A Few Thoughts About Oregon's Workplace Fairness Act

Oregon’s SB 726, the Workplace Fairness Act, is in my opinion the most significant new law to affect employer-employee relations that takes effect in 2020. This will alter two subject matter areas immensely. While you should get legal guidance before taking the steps I suggest below, you should be aware of what those steps are regardless.

First, the statute of limitations for claims including an anti-discrimination or sexual assault component are increased to five years. Previously, the limitations period was one year. This is in step with a similar extension also taking effect in California.

Second, employers may not require nondisclosure or nondisparagement provisions in a variety of agreements with employees, most importantly with releases associated with terminations. The law indicates that employees may initiate a request for such a term, and there are many plausible situations in which one might imagine an employee finding such a term to their advantage. So in theory the release of claims might include a nondisclosure or nondisparagement term, but there’s going to be some careful handling of that situation needed and I really don’t want to see any of my clients try and navigate that on their own. For now, if you use a standard release term as part of your offboarding or smooth exit strategies, check the language of that release and strongly consider getting counsel to double-check it, so you don’t put a term of an employment release like that on the table as a result of a legacy practice.

For my part, I don’t read the law as excluding employer-proposed “neutral reference” provisions. An Oregon employer remains free to adopt a blanked all-neutral-reference policy (and, in my opinion, probably is making a safe bet in so doing); a promise to give a neutral reference is not a statement that a non-neutral reference would be disparaging and it does not withhold information from third parties. Obviously there are certain negotiation postures I’ll avoid now, such as angling for a nondisparagement agreement back from the plaintiff (unless offered by the plaintiff as a bargaining chit). But I do think that I shall leave the initiation of a neutral reference term to the plaintiff’s attorney in a negotiation until at least a late stage, relying on the fact that competent plaintiff’s counsel will not hesitate to raise the issue in an appropriate way, based on her client’s needs and concerns.

Also you should note that this law applies to agreements with prospective employees, not just existing or former employees releasing claims in exchange for consideration. So, in the event that you bind prospective employees to non-disclosure agreements during the hiring process for whatever reason, that’s a policy and practice that will need to change. We can work with you to find some way of evaluating a prospective employee that does not involve their handling of proprietary information and thus require the use of a nondisclosure agreement.

Third, employers need to create and adopt written policies addressing discrimination and sexual assault. Your policy must do the following, at minimum:

  • provide a process for employees to report prohibited conduct, specifically claims of discrimination or sexual assault;
  • identify the person, and an alternate person, to whom employees should report prohibited conduct;
  • state the applicable statute of limitations for the employee to bring a legal claim (in most cases, that’s five years now);
  • include verbiage advising that you, as the employer, may not and do not require or coerce an employee to enter into a nondisclosure or nondisparagement agreement that prevents the employee from discussing discrimination or sexual assault that occurred at work or between employees;
  • notify employees that they may request that a nondisclosure or nondisparagement clause be included in agreements relating to claims of discrimination or sexual assault, and that if they do choose to include a nondisclosure or nondisparagement clause, the employee has seven days after the agreement is signed to change their mind before the agreement becomes final; and
  • include a statement advising employers and employees to document any incidents involving covered discrimination or sexual assault.

Several of the above provisions were things that I have previously advised clients to include as “best practices,” but were not required by law. The floor has been raised now, and what used to be an aspiration is now a minimum standard. This suggests that the future will hold different and even more stringent standards for “best practices.” It’s going to take time, strategic thinking by human resources professionals and counsel, and action by regulatory agencies such as BOLI before new best practices are settled.

Check your document retention policies! If your business employs people in Oregon, you should be retaining your employment and discipline records for six years (one beyond the limitations period, just to be safe in case a potential plaintiff claims some sort of tolling) beyond the date of the employee’s termination. (You are keeping separate employment and discipline files already, I hope!)

Take a few minutes to discuss the implications of this new law with your commercial insurance broker. Your EPLI and D&O policies are implicated by this new law, so be sure you understand what your policies cover and where you are bare. Remember that a declarations page is not the entire insurance policy.

This is not the only significant new employment law to take effect in 2020 in Oregon. In upcoming days, I plan to write further about other new laws. Depending on your situation, what I’ve identified here as the most critical new piece of legislation that is likeliest to affect the most employers might be eclipsed by other new laws affecting (among other things) family leave or compensation equity.

It’s a minefield out there, and your good intentions alone are not enough to protect you from risk. We can help you navigate into the safe harbors, and keep your attention focused where it ought to be: improving and growing your business.