Utah Enacts New #MeToo-Inspired Law Related to Confidentiality Clauses

Utah joins the growing list of states, including California, New Jersey and New York, enacting their own #MeToo-inspired laws prohibiting confidentiality clauses regarding sexual misconduct. The #MeToo movement seeks to limit confidentiality requirements that would prevent information about serial sexual harassers from reaching potential victims. 

H.B. 55 adds a new section to the Utah Antidiscrimination Act providing that nondisclosure or non-disparagement clauses regarding sexual misconduct (sexual assault or harassment) required as a condition of employment are against public policy, void and unenforceable. Further, H.B. 55 prohibits an employer from retaliating against an employee for: (1) making an allegation of sexual harassment or assault, or (2) refusing to enter into an agreement or employment contract that contains such a nondisclosure or non-disparagement clause.

H.B. 55 also provides an employee three business days after agreeing to a settlement agreement including a nondisclosure or non-disparagement clause related to sexual misconduct to withdraw from the settlement agreement. Employers that attempt to enforce nondisclosure and non-disparagement clauses related to sexual misconduct in violation of these provisions cannot recover monetary damages for breach of the clause but will be liable for all costs and attorney fees the employee incurs as a result of the legal action.

H.B. 55 does not prohibit an agreement between an employer and employee who alleges sexual assault or sexual harassment from containing a nondisclosure clause, a non-disparagement clause, or any other clause prohibiting disclosure of: the amount of a monetary settlement or, if requested by the employee, facts that could reasonably lead to the identification of the employee. The law also does not prohibit an employer from requiring an employee to sign a post-employment restrictive covenant or agreement not to disclose an employer’s non-public trade secrets, proprietary information or confidential information that does not involve “illegal acts.”

The law makes clear that employees are not prohibited from discussing sexual misconduct or allegations of sexual misconduct in a civil or criminal case when subpoenaed if the misconduct or allegations of misconduct are against the individual whom the employee alleged engaged in the sexual misconduct. However, the law does not authorize an employee to disclose data otherwise protected by law or legal privilege or to knowingly make statements that are false or made with reckless disregard of the truth.

H.B. 55 passed the Utah House and Senate and went into law upon signature by Governor Spencer J. Cox on February 28, 2024. Notably, H.B. 55 provides a retroactive effective date of January 1, 2023. The statute does not impose an affirmative obligation on employers to notify employees who have signed agreements with nondisclosure and non-disparagement clauses related to sexual misconduct that these may be invalidated by the new law.

Employers with operations in Utah should review their employment, separation, severance and settlement agreements to ensure compliance with H.B. 55. In particular, employers should:

  • revise confidentiality clauses in general confidentiality agreements and company policies that could be considered to limit current employees from discussing sexual harassment or assault;
  • limit confidentiality clauses in settlement agreements of asserted claims of sexual harassment or assault to exclude communications regarding sexual harassment or assault unless requested by the employee;
  • if an employee requests confidentiality of the agreement, include a confidentiality provision covering sexual harassment or assault, but with a three-day revocation period for any such settlement agreement; 
  • review current EEO and harassment policies to confirm that an employee’s allegation of sexual harassment or assault is covered by the employer’s standard EEO and harassment policies, although employers may want to reference this requirement specifically in policies applicable to Utah employees; and
  • comply with the statutory requirements regarding settlement of an asserted claim of sexual harassment or assault even if the employer has fewer than 15 employees and would not otherwise be subject to the Utah Antidiscrimination Act.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.