On March 24, Washington Gov. Jay Inslee signed into law the Silenced No More Act, greatly restricting the scope of nondisclosure and nondisparagement provisions that employers may enter into with employees who either work or reside in Washington state. Effective June 9, the new law prohibits employers from requiring or requesting that an employment agreement contain a provision:
- …Not to disclose or discuss conduct, or the existence of a settlement involving conduct, that the employee reasonably believed under Washington state, federal or common law to be illegal discrimination, illegal harassment, illegal retaliation, a wage and hour violation, or sexual assault, or that is recognized as against a clear mandate of public policy….
However, employers will still be able to enter into agreements that (1) prohibit the disclosure of the amount paid in a settlement agreement; and (2) protect “trade secrets, proprietary information, or confidential information that does not involve illegal acts.” An employer that violates the law can be found liable in a civil action for “actual damages or statutory damages of $10,000, whichever is more, as well as reasonable attorneys’ fees and costs.”
Once the law becomes effective, it will repeal and replace a 2018 Washington state law that prohibits employers from using employment agreements to preemptively restrict workers from disclosing claims of workplace-related sexual assault and sexual harassment. However, the 2018 law still allows employers to negotiate enforceable confidentiality provisions as part of a settlement agreement involving an allegation of such claims. The new law builds upon the 2018 law by, among other things, expanding the definition of an “employee,” broadening the categories and types of agreements that are now subject to restrictions on nondisclosure and non-disparagement provisions, and providing for greater penalties for violations.
The law broadly applies to all employment agreements, independent contractor agreements, settlement agreements, and/or releases in which compensation is paid in exchange for the release of a legal claim, and “any other agreement between an employer and an employee.” Under the law, “employee” is defined as a “current, former, or prospective employee or independent contractor.” Notably, the law not only applies to individuals employed by a Washington state employer, but also covers all employees who are Washington residents. Thus, employees who reside in Washington, but work in another state, will be covered.
When the law becomes effective on June 9, it will apply retroactively to existing agreements and “invalidate nondisclosure or nondisparagement provisions in agreements created before the effective date … and which were agreed to at the outset of employment or during the course of employment.” Come June 9, attempts to enforce the invalidated nondisclosure or non-disparagement provisions will be deemed a violation of the law.
Employers should take note that the Act will not be retroactively applied to non-disparagement and nondisclosure provisions contained in legal settlement agreements entered into prior to June 9. Employers currently seeking to settle claims covered by the law that want to obtain enforceable non-disparagement and nondisclosure clauses should seek to finalize pending settlement agreements prior to June 9.