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SB-331 Settlement and nondisparagement agreements.(2021-2022)

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Date Published: 02/08/2021 09:00 PM
SB331:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 331


Introduced by Senator Leyva

February 08, 2021


An act to amend Section 1001 of the Code of Civil Procedure, and to amend Section 12964.5 of the Government Code, relating to civil actions.


LEGISLATIVE COUNSEL'S DIGEST


SB 331, as introduced, Leyva. Settlement and nondisparagement agreements.
Existing law prohibits a settlement agreement from preventing the disclosure of factual information regarding specified acts related to a claim filed in a civil action or a complaint filed in an administrative action. These acts include sexual assault, as defined; sexual harassment, as defined; an act of workplace harassment or discrimination based on sex, failure to prevent such an act, or retaliation against a person for reporting such an act; and an act of harassment or discrimination based on sex by the owner of a housing accommodation, as defined, or retaliation against a person for reporting such an act.
This bill would clarify that this prohibition includes provisions which restrict the disclosure of the information described above. The bill would also expand the prohibition to include acts of workplace harassment or discrimination not based on sex and an act of harassment or discrimination not based on sex by the owner of a housing accommodation.
The California Fair Employment and Housing Act (FEHA) prohibits various actions as unlawful employment practices unless the employer acts based upon a bona fide occupational qualification or applicable security regulations established by the United States or the State of California. In this regard, FEHA makes it an unlawful employment practice for an employer, in exchange for a raise or bonus, or as a condition of employment of continued employment, from requiring an employee to sign a nondisparagement agreement or other document that purports to deny the employee the right to disclose information about unlawful acts in the workplace, including, but not limited to, sexual harassment or discrimination.
This bill would provide that unlawful acts in the workplace for these purposes includes any harassment or discrimination and would instead prohibit an employer from requiring an employee to sign a nondisparagement agreement or other document to the extent it has the purpose or effect of denying the employee the right to disclose information about those acts. The bill would make it an unlawful employment practice for an employer or former employer to include in any agreement related to an employee’s separation from employment any provision to the extent it has the purpose or effect of denying the employee or former employee the right to disclose information about unlawful acts in the workplace. The bill would provide that any provision in violation of that prohibition would be against public policy and unenforceable.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 1001 of the Code of Civil Procedure is amended to read:

1001.
 (a) Notwithstanding any other law, a provision within a settlement agreement that prevents or restricts the disclosure of factual information related to a claim filed in a civil action or a complaint filed in an administrative action, regarding any of the following, is prohibited:
(1) An act of sexual assault that is not governed by subdivision (a) of Section 1002.
(2) An act of sexual harassment, as defined in Section 51.9 of the Civil Code.
(3) An act of workplace harassment or discrimination based on sex, or discrimination, failure to prevent an act of workplace harassment or discrimination based on sex discrimination, or an act of retaliation against a person for reporting or opposing harassment or discrimination based on sex, discrimination, as described in subdivisions (a), (h), (i), (j), and (k) of Section 12940 of the Government Code.
(4) An act of harassment or discrimination based on sex, discrimination, or an act of retaliation against a person for reporting harassment or discrimination based on sex, discrimination by the owner of a housing accommodation, as described in Section 12955 of the Government Code.
(b) Notwithstanding any other law, in a civil matter described in paragraphs (1) to (4), inclusive, of subdivision (a), a court shall not enter, by stipulation or otherwise, an order that restricts the disclosure of information in a manner that conflicts with subdivision (a).
(c) Notwithstanding subdivision (a) and (b), a provision that shields the identity of the claimant and all facts that could lead to the discovery of his or her the claimant’s identity, including pleadings filed in court, may be included within a settlement agreement at the request of the claimant. This subdivision does not apply if a government agency or public official is a party to the settlement agreement.
(d) Except as authorized by subdivision (c), a provision within a settlement agreement that prevents or restricts the disclosure of factual information related to the claim described in subdivision (a) that is entered into on or after January 1, 2019, is void as a matter of law and against public policy.
(e) This section does not prohibit the entry or enforcement of a provision in any agreement that precludes the disclosure of the amount paid in settlement of a claim.
(f) In determining the factual foundation of a cause of action for civil damages under subdivision (a), a court may consider the pleadings and other papers in the record, or any other findings of the court.

SEC. 2.

 Section 12964.5 of the Government Code is amended to read:

12964.5.
 (a) (1)  It is an unlawful employment practice for an employer, in exchange for a raise or bonus, or as a condition of employment or continued employment, to do either of the following:

(1)(A)

(A) (i) For an employer to require an employee to sign a release of a claim or right under this part.

(B)

(ii) As used in this section, subparagraph, “release of claim or right” includes requiring an individual to execute a statement that he or she the individual does not possess any claim or injury against the employer or other covered entity, and includes the release of a right to file and pursue a civil action or complaint with, or otherwise notify, a state agency, other public prosecutor, law enforcement agency, or any court or other governmental entity.

(2)(A)

(B) For an employer to require an employee to sign a nondisparagement agreement or other document that purports to deny to the extent it has the purpose or effect of denying the employee the right to disclose information about unlawful acts in the workplace, including, but not limited to, sexual harassment. workplace.

(B)For purposes of this paragraph,

“information about unlawful acts in the workplace” includes, but is not limited to, information pertaining to sexual harassment or any other unlawful or potentially unlawful conduct.

(b)

(2) Any agreement or document in violation of this section subdivision is contrary to public policy and shall be unenforceable.
(b) (1) It is an unlawful employment practice for an employer or former employer to include in any agreement related to an employee’s separation from employment any provision to the extent it has the purpose or effect of denying the employee or former employee the right to disclose information about unlawful acts in the workplace.
(2) Any provision in violation of paragraph (1) is against public policy and shall be unenforceable.
(c) As used in this section, “information about unlawful acts in the workplace” includes, but is not limited to, information pertaining to harassment or discrimination or any other unlawful or potentially unlawful conduct.

(c)

(d) (1) This section does not apply to a negotiated settlement agreement to resolve an underlying claim under this part that has been filed by an employee in court, before an administrative agency, alternative dispute resolution forum, or through an employer’s internal complaint process.
(2) As used in this section, “negotiated” means that the agreement is voluntary, deliberate, and informed, provides consideration of value to the employee, and that the employee is given notice and an opportunity to retain an attorney or is represented by an attorney.