United States: Oregon's New Workplace Fairness Act Limits The Use Of Nondisclosure Agreements, Requires Written Antiharassment Policies, And Extends The Time For Filing Claims

Oregon just enacted comprehensive legislation that will have a potentially surprising impact on most Oregon workplaces. On June 11, 2019, Governor Kate Brown signed into law Senate Bill 726, also known as the Workplace Fairness Act. The law creates a new unlawful employment practice that prohibits employers from entering into agreements containing nondisclosure, nondisparagement or similar confidentiality provisions. It also requires employers to adopt and disseminate specific written policies and significantly enlarges the period in which an employee may file a claim of discrimination.

Key Changes

  • Employers will be substantially limited going forward in their ability to enter into confidentiality agreements with employees that concern claims of discrimination, harassment or sexual assault.
  • The limitations period for many discrimination and harassment claims is being expanded from one to five years.
  • Specific written policies must be implemented by all employers including detailed information about an employer's procedure for addressing complaints of discrimination and the protections of the Workplace Fairness Act. Employers must provide the policy to employees when hired and whenever an employee makes a complaint about unlawful discrimination.

Restrictions on Nondisclosure Agreements

Starting October 1, 2020, it will be an unlawful employment practice in Oregon for an employer to enter into a nondisclosure, nondisparagement or similar confidentiality provision ("NDA") with an employee or applicant that prevents the individual from discussing discrimination or sexual assault that occurred at work or between employees. An individual right of action has been created, allowing employees to file administrative complaints or lawsuits for alleged violations.

A few exceptions apply. Employers may enter into a settlement or severance agreement that contains a NDA or no-rehire provision in two circumstances:

  • An employee claiming discrimination or sexual assault "requests" to enter into an agreement and is provided a seven-day period to revoke the agreement; or
  • An employee has engaged in unlawful discrimination or sexual assault according to the employer's good faith determination.

Employers also have some ability to void the employment contracts of "bad actor" managers who have terms requiring severance payments where the employer determines the manager engaged in unlawful harassment or sexual assault.

Statute of Limitations for Discrimination Claims Expands to Five Years

The Workplace Fairness Act also expands the current one-year statute of limitations for bringing claims under Oregon law for unlawful discrimination or sexual assault. Employees will have five years to file a complaint with Oregon's Bureau of Labor and Industries or a court for an array of claims of discrimination, harassment, or retaliation under Oregon laws covering multiple protected classes, including race, color, religion, sex, sexual orientation, national origin, marital status, age, uniformed service, and disability. This drastic change may not only increase the number of discrimination claims filed, but may also impact employers' strategies for defending claims and retaining evidence for this extended period of time.

Written Policies Required of All Employers

Under the Workplace Fairness Act, all employers in Oregon must now have a written policy containing procedures and practices for preventing discrimination and harassment. The new policy, at minimum, must include:

  • A process for employees to report discrimination and harassment;
  • Identification of the person(s) responsible for receiving complaints;
  • The five-year statute of limitation for bringing a claim of discrimination or sexual assault;
  • A statement that the employer may not require or coerce employees to sign an NDA;
  • An explanation that an aggrieved employee may voluntarily request to sign an NDA or no-rehire agreement and will have seven days to revoke the agreement; and
  • A statement advising employees and managers to document incidents of unlawful discrimination or sexual assault.

The law requires employers to make available the policy at all workplaces and to provide a copy to employees: (1) when hired; and (2) when an individual makes a complaint about prohibited discrimination or harassment.

For More Information

While the Bureau of Labor and Industries has until the end of the year to issue guidance on the new law, many changes go into effect this fall. Please contact your Littler attorney or Littler's Portland, Oregon office for advice, assistance with revising your policies, guidance on settlement agreements and other contracts, or if you have questions about the impact of this new law on your Oregon workplace.

On September 17, 2019, the Portland office will be hosting a Breakfast Briefing to comprehensively cover the new requirements of the Workplace Fairness Act and discuss strategies for implementation, mitigating risk, and reducing the likelihood and cost of discrimination claims. Employers interested in more information may click here for details on this event.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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