Changes to New Jersey Settlement Agreements and Employment Contracts

On March 18, 2019, the Governor of New Jersey signed a new law that affects settlement agreements and employment contracts.  Under the law:

·         Any nondisclosure clause that conceals details relating to claims of harassment, discrimination, or retaliation is unenforceable. 

·         Provisions waiving procedural or substantive due process (such as the right to a trail by court or jury) in cases of harassment, discrimination, or retaliation are banned.  This effectively blocks employers from including mandatory arbitration provisions in their employment agreements. 

The law was passed in response to employee concerns in the Me Too era. 

The law became effective on the March 18 signing date.  It applies to all agreements entered into, amended, or renewed on or after March 18.  Agreements in place prior to March 18, 2019 are not covered under the law.

Going forward, New Jersey employers should be sure no language that is prohibited by the law is included in any confidentiality agreements, settlement contracts, employment agreements, and similar types of documents.  Employers should also consult with legal counsel before modifying or renewing existing agreements that were entered into prior to March 18, 2019.