Non-Disparagement Clauses in New Jersey: Current Rules
New Jersey has enacted some of the strongest restrictions on non-disparagement clauses in the country, particularly in the employment and settlement context.
New Jersey's Legislative Framework
New Jersey Senate Bill 121, signed into 2019 and effective March 2019 (often called the NJ SPEAK OUT Act or the amendment to the NJ Law Against Discrimination), makes non-disclosure and non-disparagement provisions in employment contracts and settlement agreements unenforceable against employees if they waive substantive or procedural rights relating to discrimination, retaliation, or harassment claims.
Specifically, the law provides that any provision in an employment contract or settlement agreement that has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment is against public policy and unenforceable.
What This Means in Practice
- Employment agreements: Employers cannot require prospective employees to waive rights or sign non-disparagement clauses that would prevent disclosure of discrimination or harassment claims as a condition of employment.
- Settlement agreements: Settlements may still include confidentiality of financial terms, but cannot restrict the employee from disclosing the underlying facts of discrimination, harassment, or retaliation claims.
- Employer notice requirement: Every settlement agreement resolving a discrimination, retaliation, or harassment claim must include a bold, prominently placed notice that the employee retains the right to disclose details to law enforcement, the EEOC, or the NJ Division on Civil Rights.
Red Flags in New Jersey
- Employment agreements that condition hire on signing a non-disparagement clause covering discrimination or harassment
- Settlement agreements without the required bold notice of retained rights
- Clauses that attempt to restrict communications with the NJ Division on Civil Rights
- Provisions requiring return of severance for any disclosure of claim details
When to Consult a Lawyer
New Jersey's protections are strong but specific. If you are presented with a non-disparagement clause in a New Jersey employment, severance, or settlement agreement, consider consulting a New Jersey employment attorney to understand your rights under current law.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.