Legal Definition of Settlement Agreements and NDAs

Federal Law Framework for Harassment Settlements

EEOC Settlement Authority: The EEOC can facilitate settlements at various stages: - Pre-complaint settlement: Informal resolution before formal EEOC charge filing - Investigation settlement: Resolution during EEOC investigation process - Conciliation: Formal settlement process after EEOC finds reasonable cause - Consent decrees: Court-approved settlements in EEOC litigation cases Private Settlement Requirements: For private harassment settlements to be legally binding: - Consideration: Each party must receive something of value - Knowing and voluntary agreement: Party must understand terms and agree freely - Legal capacity: Parties must have authority to enter binding agreements - Compliance with applicable law: Settlement terms cannot violate public policy Older Workers Benefit Protection Act (OWBPA): Special requirements for age discrimination settlements: - 21-day consideration period for individual agreements - 45-day consideration period for group termination programs - 7-day revocation period after signing - Clear, understandable language requirements - Disclosure of group selection criteria and eligibility factors

Non-Disclosure Agreement Legal Standards

Enforceable NDA Elements: For NDAs to be legally binding, they must: - Reasonable scope: Cannot be overly broad or vague in coverage - Legitimate business purpose: Must protect genuine confidential information or business interests - Consideration: Must be supported by adequate compensation or other valuable consideration - Public policy compliance: Cannot violate laws or prevent reporting to government agencies - Clear terms: Must clearly define what information is confidential and restrictions on disclosure NDA Limitations and Exceptions: Even valid NDAs typically cannot prevent: - Government reporting: Filing complaints with EEOC, state agencies, or other government entities - Whistleblower protection: Reporting violations of law to appropriate authorities - Criminal reporting: Reporting criminal conduct to law enforcement - Judicial proceedings: Responding to court orders or subpoenas - Attorney consultation: Discussing case with legal counsel under attorney-client privilege

Recent State Law Changes Affecting NDAs

State Legislation Limiting Harassment NDAs: - California: Prohibits NDAs in sexual harassment settlements unless victim requests confidentiality - New York: Prohibits NDAs in sexual harassment settlements unless victim prefers confidentiality - Illinois: Restricts NDAs in harassment and discrimination settlements - Washington: Prohibits certain provisions in harassment settlement NDAs - New Jersey: Limits enforceability of NDAs in discrimination and harassment cases Trending State Protections: - Prohibition of NDAs unless victim specifically requests confidentiality - Required disclosures about NDA implications and alternatives - Cooling-off periods for NDA consideration - Exceptions for discussing harassment with family, counselors, and attorneys - Prohibition of NDA provisions that prevent cooperation with investigations