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Committee advances bill limiting enforceability of nondisclosure agreements in employment settings
Summary
The committee moved Senate Bill 1035 to the floor. The bill would render nondisclosure provisions unenforceable where an employee reasonably believes the information concerns legally impermissible conduct — including discrimination, harassment, retaliation, wage-and-hour violations or sexual assault — and would make such NDAs void for
The Labor and Public Employees Committee voted to advance Senate Bill 1035, which would restrict the use and enforcement of nondisclosure agreements (NDAs) in employment contexts when an employee reasonably believes the covered disclosure concerns legally impermissible conduct.
Under the proposed language, an NDA would be unenforceable if it purports to prevent a current, former or prospective employee, or an independent contractor, from disclosing conduct that the person reasonably believes to be a discriminatory employment practice, harassment, retaliation, a wage-and-hour violation, or sexual assault, among other categories. The bill also states the provisions “shall be liberally construed so as to effectuate their remedial purpose,” and extends the protection to interns and volunteers in certain work-related contexts.
Debate focused on scope and legal effect. Opponents argued the bill would nullify voluntary settlement NDAs and deny employees the option to settle disputes privately in exchange for compensation. Representative Canino said such agreements can be part of a settlement process that spares victims a protracted public process and noted that the bill’s retroactive effect could render existing NDAs unenforceable. She said the measure would “take away” a tool that some victims prefer.
Supporters and the bill sponsor emphasized that NDAs have sometimes been used to conceal illegal conduct and that the state has an interest in not allowing confidentiality to hide ongoing wrongdoing. The bill would create a civil remedy enforced through CHRO and includes a statutory minimum penalty for violations.
Action: The committee moved to JFS Senate Bill 1035; the motion was made and seconded and roll-call votes were recorded but the clerk reported votes would be held open at the close of the session for members participating in other meetings.
Committee members asked detailed questions about scope — including whether the bill applies to off-site, employer-advertised events, volunteers, interns and whether the standard “reasonably believes” would create litigation risk and uncertainty for employers. Multiple members expressed concern the language is broad and could lead to increased litigation and unintended effects on private contracting.
