This new law protects CA workers with NDAs alleging discrimination
Tech companies have relied on nondisclosure agreements (NDAs) for decades to maintain their competitive advantage, inserting confidentiality clauses into employment contracts and severance agreements in the name of protecting trade secrets. But in recent years, NDAs have become common practice across industries, in many instances giving cover to powerful people accused of harassment, or workplaces rife with misconduct.
This proliferation of NDAs in tech and beyond means that when people do choose to come forward with allegations in spite of a confidentiality agreement, they risk significant legal and financial repercussions. So in 2018, amid the #MeToo movement, California legislators passed a law that protected any workers bound by such agreements who choose to speak out about sexual misconduct or gender discrimination.
Now, a new bill significantly expands those protections: In October, California Governor Gavin Newsom signed the Silenced No More Act, which bans the use of confidentiality and non-disparagement clauses in settlements or severance agreements to silence workers who have experienced any kind of harassment or discrimination.
The Silenced No More Act, which goes into effect today, will protect workers like Ifeoma Ozoma and Aerica Shimizu Banks, tech whistleblowers who helped draft and sponsor the bill after they went public with allegations of race and gender discrimination at Pinterest. When they left Pinterest, Ozoma and Banks, both of whom are Black, had signed NDAs as part of a severance agreement, which left them vulnerable to a potential lawsuit if they violated the terms of their deal. In June 2020, they decided to come forward anyway since they would be partially shielded by the existing legislation in California. But it was still a significant risk to disclose allegations of race discrimination, which were not explicitly protected under the law.
Unlike its predecessor, the Silenced No More Act acknowledges the wide range of harassment and discrimination that people of color (and all other marginalized workers) might face, rather than focusing on white women, who largely had become the face of the #MeToo movement. “This was an opportunity to really serve the needs of the most marginalized and the most exploited—those who face this intersectional discrimination,” Banks says. “I hope it is enforced in a way that empowers people at the intersections to use the protections now granted by this bill: people of color, particularly marginalized identities, and LGBTQ folks and non-binary folks.”
The law’s intersectional approach also extends to employment status: The Silenced No More Act may have been catalyzed by employee activism in the tech industry, but countless other workers in California now stand to benefit from the legislation, including contract workers and hourly employees. (The Silenced No More Act does not, however, retroactively apply to workers who have already signed NDAs—unless a company has stated otherwise, as Pinterest recently did; that said, the potential public backlash could deter companies from suing an employee who does speak out.)
“Whether they’re a C-suite executive or an hourly worker, this impacts everyone who has an employer or an employment agreement in the state,” Ozoma says. “So, though the focus has been on the tech industry because that’s my background, this impacts people far beyond the industry, which was really important for me. And it also impacts all of the contract workers who work for tech companies in California.”
But many tech companies have a significant presence outside of California—even more so amid the pandemic—which raises the question of how they will treat employees who work remotely or are based in another office and therefore not automatically protected under the new law. Most tech companies had not shown public support for the Silenced No More Act (with the exception of Pinterest, which has been under a microscope between the allegations brought by Ozoma and Banks—a $22.5 million settlement in response to a gender discrimination lawsuit filed by its former COO—and a shareholder suit over its workplace culture that was recently settled).
In an effort to pressure some of tech’s biggest players to adopt this policy company-wide, Ozoma and other advocates have convened a coalition called Transparency in Employment Agreements, which has urged companies like Apple and Google to standardize employment and separation agreements across its workforce by adding language that reflects the new California law.
“Twilio agreed pretty soon after we asked them, and I thought their response was incredibly thoughtful about wanting to be an anti-racist company and this being totally in line with that,” Ozoma says, adding that Expensify and Pinterest had also agreed to the policy change. “The response from others, and the lack of response, has been totally what you would expect from this industry, and what we as the coalition expected.”
As a next step, the coalition is now urging shareholders to demand action from these companies, by filing shareholder resolutions against Meta, Alphabet, Amazon, Etsy, Salesforce, Twitter, and IBM. The coalition already employed this strategy with Apple, whose response to the shareholder resolution claimed “the company’s policy is to not use such clauses,” which led former Apple engineer Cher Scarlett to file a whistleblower complaint with the SEC; Scarlett alleged Apple had offered her a separation agreement with a confidentiality clause as recently as October.
“A trillion dollar corporation like Apple can lie to the SEC, lie to shareholders, lie to the public,” Ozoma says. “And unless we pursued it—and we have relentlessly and will continue—there’s no recourse.”
Other advocates are trying to close this gap in employee protections by pushing for legislation outside of California, inspired by the Silenced No More Act. In Washington, state senator Karen Keiser has introduced a new bill to expand whistleblower protections, which draws on the experiences of Scarlett, ex-Google AI ethics researcher Margaret Mitchell, and Chelsey Glasson, who sued Google over allegations of pregnancy discrimination. Much like the California act, it builds on existing #MeToo-era legislation that Senator Keiser sponsored to help protect workers against sexual misconduct and empower them to speak out by barring NDAs as a condition of employment. The new bill expands those protections to all types of harassment and discrimination.
??”I don’t expect a big fight,” Senator Keiser says, noting that she doesn’t expect to see Google or Microsoft or any other big tech company make an appearance at the hearings. “The usual approach some of our employers take on these kinds of issues is to not testify, but to work behind the scenes to plant seeds of doubt.” She is also working with a colleague in the House of Representatives, Liz Berry, on the issue of confidentiality clauses in settlement agreements, where she previously faced pushback from advocates of victims who wanted to keep settlements private. “I’m not sure about the settlements, but we’re going to make progress,” she says. “I’m convinced of that.”
When the legislative session starts in January, Glasson and other advocates in Washington State will testify in support of the new bill, sharing their own difficult encounters with misconduct and retaliation at tech companies. For Glasson, who has spent well over two years mired in a legal dispute with Google, it’s an opportunity to use her experience to create positive change and help other workers demand accountability.
“Being on the receiving end of misconduct in tech and in other industries ruins lives,” Glasson says. “The people who reach out to me talk about how their careers were ended. They can no longer emotionally handle working in tech. They’re struggling with anxiety, depression, and in some cases thoughts of suicide. Because NDAs were involved, many of the people can’t take action; they can’t share their stories. There’s ultimately no resolution for them, and that’s horrific. So [this] legislation will provide paths and opportunities for people to share, for people to fight, for people to take the path that’s appropriate for them, so they can heal and move on with their lives.”
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