of a shareholder lawsuit) that it was releasing former employees from nondisclosure agreements in cases of racial or gender discrimination.
According to Law360, in addition to California and Washington, numerous other states have enacted some form of restrictions on silencing mechanisms. And the momentum continues. In legislation just introduced on Friday, New York State lawmakers are proposing to ban non-disclosure and non-disparagement clauses in both employment contracts and settlements of workplace disputes.
Given the patchwork quilt of different state laws, all of this is likely heading to federal legislation. In March, President Biden signed a law to stop forced arbitration for sexual harassment and assault cases. This is a good start, and a lot more still needs to be done to protect workers, especially to expose all of the abuse and wrongdoing that has been covered up for so long.
I recently wrote about my own experience in agreeing to be silenced and its devastating negative impacts on my mental health and well-being. While it’s exciting to see all this flurry of activity, companies, non-profits, and institutions don’t have to wait to be forced into doing the right thing. Nothing is stopping any institution from lifting the veil of silence right now. Specifically, I recommend:
Current agreements: End the enforcement of all silencing mechanisms, which includes NDAs, non-disparagement clauses, and confidentiality clauses, across the board in all previously signed employee contracts, dispute settlements, and severance agreements, regardless of the nature of the dispute or settlement and regardless of whether there was a monetary settlement or not.
Future agreements: Take all silencing mechanisms off the table for any future employment contracts, dispute settlements, and severance agreements.
What is stopping your company, non-profit, or institution from doing this right now? If they are not willing, ask why not? What are they trying to hide?
Do you want to work with me on how to avoid NDAs? Contact me here.
Postscript: I am going to keep adding new corporate policies as I see them in the news.
May 3 addition: Slack is mentioned in this article but without details.