New Jersey Legislature’s Potential Response To The #MeToo Movement

Since the #MeToo movement captured the public’s attention, state legislatures across the country have proposed legislation banning the confidentiality of settlement agreements and mandatory arbitration of sexual harassment claims.

A comprehensive bill pending before the New Jersey State Legislature, Senate Bill S3581, goes farther, banning employers from including a jury waiver, mandatory arbitration clause, or non-disclosure provision in any settlement agreement or employment contract. Unlike many of the bills proposed in other jurisdictions, this prohibition extends to all potential discrimination claims under the NJLAD, not just to sexual harassment claims.

The Legislature’s effort to address the ongoing issue of workplace harassment by banning confidentiality in settlements ignores the fact that in some instances the complaining employee may want the settlement to remain confidential, not to mention the disincentive to employers to quickly and fairly resolve cases without engaging in protracted litigation. Given both the legislative and cultural climate changes brought on by the #MeToo movement, it is critical for employers to review their anti-harassment policies and employment, arbitration and settlement agreements to ensure they stay compliant with any legal developments in this changing area. More important, employers should develop a robust employee training program to educate employees about the wide array of unlawful behaviors that are prohibited in the workplace, and to demonstrate the Company’s commitment to eradicating these behaviors and fostering an environment that accords respect to all employees.