✅ Ending secret settlements

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By Grace Gedye 

WHAT THE BILL WOULD DO

SB 331 would ban employers from using secret settlements to prevent workers from speaking out about all kinds of illegal harassment or discrimination, with some limited exceptions. Carried by Democratic Sen. Connie Leyva of Chino, it builds on a law passed in 2018, which limited the use of non-disclosure agreements to settle cases of sexual discrimination, harassment or assault.

WHO SUPPORTS IT

A bevy of legal groups, labor groups, and women’s advocacy groups support the bill. It is co-sponsored by California Employment Lawyers Association, Equal Rights Advocates and Ifeoma Ozoma, a former public policy official at Pinterest who broke her non-disclosure agreement to speak out about discrimination she says she faced at the company. They say secret settlements perpetuate workplace discrimmination and harassment because they prevent survivors from speaking out.

WHO’S OPPOSED

Initially, objectors included a group of businesses and trade associations, helmed by the California Chamber of Commerce, arguing that the bill would effectively end the use of severance agreements. Businesses that choose to use severance agreements often do so in part to safeguard against potential reputational harm. In response to several amendments, such as one that allowed employers to keep the size of severance payments confidential, the Chamber and other groups withdrew their formal opposition. 

WHY IT MATTERS

Non-disclosure agreements are used widely among the world’s most powerful tech companies, many of which are based in California. Other industries use them too. By allowing workers to come forward with their allegations, this bill could prevent repeat offenders from harassing others. It would also allow workers to discuss their experiences with family and friends even if they decide not to go public — something many of these agreements prohibit. The flip side: Businesses concerned about protecting themselves against reputational harm would have one less tool in their toolkit if this bill becomes law.

GOVERNOR’S CALL:

Newsom signed the bill on Oct. 7.