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SB 331: New Restrictions on Settlement, Separation, and Nondisclosure Agreements
The state of California has long been at the forefront of employment law protections for workers, with a host of laws aimed at ensuring that employees are treated fairly and given the rights they are entitled to. One of the most recent pieces of legislation to come out of California is Senate Bill 331 (SB 331), which imposes a number of new restrictions on settlement, separation, and nondisclosure agreements.
What is SB 331?
SB 331 was signed into law in September 2021 by California Governor Gavin Newsom. The law takes aim at a number of practices that have long been used by employers to keep employees from speaking out about their experiences at work, including sexual harassment, discrimination, and other forms of misconduct. Specifically, SB 331 restricts the use of settlement, separation, and nondisclosure agreements in a number of key ways.
Restrictions on Nondisclosure Agreements
One of the most significant restrictions imposed by SB 331 is on the use of nondisclosure agreements. Under the new law, employers may not require an employee to sign an agreement that prevents them from disclosing information about unlawful acts that they may have witnessed or experienced in the workplace. This includes acts of sexual harassment, discrimination, and other forms of misconduct.
The law also requires that any agreement that restricts an employee's ability to speak out about unlawful acts must be written in plain language and prominently displayed in the workplace. Employees must also be given at least 21 days to review any such agreement before signing it, and they must be given the opportunity to consult with an attorney if they wish.
Restrictions on Settlement and Separation Agreements
In addition to the restrictions on nondisclosure agreements, SB 331 also places limits on the use of settlement and separation agreements in certain circumstances. Under the new law, employers may not require an employee to sign an agreement that prevents them from testifying in any legal proceeding that arises from their employment. This includes not only lawsuits, but also administrative proceedings such as those before the Equal Employment Opportunity Commission (EEOC) or the California Department of Fair Employment and Housing (DFEH).
The law also requires that any settlement or separation agreement that restricts an employee's ability to testify in a legal proceeding must be written in plain language and prominently displayed in the workplace. Employees must also be given at least 21 days to review any such agreement before signing it, and they must be given the opportunity to consult with an attorney if they wish.
Penalties for Non-Compliance
Employers who violate the provisions of SB 331 may be subject to penalties, including fines and legal action by the state. In addition, any agreement that violates the provisions of the law will be deemed null and void, meaning that employees may still be able to speak out about unlawful acts that they witnessed or experienced in the workplace.
Why is SB 331 Important?
SB 331 is an important step forward in protecting the rights of employees in California. By restricting the use of nondisclosure, settlement, and separation agreements, the law ensures that employees have the ability to speak out about unlawful acts that they may have witnessed or experienced in the workplace without fear of retaliation.
The law also ensures that employees are given ample time to review any agreement that may restrict their ability to speak out, and that they are given the opportunity to consult with an attorney if they wish. This helps to level the playing field between employers and employees, ensuring that workers have the information and resources they need to make informed decisions about their legal rights.
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If you believe that your employer has violated your rights under SB 331 or any other employment law, it's important to seek the advice of an experienced employment attorney. At Moser Legal, PC, we have a proven track record of successfully representing employees in a wide range of employment law matters. Contact us today to schedule a consultation and learn more about your legal options.