California Limits Confidentiality in Settlements of Sexual Harassment and Gender Discrimination Claims

On September 30, 2018, Governor Brown signed into law SB 820, which prohibits provisions in settlement agreements that prevent “the disclosure of factual information related to a claim filed in a civil action or a complaint filed in an administrative action regarding … [a]n act of workplace harassment or discrimination based on sex, … or an act of retaliation against a person for reporting” such harassment or discrimination.  See C.C.P. § 1001.  The new law applies to agreements entered on or after January 1, 2019.

Aimed at preventing incidents of sexual harassment and gender discrimination from being hidden from public discourse, the new law will alter the calculus at the settlement stage.  Employees will no longer need to be concerned about entering into agreements that prevent them from discussing issues they would prefer to discuss freely.  Employers will no longer have the option of paying employees for silence about facts that may damage the employer's reputation.  

The new law will still allow settlement amounts to be kept confidential, and will also allow confidentiality of the claimant's identity at the claimant's request.   

The law appears to have a loophole:  it applies only to “factual information related to a claim filed in a civil action or a complaint filed in an administrative action” – therefore, it does not appear to cover claims settled before an administrative complaint is filed.
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If you have questions about confidentiality and sexual harassment settlements, feel free to contact Jhaveri-Weeks Law.