On March 24, 2022, Washington state Governor Inslee signed into law Engrossed Substitute House Bill 1795 (The Silenced No More Act) ("ESHB 1795"). Washington now becomes the second state (after California) to render nondisclosure and nondisparagement provisions illegal in employment agreements.
What is Prohibited?
The newly-enacted law broadly covers all types of agreements between employees (defined as current, former, and prospective employees or independent contractors) and an employer, including:
- employment agreements (such as those signed at the beginning of employment);
- independent contractor agreements;
- agreements to pay compensation in exchange for the release of a legal claim (settlement or severance agreements); and
- any other agreement between an employer and employee
Prohibited nondisclosure and nondisparagement provisions cover any conduct that an employee reasonably believes under Washington state, federal, or common law to be illegal discrimination, harassment, retaliation, a wage-and-hour-violation, sexual assault, or conduct that is recognized as against a clear mandate of public policy.
ESHB 1795 also defines prohibited nondisclosure and nondisparagement provisions to cover conduct that occurs at the workplace, at work-related events coordinated by or through the employer, between employees, or between an employer and an employee (whether on or off the employment premises).
No Exceptions For Settlement Agreements
ESHB 1795 is much more expansive than the 2018 version it repealed (RCW 49.44.210), which prohibited employers from requiring employees, as condition of employment, to sign nondisclosure agreements preventing employees from disclosing sexual harassment and sexual assault occurring in the workplace or work-related events.
The only stated exceptions to ESHB 1795 are that employers may still keep confidential the amount paid in a settlement of a disputed claim, and that the law also does not apply to agreements protecting trade secrets, proprietary information, or confidential information (as long as they do not involve illegal acts). Unlike its California counterpart and its prior version which came out of the #MeToo movement, ESHB 1795 provides no exception for settlement agreements of discrimination claims or lawsuits.
Civil Penalties
Nondisclosure and nondisparagement provisions are not only void and unenforceable under ESHB 1795, violating employers are also subject to civil penalties of actual or statutory damages of $10,000 (whichever is greater), plus reasonable attorneys' fees and costs, if they:
(1) discharge, discriminate, or retaliate against an employee who discloses conduct they reasonably believed to be illegal discrimination, harassment, retaliation, a wage-and-hour violation, or sexual assault;
(2) request or require an employee to enter into an agreement with a prohibited provision; or
(3) attempt to enforce a provision that is prohibited by this law, whether through a lawsuit, a threat to enforce, or any other attempt to influence a party to comply with a prohibited provision.
Retroactive Effect
Most notably, ESHB 1795 applies retroactively. It invalidates provisions in agreements created before the effective date and that were agreed to at the outset of employment or during the course of employment. However, the retroactivity clause does not apply to a non-disclosure or non-disparagement provision in an agreement to settle a legal claim.
All Washington employers should immediately review and revise any employment agreement with confidentiality and/or nondisparagement provisions. Seyfarth attorneys can help with any questions that may arise.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.