Overview

Oregon SB 726, known as the Oregon Workplace Fairness Act (the “OWFA”), was passed by the legislature in 2019, effective October 1st, 2020. The OWFA will require major changes to employee/employer agreements and discrimination policies.  Employers in Oregon should immediately review and update their policies and agreements based on the law’s provisions.

The OWFA is part of a movement to increase transparency and provide additional workers’ rights in the wake of the #MeToo movement. Under the new law, employers are required to take affirmative steps to adopt compliant harassment policies, and it becomes unlawful discrimination to include non-disclosure, non-disparagement, and no re-hire provisions in employment documents (either routine employment agreements or settlements), with the exception of a settlement when confidentiality is requested by the employee. The law also extends the statute of limitations for discrimination, harassment, and sexual assault to five years. In order to comply with the new law, employers should review and update their templates for employment, develop new policies, and evaluate their practices to ensure they correspond with the categories of prohibited conduct and statute of limitations for claims.

-NEW LAW, NEW TERMS-

Key changes in law include:

  • It is now unlawful to enter into an employee agreement which prohibits the employee from discussing or disclosing discrimination, harassment, sexual assault, or the like.
  • The statute of limitations has been extended to five years for many unlawful discrimination claims, including harassment or discrimination on the basis of race, sex, religion, sexual orientation, and more. This five-year statute of limitations also applies to claims arising from the use of non-disclosure agreements that are prohibited by the Oregon Workplace Fairness Act.
  • All employers must adopt a written policy addressing steps to reduce discrimination and sexual assault and specifically disclosing employee rights, including the new statute of limitations.

-KEY CONSIDERATIONS-

Written anti-discrimination policy
All employers must adopt an anti-discrimination policy that, at a minimum, includes the process by which an employee who sees or is the target of unlawful discriminatory conduct, including sexual assault, can report the prohibited conduct. The written policy requirement is intended to notify every employee that they have a right to report wrongdoing that they observe. The policy must identify a person, and an alternate, in charge of receiving these reports and include the applicable statute of limitations (now five years). The written policy must also include a statement that explains the employee’s right to request to enter into a non-disclosure agreement in regard to the conduct, but must state that an employer can’t force an employee to enter into a non-disclosure agreement. The policy must also include a statement that advises employees to document any incidents of discrimination, harassment, or sexual assault. Employers must make the policy available in the workplace and provide a copy to each employee at the time of hire and at the time an employee discloses information regarding prohibited discrimination or harassment. To ease adoption of a written policy, BOLI has published a template policy that employers can reference.

Non-disclosure, non-disparagement, and no re-hire provisions
SB 726 makes it unlawful for an employer to force an employee to sign a non-disclosure, non-disparagement, or no re-hire agreement, or any agreement with a clause, that has the purpose or effect of preventing the employee from disclosing or discussing conduct that constitutes sexual harassment or discrimination. Specifically, non-disclosure, non-disparagement, and no re-hire provisions may not be included in relation to a hire, continued employment, receipt of a promotion or benefits, or a settlement between the employer and the employee. An agreement including non-disclosure, including one prohibited by the OWFA, could be entered into at the request of the employee themselves, but the law provides that the employee has a seven-day revocation period if the employee decides their signing was a mistake.

If an employer conducts a good faith investigation and finds the accused behavior was accurate, the employer is permitted to enter into a severance, separation, or settlement agreement with the employee who engaged in prohibited conduct (such as a harasser) which includes a non-disclosure, non-disparagement, or a no-rehire provision. This bill also allows for employers to void a severance, separation, or settlement agreement that provides for periodic or future payments with a higher up employee whom they later found (through a good faith investigation) had violated this new law if such violations were “a substantial contributing factor” in the decision to terminate.

-ADDITIONAL INFORMATION-

The full text of the bill is available here: https://olis.leg.state.or.us/liz/2019R1/Downloads/MeasureDocument/SB726/Enrolled.

-NEXT STEPS FOR EMPLOYERS-

Companies with employees in Oregon will need to review their existing employment agreements and templates to determine how best to proceed. If you routinely include a non-disclosure or confidentiality provision in employment agreements, it will be important to revise your templates. Going forward, employers will have to distinguish between confidential information of the employer, such as trade secrets and business plans, and observations of discriminatory behavior in the workplace which the employee has a right to disclose.

The Oregon Workplace Fairness Act specifically defines sexual assault as “unwanted conduct of a sexual nature that is inflicted upon a person or compelled through the use of physical force, manipulation, threat or intimidation.” Careful employers will review their handbook or policy to make sure that any definition they use in their policy comports with this statutory definition and includes other required statutory language (such as the five-year statute of limitations).

Employers should also consider who is best suited to receive complaints of discrimination, harassment, and assault, and make sure that the person(s) selected have appropriate training to receive such complaints.

Please contact Immix Law Group with any questions regarding this law and its effect on your business.