Under a new law passed this year by the Nevada Legislature—Assembly Bill (“AB”) 248—defendants (including employers) can no longer include certain confidentiality requirements in settlement agreements relating to claims of sexual harassment. Effective July 1, 2019, this legislation is clearly a legislative response to #MeToo and other similar movements across the country.

As a result of AB 248, settlement agreements cannot contain provisions that restrict a party from disclosing factual information underlying the claimant’s (i.e., the employee’s) claims if the settlement pertains to sexual discrimination or offenses of a similar nature, including retaliation by the employer for complaints of sexual harassment. (AB 248 will be discussed in detail at our Employment Law Update Webinar for Nevada Employers: 2020 Edition, along with several other significant developments in employment law. Sign up online at our Events page, or by contacting any of our offices.)

The law closely tracks a similar law passed in California last year, Senate Bill 820, which also voids certain confidentiality provisions in sexual harassment settlement agreements.  (See our October 4, 2018, blog post on SB 820 by clicking here.)

No confidentiality for:

• Harasser’s identity
• Details of the harassment, discrimination or retaliation
• Any adverse action or failure to act by the employer

Among other things, the harasser’s identity can no longer be among the information protected in the confidentiality clauses of a sexual harassment settlement agreement. This is becoming a growing trend in an effort to combat sexual harassment in the workplace.

Furthermore, the employee may not be required to keep confidential any of the factual details giving rise to their complaint of sexual discrimination, harassment, or retaliation, including any facts related to whether the employer, for example, engaged in unlawful behavior, took adverse action against the employee based on the employee’s complaint of discrimination or harassment, or failed to act appropriately to prevent or remedy harassment of which the employer had knowledge.

Limitations:

• Only applicable to claims filed in state/federal court or administrative action after July 1, 2019
• Settlement amount can still be kept confidential

The applicability of AB 248 is limited to claims filed in a civil lawsuit or administrative action before the Equal Employment Opportunity Commission (“EEOC”) or Nevada Equal Rights Commission (“NERC”). It is also only applicable to claims and cases filed after the July 2019 effective date.

Also, while the factual information underlying the employee’s claims cannot be kept confidential under this new law, the settlement amount may still be subject to a confidentiality agreement.

Employee’s Identity Protected

Conversely, if requested by the employee who brought the claim, the settlement agreement must contain provisions prohibiting disclosure of that employee’s identity, as well as any facts that could lead to the disclosure of their identity. However, protection of the employee’s identity is not permitted if any party to the settlement agreement is a government agency or public official.

Takeaways for Nevada Employers

Employers should be aware of AB 248 and the additional potential danger of not being able to benefit fully from contractual confidentiality in the context of sexual misconduct settlement agreements. Accordingly, it is a good time to conduct a thorough review of company policies and practices to ensure that all written policies are in compliance with state and federal anti-discrimination, anti-harassment, and anti-retaliation laws, and that employees at all levels are adequately educated and trained. Specifically, all managers and supervisors should receive regular training on harassment prevention, at least once every two years. SHLC conducts on-site harassment prevention trainings for employers, as well as trainings by live, interactive webinar. For more information, visit our Events page.

If claims of sexual harassment or discrimination do arise, it is critical, now more than ever, to take quick and effective responsive action. Employers should keep in mind that this law only restricts confidentiality provisions after a complaint has been filed in court or with the appropriate state or federal agency. For that reason, employers should give serious consideration to early settlement—prior to the filing of a civil or administrative complaint—to preserve the opportunity for guarantees of confidentiality.

For the full text of AB 248, click here.