Utah has enacted legislation (House Bill 55), which restricts certain nondisclosure and non-disparagement clauses. House Bill 55 is effective immediately and retroactively applies to agreements that are entered into on or after Jan. 1, 2023.
The details
Restricted Agreements
House Bill 55 limits the terms of these agreements between an employer and an employee:
- A nondisclosure agreement that prevents (or has an effect of preventing), an employee from disclosing, discussing, or alleging sexual assault or sexual harassment (misconduct).
- A non-disparagement clause that prohibits (or has the effect of prohibiting), an employee from making a negative statement about the employer that is related to a claim or a dispute related to sexual misconduct.
House Bill 55
House Bill 55 expands the Utah Antidiscrimination Act to prohibit:
- Nondisclosure or non-disparagement agreements regarding sexual misconduct which are required as a condition of employment. Such provisions are unenforceable under the law.
- An employer from retaliating against a current or former employee that alleges sexual misconduct or refuses to enter into an agreement that is prohibited under House Bill 55.
The law also allows an employee to withdraw from a settlement agreement that contains a nondisclosure or non-disparagement confidentiality clause related to sexual misconduct, provided they withdraw within three days after entering such an agreement.
Exceptions
House Bill 55 does not prohibit:
- An agreement between an employer and an employee that alleges sexual misconduct from containing a nondisclosure or non-disparagement clause (or any other clause) that prohibits the disclosure of:
- An employer from requiring an employee to:
- An employee from discussing sexual misconduct or allegations of sexual misconduct in a civil or criminal case when subpoenaed if the discussions are against the individual alleged to have engaged in the misconduct.
The law also does not:
- Limit other reasons that may make a confidentiality clause unenforceable.
- Permit a disclosure that would violate state or federal law; or
- Authorize an employee to:
Next steps
Employers with operations in Utah should review applicable agreements and confidentiality provisions and consult legal counsel to help ensure compliance with House Bill 55.