California bill targets NDAs that prevent workers from speaking about discrimination

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A new bill introduced in California will target gag rules that keep workers from speaking out about harassment and discrimination when leaving a job.

These agreements, known as non-disclosure agreements or NDAs, are common at major tech firms, in Hollywood and in media, and prevent former employees from going public with information about the inner workings of a company. NDAs have faced widespread criticism for shielding companies from public accusations of wrongdoing, including sexual misconduct, racism or discriminatory treatment.

SB 331, sponsored by the California senator Connie Leyva, is also known as the Silenced No More Act and would expand current protections against secret workplace settlements and further prohibit the use of confidentiality for workers leaving a company.

In 2018, California passed a law banning their use to keep quiet allegations of sexual harassment. SB 331 seeks to expand those protections to cover all forms of discrimination, including racism.

“It is unacceptable for any employer to try to silence a worker because he or she was a victim of any type of harassment or discrimination – whether due to race, sexual orientation, religion, age or any other characteristic,” Leyva said in a statement. “SB 331 will empower survivors to speak out – if they so wish – so they can hold perpetrators accountable and hopefully prevent abusers from continuing to torment and abuse other workers.”

The legislation was co-led with Leyva by Ifeoma Ozoma, the former policy manager at Pinterest who went public with allegations of discrimination at the company in 2020, along with her colleague Aerica Shimizu Banks. Both alleged Pinterest did little to protect them from harassment inside and outside the company.

When making the choice to share her experiences at Pinterest, Ozoma said she had to weigh a number of concerns – prominent of which was whether she wanted to risk facing legal action for violating the NDA she had signed with the company. She said she does not want any other employees, in the tech industry or elsewhere, to have to face the same choice.

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“We want to make sure anyone who goes through something like this has the ability to speak up and the ability to hold people accountable without worrying about being sued into bankruptcy,” she said. “Any barriers to reporting are also barriers to accountability.”

In addition to legal and financial restrictions, NDAs also have a substantial emotional effect, Ozoma said. People experiencing harassment are further isolated being unable to share their experiences even with those close to them.

“Imagine leaving your job and not being able to tell anyone – even your spouse – why,” she said. “It’s trauma on top of the initial discrimination that you faced.”

The bill has received support from a number of labor and human rights organizations, including AI Now Institute, Color of Change, Times Up and Equal Rights Advocates. If passed, the bill would spark a wave of change in the tech world and beyond, affecting all workers in the nation’s most populous state.

While tech companies have become notorious for their use of strict NDAs in recent years, this bill would affect every industry in California, said Jessica Ramey Stender, the senior counsel at Equal Rights Advocates, and will be particularly beneficial to low-wage workers who do not feel they can negotiate NDAs they are served with when leaving a position. The bill is “critical” she said, because it allows workers to speak out about discrimination beyond sexual harassment.

“This legislation recognizes the reality that a lot of workers are experiencing intersectional discrimination based not just on their sex but also on other protected classes such as race or national origin,” she said. “SB 331 is an important step forward ensuring they can speak out about their whole experience as a woman of color, or a person with a disability, for example.”

“This is a broader issue of public accountability – consumers have a right to know whether a company has instances of discrimination or harassment,” she said.

SB 331 is set to be heard in the California senate in late March.