Restrictions on the use of confidentiality and non-disparagement agreements

In 2019, Virginia enacted a law prohibiting employers from requiring employees or prospective employees, as a condition of employment, to agree to a non-disclosure or confidentiality agreement that “has the purpose or effect of concealing the details relating to a claim of sexual assault.” (Va. Code § 40.1-28.01). Such agreements are void and unenforceable in the Commonwealth.

Effective July 1, 2023, House Bill 1895 (HB 1895) expands the scope of this law in two key ways.

First, HB 1895 provides that these agreements are also prohibited if they have the purpose or effect of concealing details relating to claims of sexual harassment. “Sexual harassment” has the meaning provided in Va. Code § 30-129.4, which defines the term as “unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature when such conduct explicitly or implicitly affects an individual's employment, unreasonably interferes with an individual's work performance, or creates an intimidating, hostile, or offensive work environment.”

Second, HB 1895 amends the law to cover non-disparagement provisions in addition to non-disclosure or confidentiality agreements.

The federal Speak Out Act, which President Biden signed into law in December 2022, also prohibits judicial enforcement of non-disclosure and non-disparagement clauses with respect to sexual harassment and sexual assault disputes, but the law applies only to agreements entered into before the dispute arose. HB 1895 is not limited to pre-dispute agreements; although, by its terms it applies only to agreements that are a condition of the individual’s employment. In other words, both the Speak Out Act and HB 1895 are unlikely to apply in the context of a separation agreement. For additional details on the Speak Out Act, please see this post.

Unpaid leave for organ and bone marrow donation

Under Senate Bill 1086 (SB 1086), Virginia employers with 50 or more employees are required to provide eligible employees with up to 60 business days of unpaid leave to serve as an organ donor and up to 30 business days of unpaid leave to serve as a bone marrow donor in any 12-month period. The new law does not specify whether employees working outside the Commonwealth count toward the 50-employee threshold.

Employees are eligible for leave under the new law if they (i) have worked for the employer for at least a “12-month period,” and (ii) have worked 1,250 hours during the preceding 12 months. While an employee is on covered leave, employers must maintain the employee’s health benefit plan coverage and pay out any earned commissions as they become due. Leave time may not be treated as a break in an employee’s continuous service for purposes of the employee’s right to salary adjustments, sick leave, vacation, paid time off, annual leave, seniority, or other benefits, and may not be taken concurrently with leave under the federal Family and Medical Leave Act (FMLA). When an employee’s leave for organ or bone marrow donation may also be covered by the FMLA, employers should consult with counsel to ensure the leave is properly designated.

Employers should also note that employees must be permitted to use paid sick leave or other available paid time off in lieu of unpaid leave.

Upon employees’ return from organ or bone marrow donation leave, employers must restore them to their former position, or a position with equivalent benefits, pay, and other terms and conditions of employment. Employers may, however, deny restoration of an employee’s position due to conditions unrelated to the employee’s rights under the law.

Retaliation against an employee for requesting or taking leave under the law, or alleging a violation of the law, is prohibited.

Knowing violations of the law can result in civil penalties of up to US$1,000 for the first violation, and, for subsequent violations within two years of a previous violation, US$2,500 for a second violation, and US$5,000 for each successive violation.

Limitations on the use of employees’ Social Security numbers

Senate Bill 1040 (SB 1040) prohibits employers from (i) using an employee’s Social Security number or any derivative thereof (e.g., the last four digits) as the employee’s identification number; and (ii) including an employee’s Social Security number or any derivative thereof on any identification card or badge, any access card or badge, or any similar card or badge issued to employees. Knowing violations are subject to a civil penalty of up to US$100 per violation.

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Virginia employers should promptly review their standard employment and confidentiality agreements, employee handbooks, and personnel policies for compliance with new 2023 employment laws. For more information regarding how these legal developments may impact your workplace, please contact the Hogan Lovells lawyer with whom you regularly work.