On May 7, 2024, in the case of Savage v. Township of Neptune, the New Jersey Supreme Court determined that a non-disparagement clause relating to claims of discrimination, retaliation, or harassment in an employment agreement is against public policy and cannot be enforced. Less than one year later, Senate Bill No. 1688 (S1688), previously introduced in January 2024 as A4521, took another step forward in the legislative process; receiving approval by the senate committee.

Even though non-disparagement clauses have been commonly recognized by employers as an instrument to protect the value of a business’ reputation and goodwill, S1688 reinforces the decision in Savage to render these provisions unenforceable due to the chilling effect on pursuing claims of discrimination, retaliation, or harassment.

The proposed legislation seeks to ensure that no rights or remedies under the New Jersey Law Against Discrimination can be prospectively waived, stating:

A provision in any employment contract that waives any substantive or procedural right or remedy relating to a claim of discrimination, retaliation, or harassment, including, but not limited to, a non-disclosure or non-disparagement provision, or other similar agreement, shall be deemed against public policy and unenforceable.

The new legislation also extends the applicability of the prohibition to the terms of any collective bargaining agreement between an employer and the collective bargaining representative of the employees.

If enacted, the bill will take effect immediately, and apply to all agreements entered, renewed, modified, or amended on or after the effective date.

Campanella Law Office will be carefully monitoring S1688 as it progresses through the New Jersey legislative process. However, in anticipation of its enactment, if your business has not already reviewed its employment agreements in response to the Savage decision, it should be a priority to do so.

(This blog, prepared by Campanella Law Office, is for general informational purposes only and is not intended to convey specific legal advice, nor is it intended to create or constitute an attorney-client relationship.)