New California Bill Takes Aim at Non-Disclosure Agreements That Block Talk of Harassment

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The Capitol building in Sacramento in 2015.
A new bill introduced in Sacramento targets loopholes in non-disclosure agreements that block employees from speaking out about discrimination and harassment. So-called NDAs are common in Silicon Valley and Hollywood. (Craig Miller/KQED)

Silicon Valley is infamous for making prospective and departing employees sign agreements designed to prevent them from speaking out about just about everything. But in recent years, state lawmakers have been chipping away at that legal practice.

They go by many names: non-disclosure, non-disparagement and confidentiality agreements. Some you sign to get the job, some you sign on the way out. They’re all intended to keep people silent about what goes on behind closed doors. And while initially “NDAs” were mainly about protecting trade secrets, the #MeToo movement and the Black Lives Matter movement — along with the broader effort toward racial justice — have exposed the way the NDA also serves as corporate cover for illegal behavior.

"You can't fix a problem if you don’t know there’s a problem," said state Sen. Connie Leyva, D-Chino. She authored one of two laws passed in 2018 that made it illegal for companies to bar people from going public about misconduct involving sex or gender.

"If someone is not allowed to speak out about what happened to them, it’s never gonna change," she said. "Sure, if you're Coca-Cola and you don't want somebody giving away the secret ingredients, no problem. We understand that. But people should always have the right to be able to speak out against any form of discrimination."

Now, Leyva has introduced a new bill, Senate Bill 331, which casts a wider net — covering workplace discrimination involving race, ethnicity, age, disability and religion. Even, and perhaps especially, in a severance settlement.

"They’re multibillion-dollar corporations. If Pinterest decided to sue me, I would be bankrupted," said Ifeoma Ozoma, a former tech policy manager at Google, Facebook and Pinterest. Ozoma went public last year against Pinterest with allegations she was underpaid and subjected to racist comments and retaliation. These days, she’s lobbying for Leyva’s bill.

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"The agreements are written so broadly, you can’t even speak to your spouse about what happened. It really is a gag order, and it compounds the harm, because you’ve already experienced the discrimination, or harassment, you’ve been pushed out of your job, and you can’t even explain why you left," Ozoma said.

She added that even new agreements, which are crafted to comply with California's new laws about sexual and gender harassment and discrimination, are still written in language designed to confuse and intimidate. "I would not be surprised if folks who could not afford legal help or did not understand that the [new] statutes existed, think that they are under a gag order, even if they fall under those categories," Ozoma said.

Political analysts say you won't see individual tech titans openly oppose this bill, because when a political position is unpopular, California companies typically leave the public lobbying to groups like the Silicon Valley Organization, formerly the San Jose Silicon Valley Chamber of Commerce. But just a few months ago, that organization ousted its CEO over a racist campaign ad scandal.

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"I don’t think that you will get a lot of pushback anywhere in Silicon Valley on this type of legislation. That day is past," said Russell Hancock, president and CEO of Joint Venture Silicon Valley, a think tank in San Jose that studies the regional economy.

There’s been a well-established gap over the last half century between the progressive political rhetoric of Silicon Valley leaders and their companies' behavior behind the scenes with employees. But Hancock says the industry is facing increasing pressure to change from the outside, as well as the inside.

"Workforce, stock holders, other stake holders are becoming outspoken, vociferous and even demanding on management, workplace culture and other ethical issues," he said. "We've been famously non-unionized, a Wild West. That is actually starting to change, even at big companies. I don't mean to be naive or sentimental, but I think 2020 was an important year and people have come to feel differently."

The biggest Silicon Valley companies are multinational, employing hundreds of thousands of people far beyond the reach of California law. But as the #MeToo movement and the Black Lives Matter movement demonstrate, the court of public opinion is increasingly global.

"This bill covers every single form of workplace harassment or discrimination," Ozoma said. "I'm hoping this lays the groundwork for similar bills in New York and in other states, and maybe even at the federal level."