On September 29, 2022, the New Jersey Assembly Judiciary Committee unanimously approved a bill that would ban non-disparagement provisions in employment agreements. As we previously reported in March 2019, a sweeping amendment to the Law Against Discrimination (LAD) was enacted to bar enforcement of non-disclosure provisions in employment contracts and settlement agreements. The law was in response to the #MeToo movement, which brought public scrutiny on the use of confidentiality clauses in employment agreements and the perception that such clauses enabled sexual harassment by silencing purported victims. Prior to 2019, confidentiality or non-disclosure provisions and non-disparagement provisions in settlement agreements for employment-related cases were a standard practice.
The renewed interest in restricting employment agreements comes after a recent New Jersey Appellate Division case that ruled that the 2019 amendment did not prohibit parties from entering into non-disparagement clauses that did not have the...
