Can My Employer Limit What I Can and Can’t Say in California?
In this blog post, we’ll break down the details of SB 331, explaining what it says about when your employer can and can’t use legal methods to keep employees silent, and how an employment lawyer can help you if you’re facing pressure from an employer’s gag order.
Settlement Agreements and SB 331: When Can My California Employer Limit What I Say?
The first part of California’s SB 331 focuses on how employers use confidentiality clauses in settlement agreements to keep employees quiet.
In 2018, in response to the #MeToo movement, the California legislature passed a bill banning the use of non-disclosure agreements (NDAs) and other confidentiality agreements in any lawsuits involving sexual assault, workplace sexual harassment, sex-based discrimination, and/or retaliation for reporting harassment or discrimination of this kind.
The new SB 331 bill essentially expands this existing ban. Now, employers are prohibited from including confidentiality clauses or NDAs as part of a settlement for any kind of workplace harassment or discrimination claim protected under California’s anti-discrimination law.
This includes harassment and discrimination perpetrated on the basis of sex, but also:
- National origin
- Disability/medical condition
- Familial status
- Military/veteran status
This ban on NDAs and confidentiality agreements also includes settlements in disputes involving employer retaliation against a worker for reporting harassment or discrimination based on the above or any other protected characteristics.
Importantly, the ban only applies to settlements for pending civil actions (lawsuits) and administrative charges, i.e. claims of workplace wrongdoing made through a state agency, like the California Civil Rights Department (CRD). It doesn’t apply to any disputes that are settled between an employer and an employee before trial or a CRD hearing.
Additionally, in any of these cases, an employee may still request that a confidentiality clause is included in a settlement agreement in order to protect their identity.
But your employer can’t pressure you to include one, or otherwise compel you to keep silent about the harassment or discrimination you experienced as part of your settlement agreement.
Severance Agreements and SB 331: When Can My California Employer Limit What I Say?
SB 331 also places new restrictions on how employers use non-disparagement clauses in employee separation agreements.
A non-disparagement agreement is a legal contract that prohibits an employee from speaking publicly or privately about their employer in ways that could harm the company’s reputation.
Although there’s no universal legal definition of “disparagement,” many companies have used these agreements to keep employees quiet specifically about any employer wrongdoing, labor code violations, or unlawful working conditions they experienced.
Since 2019, it’s been illegal in California for employers to pressure employees into signing non-disparagement agreements in exchange for workplace benefits — promotion, bonuses — or even just to keep their jobs.
SB 331 extends the current ban on this coercive use of non-disparagement clauses to employee severance agreements.
Severance agreements operate like contracts: the employee being terminated is offered certain benefits (e.g. pay, extended health insurance, etc.) if they agree to certain requests on the company’s part (e.g. to leave quietly, not to sue). Usually, if you don’t agree to your company’s severance terms — no severance payout, no benefits post-termination.
The new law doesn’t prevent non-disparagement clauses from being included in severance agreements entirely. Companies can still require their departing employees to agree not to go to the media (traditional or social) with a screed on how poorly run their former company was.
But if an employer wants to include a non-disparagement clause in the severance agreement, they must also make it clear to the employee that they still have the right to report any unlawful conduct that occurred in the workplace. For instance, the non-disparagement agreement should also include something like this:
“Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.”
Finally, to doubly ensure that employees understand their rights and obligations, SB 331 now also requires employers to inform workers that they have a right to consult with an attorney before signing a severance agreement.
Employers also have to leave employees a “reasonable amount of time” — at least five business days — to consider the severance agreement offer and to contact and consult with an attorney if they wish.
An employee can accept the agreement before the required five days are up, but only if they do so voluntarily and in full knowledge of their rights.
It’s illegal for employers to pressure employees to sign early or use threats of withdrawing or altering the terms of the agreement within those five days in order to get them to sign.
Are There Any Situations Where My California Employer Can Still Restrict My Speech Under SB 331?
The new law does include some exceptions to its bans on confidentiality clauses in settlements and severance agreements.
For one, employers are still allowed to use confidentiality clauses, such as NDAs, in severance agreements in order to protect business-critical proprietary information.
Keeping legitimate trade secrets and/or confidential client information under wraps is still a valid reason to legally restrict an employee’s speech — provided that none of it involves suppressing unlawful behavior.
Additionally, SB 331 also allows employers to enforce confidentiality around payment amounts in settlement agreements and severance packages.
Nonetheless, this new law marks a significant change. Employers who have relied on these types of contracts to keep labor violations and misconduct a secret will no longer be able to silence employees with impunity.
Without the threat of legal action or contractual gag orders, employees who’ve experienced harassment, discrimination, and/or other workplace wrongdoing are able to speak out, seek restitution in a public court, and hold companies accountable for addressing unlawful behavior.
Consult With an Employment Lawyer
California’s SB 331 represents an important step in dismantling the procedural secrecy that’s helped perpetuate abusive and unlawful work environments for decades.
If you’ve been staying silent about illegal behavior in your workplace — whether it’s discrimination, harassment, or wage violations, — it’s time to seek out an employment attorney to learn about how you can get justice.
An experienced lawyer familiar with California’s labor laws can evaluate your situation and help you navigate the process of filing a claim and getting justice.
Ottinger Employment Lawyers has been helping employees who’ve suffered harassment and discrimination hold their employers accountable and win recovery for over two decades.
If you’re a California worker concerned about workplace wrongdoing, contact our office today to speak to an attorney about your case and how we can help you.