Blog

28
Dec

New California Law Bans Secret Sex Harassment Settlements

On its face, a new California law banning settlements that shield those accused in a lawsuit of sexual harassment, misconduct or discrimination would seem to be a good thing. After all, the argument goes, fewer individuals would likely be victimized if the harassers who have settled legal claims weren’t protected by agreements that prevent the allegations from becoming public. Such confidentiality has been a hallmark of these settlements.

The new law prohibits provisions in settlement agreements that prevent the “disclosure of factual information related to a claim filed in a civil action or a complaint filed in an administrative action” regarding:

  • An act of sexual assault that is not governed by subdivision (a) of Section 1002;
  • An act of sexual harassment as defined in Section 51.9 of the Civil Code;
  • An act of workplace harassment or discrimination based on sex;
  • The failure to prevent an act of workplace harassment or discrimination based on sex; or
  • An act of retaliation against a person for reporting harassment or discrimination based on sex.

While a victim could choose to keep his or her name private, as well as the value of the settlement, the perpetrator’s identity cannot be kept confidential. Additionally, courts will no longer be able to restrict the disclosure of such facts in relevant civil proceedings.

This is a well-intentioned law, but it remains to be seen it if will actually help victims of sexual harassment who file claims, or change workplace behavior. There is concern that the new law will make it more difficult for plaintiffs to receive beneficial settlements, as it makes it more attractive for companies to vigorously contest claims they might have previously been inclined to settle. Accused employees who will now face public shame if they settle may insist on extensive litigation to clear their names.

Such disclosures may have a larger cumulative affect of curbing sexual harassment in the long run, but they add a new wrinkle to settling individual cases in the short term.