On May 11, 2022, “An Act Concerning Nondisclosure Agreements in Employment” (HP 711) was signed into law. The law is effective August 8, 2022. The law applies to all Maine employers. Under the law, employers are prohibited from requiring an employee, intern, or job applicant to enter into:
- A contract or agreement that waives or limits any of their rights to report or discuss unlawful employment discrimination, retaliation or harassment occurring in the workplace or at work-related events.
- A settlement, separation, or severance agreement with a provision that:
- Limits their right to report, testify, or give evidence to a federal or state agency that enforces employment or discrimination laws;
- Prevents them from testifying or providing evidence in federal and state court proceedings; or
- Prohibits them from reporting conduct to a law enforcement agency.
This bill allows a settlement, separation or severance agreement, under certain circumstances, to include a provision that prevents the subsequent disclosure of factual information relating to a claim of discrimination, retaliation or harassment.
Additionally, the law doesn’t limit the use of non-disclosure agreements to protect the confidentiality of proprietary information, trade secrets, or information that is otherwise legally confidential.
Penalties for Non-Compliance
The Maine Department of Labor has the duty to enforce these provisions and allows an individual to receive liquidated damages or to be employed or reinstated with back wages when an employer discharges or refuses to hire an individual who declines to enter into a contract or agreement that waives or limits any right to report or discuss discrimination, retaliation or harassment occurring in the workplace or at work-related events.
Next Steps for Employers
Employers who use agreements or contracts will want to review their documents to ensure they comply with the permitted exceptions within the legislation. As such, employers are encouraged to seek the assistance of legal counsel regarding the development of agreements and contracts and any questions or concerns they may have regarding current and/or future implementation of agreements or contracts.