In 2019, Virginia became one of the few states in the nation to pass legislation aimed ataddressing one of the many issues exposed by the #MeToo movement: Non-Disclosure Agreements. Non-disclosure agreements, or NDAs, are a legal contract between two parties agreeing to keep confidential, or to limit the disclosure, of certain information.
They have long been an effective and necessary tool for businesses looking to stay competitive in increasingly dynamic and shifting fields, to train and maintain the best workforce, and to keep trade secrets and corporate strategies protected.
This commonly used civil tool however has been under a harsh spotlight after the revelations that many high-profile men, most notably Harvey Weinstein, Bill Cosby, Bill O’Reilly and R. Kelly, used them as a mechanism to silence victims of sexual harassment and assault for decades. The use of NDAs in these scenarios effectively allows the victim to forfeit their ability to speak out to the press or to the policy for a monetary payment, and ensures that the behavior or pattern of behavior at issue never rises to the level of public or company-wide acknowledgement. Calls for the widespread prohibition of non-disclosure agreements for cases of sexual assault and harassment have grown since the advent of the #MeToo movement, with legislation proposed in twenty-sex states and passed in twelve.
Virginia’s variation on this legislation (§40.1-28.01), was signed into law in 2019 and specifically prohibits an employer from requiring an employee or applicant “to execute or renew any provision in a nondisclosure or confidentiality agreement that has the purpose or effect of concealing” rape or sexual battery as a condition of employment. Any such agreement is “against public policy” and will be considered facially void and unenforceable.
However, the statute specifically limits the restrictions on NDAs in two meaningful ways. First, Virginia’s enacted plan focuses exclusively on criminal sexual behavior, specifically the behavior specified in four criminal statutes for rape, forcible sodomy, battery and sexual battery. This list does not include any other subset of criminal behavior, such as non-sexual assaults or any type of fraud. Further, the statute does not elaborate on the use of NDAs in situations of sexual harassment, which is often an implicit and pervasive force at issue in many of the most newsworthy cases published in the last several years.
Second, and perhaps most cripplingly, the statute only restricts these agreements to the degree that they occur as a “condition of employment.” While this certainly prevents corporations from enforcing a blanket NDA signed at the commencement of employment (and similarly prevents modification of the NDA during the employee’s tenure) it does not restrict employers from presenting similar agreements during settlement or severance negotiations with employees. The implications here, at least for at-will employees, is that a calculation will likely be made, comparing the liability cost of keeping the victim within the company, or firing them and offering severance coupled with an NDA.
It will likely take years for the courts to begin to define the parameters of each state’s attempts to prevent predatory behavior to continue to go unchecked. Until then, a careful and mindful eye will be needed to monitor the language, and the impact, of employment related non-disclosures.
Austin Griffin is an Associate Attorney in the Employment and Business Litigation practices at Berenzweig Leonard. She can be reached at agriffin@berenzweiglaw.com