M E M O R A N D U M

TO: Members of the Assembly Appropriations Committee

FROM: Christina M. Renna, Senior Vice President, CCSNJ

RE:                         S-121 (Weinberg/Gill) / A-1242 (McKeon/Bramnick)

DATE:                    January 28, 2019

The Chamber of Commerce Southern New Jersey (CCSNJ) would like to voice our concerns S-121 (Weinberg/Gill) / A-1242 (McKeon/Bramnick), which bars provisions in employment contracts that waive certain rights, remedies and agreements that conceal details relating to discrimination claims.

S-121 (Weinberg/Gill) / A-1242 (McKeon/Bramnick) aims to eradicate sexual harassment and assault in the workplace at a crucial and long overdue time when the “#MeToo” and “#TimesUp” movements are dominating today’s culture and conversation.  Unfortunately, this legislation falls short of its intended goal with vague language that does not consider the potential negative outcomes for both the accuser and accused.  Additionally, it is written so expansively that any form of discrimination, retaliation or harassment – not just sexual harassment – would fall under it. Disputes that fall under these broad categories are the vast majority of disputes employers deal with regularly and removing a company’s ability to keep claims confidential could be paralyzing to an employer’s reputation, regardless of their veracity.

Employment disputes are far from uncommon.  Accusers face two choices when making a claim: agree to a monetary settlement with the employer that also allows them to maintain confidentiality throughout the process or take an employer to court.  There are benefits to both, the latter being that any potential “bad actor” in the employer community gets exposed in the court of law.

When faced with a claim, employers make a business decision as to whether to contest or resolve it and often times the choice is nothing more than a financial one; going to court is costly for both the accuser and the accused and settling is the smartest monetary decision for all parties involved.  However, should this legislation be enacted, there is little to no motivation for an employer to settle without a confidentiality provision, or an employer may choose not to settle at all and take an issue to court.  The reputation of a business is essential to its survival. The trust and confidence of the consumer can have a direct and profound effect on a company's bottom line. If there is no safeguard in place to protect a company’s reputation when an employee dispute arises, there is no real motivating factor to not take a dispute to trial.

Confidentiality agreements are important tools not only for the employer, but often times for the accuser. If a settlement is no longer an attractive option for an employer, the lawyers for opposing parties have the responsibility to present every piece of evidence and make every legal argument that might possibly benefit their clients. Pretrial discovery and other litigation procedures are designed to leave no stone unturned in the search for evidence – all of which will be made public during a trial. This is why often times the accuser prefers confidentiality during disputes.  However, as currently written, S-121 (Weinberg/Gill) / A-1242 (McKeon/Bramnick) is not clear if those accusers who want confidentiality agreements would still be allowed to engage in them or not. Furthermore, since a ban on confidentiality would be an attempt to regulate speech, it could potentially implicate First Amendment rights.

Additionally, there is already a mechanism in place where those harassed in the workplace can report instances even if a confidentiality agreement has been signed – that is filing a report with the U.S. Equal Employment Opportunity Commission (EEOC). In today’s climate with several high profile stories dominating the headlines of the day detailing habitual and egregious stories of sexual harassment, the EEOC do and would certainly continue to take these claims seriously.

Although well-intended, this bill will not prevent recidivism and eradicate sexual harassment in the workplace.  In fact, it may have the opposite effect if enacted and, as previously mentioned, could potentially violate First Amendment rights.

Thank you for allowing the CCSNJ to express our concerns with S-121 (Weinberg/Gill) / A-1242 (McKeon/Bramnick).