A new law in Utah limits employers’ ability to stop workers from disclosing details about sexual misconduct in the workplace.
The #MeToo-inspired bill—signed by Governor Spencer Cox on March 13, 2024—adds Utah to the growing list of states that are putting limits on how employers use non-disclosure and non-disparagement agreements. Here everything you need to know about the new law:
What Utah’s new NDA law prohibits
The new law bans employers from requiring employees to sign non-disclosure or non-disparagement agreements related to sexual misconduct as a condition of employment.
In other words, employers can’t tell Utah job applicants they won’t hire them unless they sign an NDA that prohibits disclosure of facts related to sexual assault or sexual harassment. The new law also makes it illegal to retaliate against an employee for reporting sexual harassment or sexual assault, or for refusing to sign an agreement that the new law prohibits.
The law is retroactive and applies to any NDA or non-disparagement agreement entered into on or after January 1, 2023. Employers that try to enforce a non-disclosure or non-disparagement provision that violates the law will be liable for all costs and attorneys’ fees resulting from a lawsuit they bring to enforce the unlawful provision.
What the new law still allows
Not all non-disclosure or non-disparagement agreements are banned under the law. Employers are still free to enter into NDAs with Utah employees that protect their proprietary or other confidential business information. Employers and employees may also agree to confidentiality provisions in a settlement agreement that the law would otherwise ban, but the law gives employees three days after signing the settlement agreement to withdraw from it.
The new law also allows an employer and employee who has alleged sexual misconduct to agree to a confidentiality provision that prohibits disclosure of any settlement amount. Upon the employee’s request, the employer and employee can also agree to not disclose facts that could reasonably lead to the identification of the employee.
What employers should do next
The new law applies to Utah employees. Businesses with Utah employees—even if the employer is based in another state—should do the following:
- Audit their form NDAs for language that would no longer be compliant with Utah law (SixFifty can automate this process for you)
- Review any NDA entered into on or after January 1, 2023 with a Utah employee
- Ensure that their non-disclosure and non-disparagement provisions are not drafted so broadly that they could be interpreted to prohibit disclosure of sexual misconduct.
Ideally, these provisions should contain explicit disclaimers that they are not intended to prohibit disclosure of facts related to sexual misconduct.
Finally, employers shouldn’t include non-disclosure or non-disparagement provisions related to sexual misconduct in settlement agreements unless the employee requests it. These types of settlement agreements should include language informing the employee that they have three days to withdraw from the settlement agreement.
Stay compliant with SixFifty’s NDA tools
Like many areas of employment law, NDA laws are evolving rapidly. There can be real consequences for employers who (whether intentionally or not) enter into overly-broad NDAs or try to enforce unlawful NDAs. Employers should also note the many other states that put limits on NDAs, including California, Illinois, Maryland, Nevada, New Jersey, New Mexico, New York, Oregon, Tennessee, Vermont, and Washington.
If staying on top of constantly changing, state-specific laws seems like a chore, we’re here to help you stay compliant.
SixFifty’s Employment Docs platform helps organizations protect themselves by ensuring your NDAs (and dozens of other employment documents) are always up-to-date with the latest developments in the law.
