The phrase “non-disclosure agreement” and its shorthand, NDA, are commonplace in news stories about various disputes. NDAs are often part of employment contracts or paired with settlements, and may help both sides feel confident a dispute of some kind is officially over.
In both New York and New Jersey, however, things have changed in recent years. The use of an NDA in connection with an employment discrimination case is now significantly restricted.
New York and discrimination-related NDAs
New York law regarding workplace discrimination and non-disclosure agreements is quite straightforward, due to new regulations that took effect in October of 2019.
The law bars an employer from requiring a worker to submit to an NDA if it stems from a sexual harassment or workplace discrimination claim. Essentially, an agreement cannot prevent the “underlying facts and circumstances of the discrimination” from being discussed.
However, there is an exception: A worker may choose to request an NDA. There is a 21-day waiting period to finalize this, however, and a seven-day window where the worker can choose to reverse course.
New Jersey’s NDA laws
The regulations for non-disclosure agreements in New Jersey are fairly similar. From March 18, 2019, onward, any NDA that would hide the details of a sexual harassment or discrimination claim is simply null and void. This, in effect, outlaws their use. Arbitration claims are also impacted by this law.
This is a simplified overview of two complex laws from two neighboring states. There will certainly be unique circumstances that do not quite fit into the boxes laid out above.
The bottom line, however, is that employers and workers need to keep these general restrictions in mind when working toward a resolution in a discrimination case. There are situations where one or both sides may benefit from an NDA. But establishing one that is legally enforceable is more difficult than ever.