30 Trial Lawyer • Summer 2022 NDA Coercion Continued from p 29 does not request confidentiality and does not intend to do so.” In response, the employer’s lawyer either states the employer will not engage in settlement communications or provide a counteroffer unless and until the employee requests confidentiality, or counters at $X contingent on the employee requesting confidentiality. Furthermore, mediators have been engaging in similar practices on behalf of employers, conveying offers to employees during mediation that are contingent on the employee “requesting confidentiality.” That practice, whether or not a technical violation of SB 726, undermines the spirit of the law and leaves employees with no real choice at all. Clearly, the employee is not actually requesting confidentiality — the employee is being coerced into accepting confidentiality as part of a settlement agreement. The control regarding whether a confidentiality clause ends up as a term of the settlement remains with the employer, not the employee. Thus , even though an employee does not want or desire confidentiality, settlement becomes a nonoption without accepting confidentiality. This practice unfairly targets the economically disadvantaged, such as women, minorities and others with families, because these groups often cannot afford to turn down a settlement and really have no choice but to sell their silence.4 Recent fixes Thankfully, members of your OTLA Employment Section and Legislative Committee recognized these issues with SB 726 and worked with the AFL-CIO, who introduced a bill to the Oregon Legislature to fix these problems. As a result, the Legislature recently enacted important amendments to SB 726 to make clear that an employer commits an unlawful employment practice by conditioning a settlement on the acceptance of an NDA. Senate Bill 1586 (2022), effective January 1, 2023, makes SB 726 applicable to former employees and also adds “the amount of or any fact of settlement” to this list of NDAs that are 00permissible if requested by an employee.5 Importantly, SB 1586 clarifies it is a violation of Oregon law to “make an offer of settlement conditional upon a request” to include an NDA in the settlement agreement. It also makes it a violation of Oregon law to fail to provide the required notice to employees of their right not to enter into a NDA or be coerced into doing so. Mediators are also now required to provide employees with a notice of their rights not to enter into an NDA. Finally, any provision in violation of SB 726 is void and unenforceable, and employers who violate SB 726 are subject to a $5,000 penalty (in addition to existing private enforcement under ORS 659A.885). During the hearings on SB 1586, Jessica Giannettino Villatoro, Political Director of the AFL-CIO, explained the purposes of the amendments were to make it a “very clear violation of the law to make an offer of settlement conditional upon signing an NDA.”6 Giannettino Villatoro explained employers had not been complying with the purpose of SB 726. Even though a plaintiff’s counsel would inform the defense-side counsel that employers could not ask for an NDA in a settlement agreement, defense counsel would respond by stating that “you know all settlement is contingent upon receipt of confidentiality” and brush past the fact such practice was prohibited by Oregon law. “So we make it clear that you cannot request [an NDA] in that way.” Paloma Sparks, Vice President of Oregon Business and Industry, further explained that SB 1586 ensures that once requested by an employee, an employer would be able to enforce an NDA.7 “The requirement is the employee make that request, not the employer. So it’s putting the control about whether those provi-
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