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New Jersey court says non-disparagement deals don’t hold

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Dive Brief:

  • Even when a worker in New Jersey signs a deal agreeing to not speak about discrimination, they can still speak out about the type of work environment they faced, the New Jersey Supreme Court ruled this week.
  • An ex-worker for Neptune Township Police Department had signed an agreement to not disparage her former employer. She did so publicly in an August 2020 interview about the alleged abuses she faced at her previous employer.
  • This followed a previous lawsuit the police department settled with the plaintiff, along with another woman who worked at the police department. The deal was signed after the second retaliation claim against the department was settled, according to NBC New York.

Dive Insight:

In reaching its conclusion, the court pointed to a 2019 change to laws on the state’s books. Gov. Phil Murphy signed Bill 121 into law banning both “provisions in employment contracts that waive rights or remedies” and “agreements that conceal details relating to discrimination claims. 

Sponsors of the bill had cited the #MeToo movement as a factor in bringing the Law Against Discrimination amendment to life.

“Through those words, the Legislature removed barriers that previously made it difficult for individuals to report abuse,” the court statement said. “Survivors of discrimination, retaliation, and harassment now have a legal right to tell their story a right that cannot be taken away from them by a settlement agreement.”

The non-disparagement clause of the non-disclosure agreement in question encompassed speech that was protected by the Law Against Discrimination, the court said; “For those reasons, the non-disparagement clause in the agreement is against public policy and cannot be enforced.”

The ruling comes amid a broader push to limit employer use of NDAs. Transparency around working conditions and criticism of employers also are often protected by the National Labor Relations Act. SpaceX recently came under fire for allegedly terminating employees for signing their names to an open letter against Elon Musk, for example. In this instance, similar to the plaintiff in the New Jersey police department case, workers at SpaceX also spoke to the toxic work environment that they had endured.

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