California Non-Disclosure Agreement Violated Labor Law, Court Rules

Nondisclosure agreements, sometimes also referred to as confidentiality clauses, are written legal contracts between employers and employees, drafted with the purpose of laying out binding terms and conditions. These can include provisions like prohibitions on disclosing confidential and proprietary information. However, as our Los Angeles employment attorneys can explain, they are too often used in ways that many believe exploit the power imbalance between workers and employers. In some cases, employees have been compelled to sign away their right to pursue claims for wrongdoings like sexual harassment in the workplace. They may also include non-disparagement clauses that prohibit workers from speaking negatively about the company. Where NDAs are found to be overly-broad in scope, they may be deemed unenforceable.

Recently, a California judge ruled that the confidentiality agreements required of Google’s employees were too broad – in violation of the state’s labor laws. The ultimate impact of that decision is more workers and ex-workers may find it easier to speak openly about these firms.

The Washington Post reports the case in question involved a Google employee who took the company to court, arguing the nondisclosure agreement the company asked him to sign blocked him from talking about his job to other potential employers. Effectively, he argued, this amounted to a non-compete clause. Such provisions are unlawful in California. A Superior Court judge sided with the employee on this point, though declined to make a decision on allegations these NDAs also prohibited whistleblowing and worker exchange of wage information – also illegal in California.

That’s not necessarily the final say in the case. The decision is appealable, though it’s unclear whether Google will avail itself of that right.

There has been a long history in California and really throughout the United States of large companies compelling workers to keep their lips zipped about virtually every aspect of their jobs – sometimes even years they’ve left their positions. It’s especially ubiquitous at large tech companies in Northern California. NDAs have made it tougher to for claimants in certain discrimination cases to find fellow litigants – even when the perpetrator’s bad behavior is fairly widely known.

Lawmakers in California recently took aim at the sort of NDAs and confidentiality agreements that bar victims of sexual harassment and gender discrimination from talking publicly about their adverse treatment at work. Non-compete agreements are unlawful in California. As employment attorneys can explain, this recent ruling invalidates the portions of the at-will agreement that in essence were noncompete provisions, but it doesn’t necessarily break any new ground. Rather, the ruling is in line with the state’s long-standing policy that green lights employees leaving to work for other companies. The main right that was underscored here was employee mobility and allowing prospective workers the right to talk about their prior work experience.

Earlier in the case, the tech giant prevailed in convincing the judge to toss most of the initial claims, arguing they were superseded by federal law. But then the appellate court reversed, finding the case could proceed, affirming that California state labor laws are stronger than federal statutes in protecting employees’ rights to free speech regarding employers/former employers.

California’s “Silenced No More” act expressly outlaws confidentiality agreements for employment claim settlements that involve any type of harassment or discrimination. This is an expansion on existing employee protections in the state.