Governor Brown recently signed Senate Bill 1586, which imposes additional restrictions on settlements of discrimination and harassment claims. It will become effective on January 1, 2023.

Currently, employers cannot enter into agreements – including severance, separation, and settlement agreements – that prevent an “employee or prospective employee” from disclosing work-related discrimination, harassment, or sexual assault, unless the employee requests such a provision. Similarly, an employer cannot include a no-rehire or non-disparagement clause unless it is requested by the employee alleging prohibited conduct. Those restrictions remain intact under Senate Bill 1586. But, the new law includes additional prohibitions and obligations employers must abide by.

Under Senate Bill 1586, employers:

• Cannot include a provision which prevents an employee from disclosing the amount or fact of any settlement, unless the employee asks for it;
• Cannot condition settlement on the employee’s request to include a nondisclosure, non-disparagement, no re-hire provision, or a provision disclosing settlement details; and
• Must provide a copy of their legally-compliant anti-discrimination and anti-harassment policy (such policy is already mandatory for all Oregon employers) to an employee before entering into an agreement with the employee.

Notably, Senate Bill 1586 clarifies that employers:

• May enter into an agreement with a non-disclosure, non-disparagement, or no re-hire provision that contains the aforementioned restrictions if the employer makes a good faith determination the employee engaged in prohibited discrimination, harassment, or sexual assault; and
• May enforce non-disclosure or non-disparagement provisions that are unrelated to discrimination, harassment, and sexual assault.

Other noteworthy changes under Senate Bill 1586 also include:

• The court may impose a civil penalty up to $5,000.00 for violating the law (on top of other damages);
• The law applies to former employees, not just to current and prospective employees;
• Contract provisions which violate this law are void and unenforceable; and
• A mediator must provide a copy of BOLI’s model anti-discrimination and anti-harassment policy to an unrepresented employee at mediation.