New Jersey's Response To #MeToo: New Law Voids Non-Disclosure Agreements And Questions Future Of Employee Arbitration Agreements

Executive Summary: Effective immediately, an amendment to New Jersey's Law Against Discrimination ("LAD") signed into law on March 18, 2019, invalidates any provision of an employment agreement which "waives any substantive or procedural right or remedy" under the State's broad anti-discrimination laws. The amendment also invalidates confidentiality and non-disclosure provisions in any employment contract or settlement agreement.

In an apparent nod to Stormy Daniels and the #MeToo movement, the amendment prevents employers from enforcing confidentiality clauses designed to keep private the details of claims of discrimination, harassment, or retaliation, and requires every settlement agreement involving a LAD allegation to include a "bold, prominently placed notice" explaining the employee cannot be punished for publicly revealing details of the claim. Though parties to a LAD dispute remain free to agree among themselves to keep the settlement agreement (and the underlying facts) confidential, yesterday's amendment renders such an agreement legally powerless. Though a similar law about sexual harassment claims was passed in New York last year, New Jersey's amendment goes much further by applying to all claims of discrimination, harassment, and retaliation.

Agreements protecting an employer's "proprietary information" and employer non-compete agreements are not affected by the amendment.

The LAD amendment also creates a private right of action for "[a]ny person claiming to be aggrieved" by a violation of the law, and provides two mechanisms for fee awards to successful employees. In line with other claims under the LAD, any action for violation of the law as amended must be commenced within two years of the violation.

The amendment's invalidation of employment...

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