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Recent ruling extends scope in banning non-disclosure agreements

On Behalf of | Jun 3, 2024 | Employment Law |

The Federal Trade Commission’s recent announcement that it would ban most non-compete agreements has generated a lot of attention. Workers and employers should also be aware of changes in non-disclosure laws.

A recent case decided upon by the New Jersey Supreme Court exemplifies how both employers and employees need to be prepared to handle issues as they arise, even after there has been a settlement.

Non-disparagement agreements now part of New Jersey non-disclosure ban

A case in which a former law enforcement officer had a non-disparagement agreement as part of her settlement of a lawsuit against her department resulted in the State Supreme Court banning these agreements. The department tried to prevent the former officer from speaking out when she made comments to a news network.

With the non-disparagement agreements, workers who were subjected to discrimination, harassment and retaliation were unable to speak out about what they endured on the job. According to the decision, these workers are now free to discuss what happened without fear of violating the contract.

Advocates of the elimination of the non-disparagement agreement say that the inability to speak out prevents a widespread reduction in discriminatory behaviors. This is attached to the end of NDAs – an issue that was hotly debated with the subsequent changes still in flux.

The state Law Against Discrimination had an amendment in 2019 that rendered a settlement agreement unenforceable if the objective was to prevent information regarding past incidents and complaints of harassment, retaliation or discrimination from becoming public knowledge.

Workers need to understand every aspect of an employment law case

This ruling goes beyond the simple matter of an employee who was found to have been confronted with several employment law violations and had an agreement inhibiting her ability to speak out about it. As NDAs are being eliminated and the tenets connected to them are under scrutiny, it is imperative for people to have an idea of their rights at every level of their claim. That includes the complaint, the legal filing, settlement negotiations and their rights after the case is completed. Knowing the law and how to proceed is key.