The New Jersey Supreme Court ruled that a 2019 amendment to the New Jersey Law Against Discrimination – N.J.S.A. 10:5-12.8(a), or Section 12.8—that bans nondisclosure agreements in employment discrimination-related cases also covers nondisparagement clauses. In reaching this conclusion, the court cleared up some legal ambiguity in the 2019 law banning nondisclosure agreements. Partner Tom Doherty spoke with Law360 and said that the result could make it harder for companies to resolve bias and harassment cases. He added that employers won’t be able to prevent former workers from speaking openly about allegations that, although settled, may be unproven or didn’t rise to the level of being unlawful.
“With this new ruling, I think it’s going to become a little tougher for employers to settle some of these cases because when you’re looking to buy peace, you’re not looking to have the former employee go out to the media and start trashing the employer and the supervisor after you’ve paid money to settle what are disputed and unproven claims,” Tom said. “That’s, I think, something that the court overlooks a little bit.” Tom also noted that after the 2019 law was passed, and even more so after the appeals court ruled in Savage’s case, many employers believed nondisparagement clauses were acceptable to include in settlements resolving discrimination cases. “Do I think the clauses will disappear entirely? No,” he said, while adding that they “might have to be drawn in such a narrow and potentially irrelevant fashion that they’re just not going to have the value that they had before for employers.”