In 2018, Washington lawmakers passed a law prohibiting employers from requiring an employee or applicant, as a condition of employment, to sign any agreement that prevents the disclosure of alleged incidents of sexual assault or sexual harassment in the workplace (RCW 49.44.210). The law carved out an exception, however, allowing for nondisclosure provisions to be included in settlement agreements. See Lane Powell’s previous legal update found here.
In 2022, the Washington Legislature went much further in its effort to promote free and unfettered discussion of alleged instances of discrimination and harassment, even when an employer has paid to settle the claims. On March 24, 2022, Governor Inslee signed into law ESHB 1795, which repeals the 2018 law and adds broader prohibitions. The new law expands the scope of claims that cannot be tied to nondisclosure agreements and also removes the settlement agreement exception. Important aspects of this law include:
- A ban on agreements between employers and employees not to disclose conduct, or the existence of a settlement, involving acts of alleged discrimination, harassment, retaliation, sexual assault, a wage and hour violation, or conduct that is recognized as against a clear mandate of public policy.
- The ban applies to employment agreements, independent contractor agreements, agreements in exchange for the release of a claim, “or any other agreement between an employer and employee” (e.g., separation agreements).
- Employers are prohibited from discharging or otherwise taking adverse action against an employee for disclosing or discussing any of the above types of the alleged conduct.
- The law does not prohibit a provision requiring nondisclosure of the amount paid in settlement.
- Current and former employees, prospective employees, and independent contractors are protected under the new law.
Retroactivity and Application to Existing Nondisclosure Agreements
The law specifies that any existing nondisclosure or non-disparagement agreements entered into at the outset of or during the course of employment before the passage of the law are void and unenforceable, and any attempt to enforce such provisions or agreements (which are now prohibited) is a violation of the new law. This retroactivity does not apply to a nondisclosure or non-disparagement provision in an existing settlement agreement.
Violations are subject to a minimum $10,000 penalty, as well as reasonable attorneys’ fees and costs the individual incurs in any civil suit filed under the new law.
What Should Employers Do Now?
The new law will take effect on June 8, 2022. On that date, employers must immediately desist from requiring or even requesting (since even requesting amounts to a violation of the law) that employees or applicants enter into nondisclosure or non-disparagement agreements that prohibit disclosure or discussion of the types of conduct listed above. As for existing agreements, an alleged violation of the new law occurs only if an employer tries to enforce a now invalid agreement, so employers, of course, should not attempt to enforce or threaten to enforce existing agreements, other than those that are contained in existing settlement agreements. Importantly, nothing in the new law prohibits or restrains an employer’s ability to require nondisclosure agreements related to proprietary and trade secret information.
In light of these new restrictions, employers should review their standard nondisclosure agreements to ensure that they are properly drafted in compliance with Washington’s new law and other applicable federal and state laws. Employers should consult with counsel before seeking to enforce any prior nondisclosure agreements. Employers who are settling employment claims should consider the impact of this and other laws regarding confidentiality, including federal tax laws. You can view our legal update regarding this topic here.
Lane Powell’s team of labor and employment attorneys is here to help your organization comply with state and local laws, and develop and implement the strategy that supports your business and your employees. For more information, contact Callie Castillo or Beth Joffe. Keep up-to-date by subscribing to Lane Powell’s Legal Updates.