2019 Brings Bans on Certain Settlement Agreement Provisions

Chris Micheli
Chris Micheli is a Principal with the Sacramento governmental relations firm of Aprea & Micheli, Inc.

AB 3109 (Stone) takes effect on January 1, 2019 to make unenforceable any provision in a contract or settlement agreement that prevents a person from testifying in a judicial, administrative or legislative proceeding in response to a court order, subpoena or official request about alleged criminal conduct or sexual harassment. In addition, SB 820 (Leyva) prohibits a provision within a settlement agreement that prevents the disclosure of factual information related to specified claims or complaints in either a civil action or an administration action.

SB 820 allows plaintiffs in these actions to retain the right to request provisions in settlement agreements that shield their identity. The bill makes a provision in a settlement agreement that prevents the disclosure of factual information related to the claim, entered into on or after January 1, 2019, void as a matter of law and against public policy.

SB 820 applies if the claim relates to an act of sexual assault, sexual harassment, workplace harassment or discrimination based on sex, or retaliation for reporting harassment or discrimination based on sex. The bill does not prohibit the entry or enforcement of a provision of any agreement that precludes the disclosure of the amount paid in settlement of a claim.

The bill creates an exception, wherein it is not applicable if a party is a government agency or public official, for a provision that shields the identity of the claimant and all facts that could lead to the discovery of his or her identity, if the provision is included within the settlement agreement at the request of the claimant.

Chris Micheli is an attorney and legislative advocate for the Sacramento governmental relations firm of Aprea & Micheli, Inc. He can be reached at 916-448-3075.

 

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