Bill Banning NDAs Related to Workplace Discrimination Claims Advances

The legislature’s Judiciary Committee has approved a bill that bans nondisclosure agreements related to workplace discrimination claims.

SB 4, a wide-ranging measure that is also designed to protect domestic violence victims and “deter the unsolicited transmission of intimate images,” was approved on a party-line, 24-11 vote.

The bill, specifically Section Three, received broad opposition from industry groups during a committee public hearing last month.

SB 4 makes it a discriminatory practice if an employer requires or requests a prospective, current or former employee or independent contractor to enter into, or enforce, an agreement, containing a provision that is void. 

The bill stipulates that void provisions include “any provision in an agreement that prohibits disparagement or disclosure relating to conduct the employee or independent contractor reasonably believes to be a discriminatory practice.”

This applies to preemptive employment contracts, separation agreements, and legal settlements.

Expands Current Law

The bill also greatly expands the state’s anti-retaliation statute by making it a discriminatory practice for an employer to take an adverse action against any employee or independent contractor for disclosing conduct an employee reasonably believes to be a discriminatory practice. 

It also makes it a discriminatory practice for an employer to take adverse action against an employee who disparages the employer for engaging in conduct the worker reasonably believes to be a discriminatory practice.

These new causes of action go far above current law protecting employees.

“SB 4 unnecessarily creates new causes of action that are overly broad and vague, leaving room for interpretation that is likely to result in unintended consequences or abuse of the law.”

CBIA’s Wyatt Bosworth

For example, Section 46a-60(4) of the General Statutes makes it a discriminatory practice for “any person, employer, labor organization, or employment agency to discharge, expel, or otherwise discriminate against any person because such person has opposed any discriminatory employment practice or because such person has filed a complaint or testified or assisted in any proceeding …”

CBIA’s Wyatt Bosworth told committee members the organization “strongly supports” sections of the bill intended to protect victims of domestic violence and deter the unsolicited transmission of intimate images by electronic means.

“SB 4 unnecessarily creates new causes of action that are overly broad and vague, leaving room for interpretation that is likely to result in unintended consequences or abuse of the law,” he said.

“The bill applies to any disclosure of discrimination and fail to define what constitutes disclosure or specify the recipients or circumstances under which disclosure is prohibited.”

Damages

If enacted, the bill leaves any employer who enters into a banned NDA or confidentiality agreement with an employee liable for a minimum of $10,000 in statutory damages.

The bill also imposes a statutory minimum of $10,000 for employers that take adverse action against an employee who discloses conduct the employee reasonably believes to be a discriminatory practice.

There is no comparable workplace cause of action that imposes minimum damages of $10,000.

SB 4 leaves any employer who enters into a banned NDA or confidentiality agreement with an employee liable for a minimum of $10,000 in statutory damages.

In fact, under current law, damages for committing a discriminatory practice in the workplace are capped at $10,000.

The committee did not act on SB 361, which took a slightly different statutory approach to creating new causes of action related to nondisclosure agreements.

SB 4 now awaits action in the state Senate.

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For more information, contact CBIA’s Wyatt Bosworth (860.244.1155) | @WyattBosworthCT.