Utah: Confidentiality Clauses Restricted
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APPLIES TO All Employers with Employees in UT |
EFFECTIVE February 28, 2024 |
QUESTIONS? Contact HR On-Call |
Quick Look
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Discussion
HB 55 states that requiring employees to enter into a confidentiality clause regarding sexual misconduct, as a condition of employment, is against public policy and is void and unenforceable. A confidentiality clause includes nondisclosure or nondisparagement clauses that have the effect of prohibiting employees or former employees from talking about sexual assault or sexual harassment.
Employers also may not retaliate against any employee because they made an allegation of sexual harassment or assault, or if they refused to enter into a confidentiality agreement as a condition of employment. An employee may, within three business days after the day on which the employee agrees to a settlement agreement that includes a confidentiality clause regarding sexual misconduct, withdraw from the settlement agreement.
HB 55 does not prohibit confidentiality of the amount of a monetary settlement or facts that could lead to the identification of the employee. Employers may still require employees to sign a post-employment restrictive covenant or agree to keep confidential an employer’s non-public trade secrets, proprietary information, or confidential information that does not involve illegal acts. The bill also does not prohibit an employee from discussing sexual misconduct or allegations of sexual misconduct in a civil or criminal case when subpoenaed if the sexual misconduct or allegations of sexual misconduct are against the individual whom the employee alleged engaged in sexual misconduct.
An employer who attempts to enforce a confidentiality clause is liable for all costs, including reasonable attorney fees, resulting from legal action to enforce the confidentiality clause; and is not entitled to monetary damages resulting from a breach of a confidentiality clause. Although the bill went into effect February 28, 2024, by its own terms, it is retroactively applied to January 1, 2023.
Action Items
- Review HB 55 here.
- Have confidentiality clauses revised.
- Have appropriate personnel trained on the requirements.
- Consult with legal counsel regarding retroactive application of HB 55.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2024 ManagEase