August 2022: The State of Maine Implements More Restrictions on Non-Disclosure Agreements for Discrimination

16 Aug

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Update Applicable to:
All employers who have non-disclosure agreements in the state of Maine.

What happened?
On May 12, 2022, Governor Mills signed H.P. 711—Legislative Document (L.D.) 965 into law, which places restrictions on non-disclosure agreements (NDA) regarding discrimination.

What are the details?
Effective August 8, 2022, Maine’s new NDA law prohibits employers from requiring applicants, interns, or employees to enter into settlement, separation, or severance agreements that:

  • limit their rights to report, testify, or provide evidence to a federal or state agency that enforces employment or discrimination laws;
  • prevent them from testifying or providing evidence in federal or state court proceedings in response to a legal process; or,
  • prohibit them from reporting conduct to a law enforcement agency.

The new law further provides that settlement, separation, or severance agreements may include provisions preventing the subsequent disclosure of factual information relating to a claim of unlawful employment discrimination only if:

  • the agreement expressly provides for separate monetary consideration for the employee’s guarantee of nondisclosure that is in addition to any other compensation;
  • all parties to the agreement are subject to the nondisclosure requirement;
  • the agreement clearly states that the employee retains the right to report, testify, or provide evidence to federal and state agencies responsible for enforcing employment or discrimination laws, as well as the right to testify and provide evidence in federal and state court proceedings; and,
  • the employer retains a copy of the agreement for six years from the date the agreement is executed or the end of employment, whichever is later.
  • the agreement permits applicants, interns, and/or employees to waive or limit their right to report or discuss unlawful employment discrimination occurring in the workplace or at work-related events.

Unlike comparable laws in several other states, Maine’s new NDA law clearly states that its restrictions and requirements do not apply to nondisclosure agreements protecting the confidentiality of proprietary information, trade secrets, or information that is otherwise confidential by law, rule, or regulation (i.e., standard confidentiality agreements that prohibit disclosure of confidential and/or proprietary information, and trade secrets).

The Maine Department of Labor is responsible for enforcing the new NDA law, and employers that intentionally violate the law are subject to fines of up to $1,000.00.

While the newly enacted law did not come with any complimentary guidance, we anticipate the Maine Department of Labor issuing guidance. In the interim, employers may consider reviewing their nondisclosure, separation, severance, and settlement agreements to ensure compliance with Maine’s new restrictions and requirements.

For more information, please see the links below:

H.P. 711—Legislative Document (L.D.) 965

Article 1Article 2

What do employers need to do?
Employers should review the links above and may want to review their nondisclosure, separation, severance, and settlement agreements to ensure compliance with Maine’s new restrictions and requirements.

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