By Ryan E. Gallagher, Esq. 

The Law Against Discrimination (LAD) amendment, which is prospective only, deems a provision in any employment or settlement agreement to be against public policy and unenforceable against a current or former employee if same has “the purpose or effect of concealing the details” of discrimination, retaliation, or harassment. Employers may still include non-disclosure provisions in employment or settlement agreements, but the employee must be put on notice, in “a bold, prominently placed notice”, that “such a provision in an agreement is unenforceable against the employer if the employee publicly reveals sufficient details of the claim so that the employer is reasonably identifiable.” (N.J.S.A. 10:5-12.8(b)). Simply put, an employer may no longer assume that a current or former employee who has signed an agreement containing non-disclosure provisions will be bound by them. However, the employer may also be permitted to discuss publicly the subject of the agreement, should an employee disclose details of its LAD claim in a manner which reasonably identifies the employer. Unfortunately the amendment does not provide any guidance as to what would make an employer “reasonably identifiable.” 

The amendment also renders unenforceable provisions waiving any substantive or procedural right or remedy, including rights or remedies available under the NJ LAD or any other statute or case law, relating to discrimination, retaliation, or harassment. (N.J.S.A. 10:5-12.7). Specifically, an employer may not require an employee to agree to mandatory arbitration, waive his or her right to a trial by jury, or waive the right to commence and/or participate in a class-action lawsuit concerning his or her LAD claim. The amendment provides for a two-year statute of limitations for an employee to bring a retaliation claim should the employer retaliate against that employee for refusing to enter into agreements containing the provisions previously mentioned.

Following Senate Bill 121, new legislation has been introduced seeking to amend N.J.S.A. 10:5-12.8 and N.J.S.A. 10:5-12.7 to include non-disparagement provisions in employment, separation or similar type agreements as being against public policy and unenforceable. (NJ Assembly Bill A4521 and corresponding NJ Senate Bill S2930.). Presently, non-disparagement clauses that do not “conceal the details” relating to a LAD claim are still enforceable in New Jersey. Our office continues to monitor the status of the proposed legislation and will advise as to any future developments in this critical area of employment law. 

In light of these changes, employers must be careful when negotiating employment and/or settlement agreements and ensure that all such agreements executed after March 18, 2019, comply with these amendments to avoid running afoul of N.J.S.A. 10:5-12.8 and N.J.S.A. 10:5-12.7. 

For more information, contact Ryan Gallagher at rg@spsk.com or at (973) 798-4953.