January 6, 2023

California’s CRD Releases FAQs on Employment-Related Agreements

The California Civil Rights Department (CRD (formerly the Department of Fair Employment and Housing (DFEH)) has issued FAQs providing guidance on California’s new limitations on confidentiality and non-disparagement clauses in employment, separation, and settlement agreements.

The laws regarding these types of agreements have been expanded over the past several years. The last expansion, SB 331 – known as the ‘Silenced No More Act’ – broadly limited the use of non-disclosure provisions in all types of employment-related agreements.

Effective January 1, 2022, SB 331 expanded restrictions on settlement agreements that prevented the disclosure of facts relating not only to allegations of sexual assault, harassment, discrimination or retaliation based on sex, but to allegations based on any protected classification under the state’s Fair Employment and Housing Act (FEHA).

The FAQs offer guidance on questions such as:

  • Can an employment or severance agreement prohibit an employee from talking about discrimination, harassment, retaliation, or other unlawful acts at work?
  • Can an employment agreement require an applicant/employee to give up claims or rights in exchange for employment?
  • Can a separation/settlement agreement prohibit an individual from disclosing the amount of severance/settlement received?
  • Can a settlement agreement include a “no-rehire clause?”

In addition to the above, FAQs also include specific examples of compliant and non-compliant language.