New California Law Puts an End to Hush Money Payments in Harassment Settlements
Updates on California Sexual Harassment Laws
On September 30, 2018, California Governor Jerry Brown signed a groundbreaking bill into law, changing the landscape of sexual harassment settlements within the state. The law, which took effect on January 1, 2019, prohibits certain confidentiality provisions in settlement agreements related to workplace sexual harassment, discrimination, and retaliation cases.
This legislation serves as an extension of existing California sexual harassment laws that aim to promote transparency and accountability in workplaces. The law explicitly bans the use of confidentiality clauses that prevent the disclosure of facts regarding harassment, discrimination, or assault cases. The primary objective of this law is to prevent employers from silencing victims through hush money payments and non-disclosure agreements (NDAs), ensuring that perpetrators can be held accountable for their actions.
Key Provisions of the Law
The new law applies to all employers operating within the state of California. It restricts the use of non-disclosure agreements in settlements related to the following:
- Acts of sexual violence – This includes any form of sexual assault or misconduct in the workplace.
- Acts of sexual harassment, bullying, or gender discrimination – Workplace harassment based on gender or sex is now subject to full transparency.
- Workplace discrimination based on sexual preference – Employees who experience discrimination due to their sexual orientation are now protected.
- Retaliation against employees for reporting sexual harassment – Employers can no longer use settlement agreements to silence employees who report instances of misconduct.
This law aims to protect employees from being pressured into signing confidentiality agreements that would prevent them from speaking out about their experiences. By making details of harassment cases public, California lawmakers hope to create a culture of accountability and deter future misconduct.
Protecting Victim Identity and Financial Confidentiality
One crucial provision of the law ensures that the identity of the victim remains confidential if they choose to remain anonymous. This measure prevents further harm or retaliation against the individual coming forward with allegations. While the law prohibits confidentiality around the facts of the case, it does allow for the financial terms of the settlement to remain private. This means that while the details of the harassment may become public, the specific amount of money paid in the settlement does not have to be disclosed.
The Impact of This Legislation
By eliminating the ability to cover up sexual harassment claims through hush money agreements, this law marks a significant shift in how workplace misconduct cases are handled in California. It aligns with the broader #MeToo movement, which has brought increased attention to workplace harassment and the misuse of power.
Critics of the law argue that it may discourage companies from settling cases, leading to prolonged legal battles. However, advocates believe that this transparency will drive companies to adopt stronger workplace policies that prevent harassment in the first place.
Ultimately, this legislation represents a significant step toward ensuring safer and more equitable workplaces in California. Employees now have a greater ability to hold employers accountable, and businesses must take proactive steps to create a harassment-free work environment.
