Certain Non-Disclosure Agreements May Become a Thing of the Past in Massachusetts

As an attorney who has settled hundreds of cases over the years, I can tell you that virtually all settlement agreements – irrespective of the type of case to which they pertain — have clauses concerning non-disclosure and non-disparagement issues. Such clauses tend to make certain settlements easier to achieve since the defendant(s) don’t have to worry about widespread exposure for having done something illicit.

A newly proposed Bill (H 1778) in the Massachusetts House of Representatives may change that dynamic in certain types of cases. The proposed Bill would modify Chapter 151B of the General Laws and is entitled: “An Act concerning nondisclosure agreements relative to sexual harassment and discrimination.”

Section 11 of the proposal states:

Notwithstanding any general or special law to the contrary, a settlement agreement or a provision within a settlement agreement that prevents the disclosure of information related to a claim filed in a civil action or a complaint filed in an administrative action, regarding any of the following, is prohibited…

The Bill then lists various types of claims:

1. a sex offense between employer and employee occurring in the workplace or at work-related events off the employment premises[;] 
2. and act of sexual harassment between the employer and an employee in the workplace or at work-related events off the employment premises[;]
3. a discriminatory act based upon sex, gender identity, or sexual orientation between the employer and an employee[;]
4. an act of retaliation against someone reporting any incident described in 1 -3 above. Or retaliation against a person cooperating in the investigation of any such incident.

Notwithstanding the above-described incidents, provisions shielding the claimant/victim and all facts which could lead to the discovery of the claimant/victims identity, may be shielded by such an agreement.

The Act also applies to agreements entered into before its effective date such that information held by the claimant/victim may be disclosed despite an existing nondisclosure agreement without loss of consideration. 

Similar bills have been considered in the past but have not become the law of the state. While the considerations for passing such a bill are legitimate, the bill as written may make it more difficult to settle the types of offenses referenced above.