Utah has enacted legislation (House Bill 55) which restricts certain nondisclosure and nondisparagement clauses. House Bill 55 is effective immediately and applies retroactively to agreements which are entered into on or after January 1, 2023.
Prohibited under House Bill 55, which expands the Utah Antidiscrimination Act, are:
- nondisclosure or nondisparagement agreements regarding sexual misconduct which are required as a condition of employment;
- an employer retaliating against a current or former employee that alleges sexual misconduct or refuses to enter into an agreement that is prohibited under House Bill 55; and
- a nondisclosure agreement that prevents (or has the effect of preventing) an employee from disclosing, discussing, or alleging sexual assault, sexual harassment, or sexual misconduct
The law allows an employee to withdraw from a settlement agreement that contains a nondisclosure or nondisparagement confidentiality clause related to sexual misconduct, provided they withdraw within three days after entering such an agreement.
House Bill 55 does not prohibit an employer from requiring an employee to:
- sign a post-employment restrictive covenant;
- agree not to disclose an employer’s nonpublic trade secrets, proprietary information, or confidential information that does not involve illegal acts; or
- discuss sexual misconduct or allegations of sexual misconduct in a civil or criminal case when subpoenaed, if the discussions are against the individual alleged to have engaged in the misconduct
The law also does not authorize an employee to disclose data otherwise protected by law or legal privilege, or knowingly make statements or disclosures that are false or made with reckless disregard of the truth. Employers with operations in Utah should review and revise confidentiality clauses that could be considered, to be limiting current employees’ discussion on sexual harassment or assault. These documents could include employment, separation, severance, settlement agreements, general confidentiality agreements and company.