Changes to NDA and Confidentiality Agreements
As of July 1, 2023, Virginia prohibits clauses in NDA, confidentiality, or non disparagement agreements which have the purpose or effect of concealing sexual harassment.
Previously existing law in Virginia prevented employers from requiring actual or prospective employees “to execute or renew any provision in a nondisclosure or confidentiality agreement that has the purpose or effect of concealing the details relating to a claim of sexual assault.” Virginia Code § 40.1-28.1 “Nondisclosure or confidentiality agreement; provisions regarding sexual assault; condition of employment” (the “NDA Law”).
In March, Governor Glenn Youngkin signed HB 1895 into law, expanding the NDA Law to include claims of sexual harassment. Significantly, this extends not only to nondisclosure and confidentiality agreements, but also to agreements with a “provision relating to non disparagement.”
Notably, these restrictions apply to agreements entered into “as a condition of employment.” At this time, Virginia courts have not interpreted the newly amended law. However, it likely will not apply to severance agreements or post-termination agreements.
This amendment comes on the heels of a National Labor Relations Board (“NLRB”) decision released earlier this year. McLaren Macomb, 372 NLRB No. 58 (February 21, 2023). Markedly, McLaren ruled that certain confidentiality and non-disparagement provisions in severance agreements violate employees’ rights under the National Labor Relations Act (“NLRA”). Furthermore, the NLRB held that is unlawful for employers to offer severance agreements which broadly prohibited employees from making statements that could disparage or harm the image of the employer and further prohibited employees from disclosing the terms of the severance agreement to any third party.
For more information, or for review or assistance with employment or severance agreements for your employees, contact Sean M. Gibbons, Genevieve Bradley, and the employment attorneys at Roth Jackson Gibbons Condlin PLC by using the contact button below.
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