Under a new Louisiana law enacted on June 25, 2024, nondisclosure clauses required by an employer and agreed to prior to a hostile work environment dispute or sexual harassment dispute will be unenforceable. Louisiana joins the federal government and a growing number of states that have passed #MeToo-inspired laws restricting the use of nondisclosure clauses relating to sexual and other misconduct in the workplace. As a reminder, the #MeToo movement arose out of concern about the use of nondisclosure clauses to limit information about serial sexual harassers from reaching potential victims. Some of these laws provide broader coverage than the Louisiana statute, including prohibiting non-disparagement as well as nondisclosure clauses, and applying more broadly to other unlawful conduct such as discrimination, harassment, and retaliation based on race, national origin, age, religion, and other protected statutes in addition to gender.

House Bill No. 161 adds a new section to Louisiana Revised Statute §9:2717 “Contracts Against Public Policy” that renders any employer-required nondisclosure clause agreed to prior to a workplace misconduct dispute (hostile work environment or sexual harassment) unenforceable. H.B. 161’s definition of “hostile work environment” is broad and includes any condition where “harassment rises to a level that alters the ability of an employee to perform the employee’s duties.” H.B. 161’s definition of “sexual harassment” includes “unwelcome sexual advances, requests for sexual favors, and other sexually inappropriate conduct that affects an individual’s employment, unreasonably interferes with an individual’s work performance, or creates an offensive work environment.” It does not appear that the hostile work environment would be limited to a hostile environment based on sex.

The statute refers to nondisclosure restrictions between an employer and an employee, apparently limiting the covered nondisclosure clause to those signed during employment. There is no limitation in the statute on the duration of the prohibition against the validity of such clauses to employment. Thus, if the hostile work environment or sexual harassment dispute is asserted after the termination of employment, it appears that a nondisclosure clause required during employment could still be subject to the statute’s restrictions. Significantly, the text of the statute does not appear to apply to agreements entered into after termination of employment such as a non-disclosure clause included in a severance agreement signed by a former employee after termination of employment.

The law makes clear that it does not restrict the ability of an employee to enter into a confidential settlement agreement provided that the agreement is entered into after a report of hostility or harassment is filed, or a hostile work environment dispute or sexual harassment dispute has occurred. This exception is a common aspect of many of the #MeToo statutes, under the theory that victims of the subject harassment or discrimination may wish to have the events kept confidential.

Takeaways

Employers with operations in Louisiana should review their employment and separation agreements signed during employment to ensure compliance with H.B. 161. In particular, employers should consider:

• Revising confidentiality clauses in general confidentiality agreements and perhaps company policies (as it is not clear that the statute would apply to a policy that is not an “agreement”) that could be considered to limit current employees from discussing a hostile work environment or sexual harassment.
• Including a disclaimer in general confidentiality agreements and policies indicating that the nondisclosure provisions do not apply to hostile work environment or sexual harassments disputes that may arise in the future.
• Reviewing current EEO and harassment policies to confirm that they cover allegations of sexual harassment or hostile work environment as defined in this new law.
• Whether to include a general confidentiality agreement in any settlement agreement resolving hostile work environment or sexual harassment disputes.

It is not clear if a general disclaimer permitting discussion of hostile work environment or sexual harassment should be included in severance agreements signed after the termination of employment. This could be a moot point as the federal Speak Out Act¹ signed by President Biden on December 7, 2022, contains similar prohibitions against enforcing nondisclosure clauses entered into before a sexual harassment or sexual assault dispute arises. If the employer includes a disclaimer to comply with the Speak Out Act, that disclaimer would cover at least the prohibition against enforcement in sexual harassment or sexual assault disputes. An employer may want to expand the disclaimer to also reference hostile work environment claims, which could cover harassment or assault based on conduct other than sex.

An employer may wish to inform employees that any previously signed nondisclosure agreements will not be enforced in subsequent hostile work environment and sexual harassment disputes, although the statute does not specifically require such notice. Of course, the employer also should not attempt to enforce applicable nondisclosure agreements after a hostile work environment or sexual harassment dispute arises.

The statute becomes effective on August 1, 2024, by operation of law for all bills passed in the current legislative session. All agreements signed after that date will be subject to the statute as will all agreement previously signed that limit subsequent discussion of hostile work environment and sexual harassment disputes.

Please contact your employment counsel if you need assistance complying with this new Louisiana statute.

*Milo Young is a Summer Associate in Littler’s New York office.