Non-Disparagement Clause Blocked by State’s Anti-Discrimination Law

The New Jersey Supreme Court has held that a non-disparagement clause that was part of a discrimination case settlement involving a former police officer and her former employer is unenforceable under state discrimination law.

An analysis of the case by attorneys Evandro Gigante, Laura Fant, Arielle E. Kobetz & Hannah Morris from the Proskauer law firm provides some background that explains this unusual decision. They note that in 2019 the New Jersey legislature amended the state’s Law Against Discrimination (LAD) “to permit plaintiffs to discuss details surrounding their employer’s alleged harassment, discrimination and/or retaliation, even after the plaintiff signs a settlement agreement releasing their claims.”

Specially, the amended law states that a provision in any employment contract or settlement agreement, “which has the purpose of concealing the details relating to a claim of discrimination, retaliation, or harassment (hereinafter referred to as a ‘non-disclosure provision’) shall be deemed against public policy and unenforceable.”

In this case, the plaintiff, a police sergeant, had alleged that her former employer engaged in sex discrimination, harassment, and retaliation in violation of the LAD. 

The authors note the Court’s decision, which reversed both the trial court and an appellate court, focused in part on the LAD’s legislative history, and the fact it was enacted in the wake of the MeToo movement in order to remove barriers to reporting abuse. 

“The New Jersey Supreme Court’s unanimous ruling,” the writers conclude, “makes clear that non-disparagement clauses in settlement agreements may not prevent a plaintiff from discussing the ‘details relating to a claim of discrimination, retaliation, or harassment,’ or they risk being found unenforceable by courts.”