NJ Legislature on Track to Ban Non-Disparagement Clauses in Employment Agreements
A non-disparagement clause is often contained in a written agreement between an employer and employee and states the employee will not say negative things about the company. These clauses are quite restrictive and designed to stop employees from talking about a current or former employer’s leadership, products or services to friends, venting on social media or talking to reporters about company practices. Essentially, the employee signs a contract to get a job or accept a severance package, and the company gets assurances that the employee won’t say anything bad.
Ever since the #MeToo Movement, New Jersey lawmakers have been concerned about the confidential nature of sexual harassment settlements. In 2019, the New Jersey Law Against Discrimination (NJLAD) was updated to declare that employment contracts or settlements designed to conceal the details of discrimination, harassment or retaliation are against public policy and therefore unenforceable.
This was a positive step for employee rights, but it left a loophole open, as the 2019 amendment did not address non-disparagement clauses. So, employers kept using them to silence employees. In May 2022, a New Jersey appellate court upheld the enforceability of non-disparagement clauses, ruling that if the state legislature intended to ban such clauses, they would have mentioned them in the NJLAD.
In response to the ruling, the legislature is now taking steps to ban non-disparagement clauses in employment and severance agreements. The Assembly Judiciary Committee passed a bill in October 2022 that would add the following language to the NJLAD:
“A provision in any employment contract that waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment, including but not limited to, a non-disclosure or non-disparagement provision, or other similar agreement, shall be deemed against public policy and unenforceable.”
As of May 2023, the proposed bill is pending with the state Senate. If the bill passes, it is widely expected Governor Phil Murphy will sign it into law.
As an attorney who fights for employee rights, I view a potential ban on non-disparagement clauses as a positive and am monitoring the progress of the proposed legislation. For the time being, though, non-disparagement clauses remain enforceable in New Jersey. If you signed an employment agreement that contains a non-disparagement clause and now you have concerns, I am here to help. I have extensive experience handling cases involving non-disparagement clauses, non-compete agreements and all other aspects of employment and severance agreements.
My Succasunna law firm, Kevin T. Kutyla, Esq., represents employees in Morris County, Sussex County and throughout New Jersey. Please call 862-354-8931 or contact me online to schedule a consultation where we can discuss your specific situation and how my firm can help protect your rights.