BILL WOULD END SECRET SEX HARASS SETTLEMENTS, PRESERVE RIGHT TO SUE FOR DISCRIMINATION

Last month, Governor Phil Murphy signed into law legislation meant to make sure that how much you are paid at work does not depend on your gender, race, age, religion or any other personal characteristic covered by NJ’s broad anti-discrimination law.

Another important bill also intended to protect equality in the workplace, is now moving through the Legislature and was voted out of the Senate Labor Committee on March 5 and the Assembly Labor Committee on May 10.

The legislation, S-121/A-1242, would prevent companies from requiring that workers or job applicants agree up front to relinquish their right to sue for discrimination or harassment or any other substantive or procedural right related to a claim for discrimination in order to keep their jobs or get hired in the first place. It would apply also to retaliation claims—where an employer fired or took some other adverse action against someone for complaining of discriminatory conduct.

In addition, the bill would outlaw the secret settlement of discrimination, harassment and retaliation claims, also referred to as “non-disclosure agreements, the sort repeatedly used by movie producer Harvey Weinstein when he paid off his accusers, allowing him to keep sexually assaulting and harassing women for decades.

Both the waiver and non-disclosure provisions would be deemed against public policy and unenforceable against the employee, whether or not still working at the company. An employer who tried to enforce such an agreement would not only be unable to do so but would have to pay the employee’s legal fees and costs.

Employees, on the other hand, would be allowed to enforce non-disclosure agreements against their employers but would lose that right if they revealed enough details about the claim so that the employer could be identified. The agreement would have to warn them of that consequence in boldface type.

Employees would be expressly protected from retaliation for refusing to sign a waiver or non-disclosure agreement and would have the right to sue for violation of the law and recover the usual tort damages plus legal fees and costs.

In introducing the bill at the Senate Labor Committee hearing, sponsor Loretta Weinberg, D-Bergen, spoke of the need for it. Referencing the widespread sexual harassment and assault that have been revealed since last fall when Harvey Weinstein’s long-time pattern of predation became public and #MeToo became a meme, Weinberg said it would not have been able to go on for as long as it did without confidentiality agreements: individual victims were given a payoff, “letting someone move on and repeat that egregious behavior time and time again.”

She added “This bill will go a long way toward stopping that.”

Those who spoke in support of the bill included New Jersey Citizen Action, NOW-NJ, the New Jersey Coalition Against Sexual Assault and employment lawyer Nancy Erika Smith, of Smith Mullin in Montclair. Smith’s numerous sexual harassment clients over the years include Gretchen Carlson, who claimed she was fired from her job at Fox News for refusing the sexual advances of chairman Roger Ailes. Carlson’s $20 million settlement in 2016 was not secret and came with an apology from Fox, in contrast to the typical no-admission-of wrongdoing characteristic of such agreements.

Smith described her settling clients as uniformly “shocked” on seeing confidentiality clauses in proposed settlement agreements. She believes most of them do not want the secrecy and forcing them to accept it as part of the deal amounts to “a further violation of their rights.”

Most of the opposition to the legislation –from groups like the New Jersey Chamber of Commerce and the New Jersey Society of CPAs, has been based on concerns about the effect on arbitration.

S-121/A-1242 does not purport to ban arbitration agreements and it does not even mention the word “arbitration.”

Alida Kass, of the NJ Civil Justice Institute, who testified before both Committees, asserted that because the bill prohibited waivers of rights such as the right to a trial by jury whose absence is an essential attribute of arbitration, it was an arbitration ban and as such, preempted by federal law.

Weinberg disagreed, as did Alan Schorr, a lawyer from Cherry Hill who represents workers and chairs the Legislative and Public Policy Committee of NELA-NJ, the New Jersey affiliate of the National Employment Lawyers Association.

Schorr said the bill did not attack arbitration and did not void arbitration agreements but merely barred employers from requiring waivers of rights granted by the New Jersey Law Against Discrimination.

Both the Senate and Assembly Committees made identical amendments to the bill as originally filed. They added: a specific reference to non-disclosure agreements, the proviso taking away an employee’s right to hold an employer to secrecy if they have already outed the employer and the boldface language requirement.

No one in either Committee voted against the bill. But in the May 10 Assembly Committee vote, three of the nine members, all Republicans, abstained: Parker Space, Robert Auth and Harold Wirths.

A pending federal bill would accomplish much of what the NJ bill seeks to achieve, as well as eliminate any question of preemption.

S.2203, the Ending Forced Arbitration of Sexual Harassment Act, was introduced on December 6 by Senator Kirsten Gillibrand of New York and is awaiting action in the Committee on Health, Education, Labor and Pensions.

It says that no pre-dispute arbitration agreement requiring arbitration of a sex discrimination claim is valid or enforceable. It says it does not apply to arbitration provisions that are part of collective bargaining agreements but does not allow even those if they “have the effect of waiving the right of an employee to seek judicial enforcement of a right arising under a provision of the Constitution of the United States, a State constitution, or a Federal or State statute, or public policy arising therefrom.”

The bill has 17 cosponsors, including two Republicans: Lindsey Graham of South Carolina and Lisa Murkowski of Alaska but neither Senator from New Jersey. It also has a House counterpart, H.R. 4734.

Some companies are stepping back from mandatory arbitration even without legislation.

On May 15, Uber announced that it was eliminating forced arbitration agreements for employees, riders and drivers who make sexual assault or harassment claims against the company and also dispensing with nondisclosure agreements in settling such claims. Later that same day, Lyft followed Uber’s lead on both aspects.

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