Gov. Phil Murphy on Monday signed a bill into law that restricts the use of nondisclosure agreements in employment contracts and settlement agreements. Cases involving discrimination, retaliation or harassment, including sexual assault and sexual harassment, fall under the new law.
Such agreements are featured in settlements in which the aggrieved party agrees not to pursue litigation or discuss terms of the deal in exchange for a sum of money. Under typical terms, if the NDA is violated, the other party may sue for injunctive relief to stop the release of information, and recover damages.
But recent high-profile cases involving powerful men in entertainment, politics and media, including Harvey Weinstein and Bill Cosby, put such agreements in the spotlight. Proponents of the bill saw them as tools used to silence accusers and deny them the opportunity to seek justice through the courts.
The new law prohibits provisions in employment contracts that waive the rights of victims and makes any such contract that requires employees to conceal details relating to these types of claims unenforceable against employees. If the employee publicly reveals enough information to identify the employer, the employer would then be also free to discuss the case.
“Non-disclosure agreements have, for a long time, been used to silence and intimidate the victims of sexual assault and harassment,” Sen. Loretta Weinberg, D-Bergen, the bill’s main sponsor in the upper chamber, said. “Limiting these so-called ‘confidentiality agreements’ will help lift the secrecy that allows abusers to carry on abusing, and make our workplaces safer for everyone.”