Does SB 331 apply to existing contracts?

SB 331 applies to agreements entered into on or after January 1, 2022. While it does not retroactively invalidate older contracts, any attempt to enforce an overly broad non-disparagement clause that violates public policy may still be challenged in court.

What specific language must be included in California settlement agreements?

Agreements must include specific statutory language stating that the employee is not prohibited from discussing or disclosing information about unlawful acts in the workplace.

A TermScore is an AI-generated risk rating from 0 to 100 that evaluates the fairness and risk level of any legal document. A score of 86-100 means the contract is highly favorable, while 0-30 indicates dangerous terms you should walk away from.

What types of documents can TermScore analyze?

TermScore analyzes any legal document including freelance contracts, employment agreements, residential leases, NDAs, brand sponsorship deals, SaaS vendor agreements, and rental applications. Upload PDFs, Word documents, or images.

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Are contract-based non-disparagement clauses enforceable for whistleblowers in California employment agreements?

Q: Are non-disparagement clauses enforceable for whistleblowers in California?

No. Under California's 'Silenced No More Act' (SB 331), employers cannot include non-disparagement clauses in employment or settlement agreements that restrict an employee's right to disclose information about unlawful acts in the workplace, including harassment, discrimination, or wage theft.

Are Non-Disparagement Clauses Enforceable for Whistleblowers in California?

In California, non-disparagement clauses are generally unenforceable if they prevent an employee from disclosing information about unlawful acts in the workplace. Under the 'Silenced No More Act' (SB 331), any provision that restricts an employee's ability to discuss harassment, discrimination, or other illegal conduct is void as a matter of public policy.

The Legal Landscape: SB 331 and the Silenced No More Act

California has aggressively curtailed the use of restrictive covenants in employment. The Silenced No More Act, which took effect on January 1, 2022, expanded upon previous legislation (the STAND Act) to ensure that employees cannot be contractually gagged when reporting illegal workplace activities.

What Constitutes an Unlawful Act?

For the purposes of SB 331, an "unlawful act" is broadly defined. It includes, but is not limited to:

Violations of the Fair Employment and Housing Act (FEHA).
Wage and hour violations, including unpaid overtime or misclassification.
Retaliation for reporting safety violations (OSHA).
Criminal conduct occurring within the scope of employment.

Key takeaway: If your contract contains a non-disparagement clause, it must explicitly carve out your right to report illegal activity. If it does not, the entire provision may be deemed unenforceable by a California court.

Action Item: Review your current employment agreement for a "carve-out" clause. If the language is absolute (e.g., "Employee shall not disparage the Company under any circumstances"), it is likely non-compliant with California law.

Comparison: Enforceable vs. Unenforceable Clauses

Feature	Enforceable Clause	Unenforceable Clause
Scope	Limited to trade secrets/proprietary info	Broad "no disparagement" of the company
Whistleblower Rights	Explicitly protected	Implicitly or explicitly restricted
Statutory Language	Includes required SB 331 disclaimer	Lacks required legal disclosures
Public Policy	Consistent with labor codes	Violates public policy

Requirements for Settlement Agreements

When an employer and employee enter into a settlement agreement, the rules are even stricter. Under California Code of Civil Procedure Section 1001, any settlement agreement that prevents the disclosure of factual information regarding sexual assault, sexual harassment, or discrimination based on sex is prohibited.

Mandatory Disclosures

To be valid, any agreement containing a non-disparagement clause must include the following language in substantially this form:

"Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful."
The agreement must provide the employee with at least five business days to consider the agreement.
The employee must be advised in writing to consult with an attorney.

Action Item: If you are presented with a severance agreement, do not sign it until you verify that the mandatory SB 331 language is present. If it is missing, the employer may be in violation of the law.

Risks of Overly Broad Clauses

Employers often include "catch-all" non-disparagement clauses to protect their reputation. However, in California, the risk of including these clauses is high. If an employer attempts to enforce an illegal clause, they may face:

Civil Penalties: Statutory fines for violating labor codes.
Voiding of the Agreement: The entire contract could be rendered void, potentially nullifying the employer's other protections (like non-solicitation or confidentiality).
Litigation Costs: Defending against a whistleblower retaliation claim is significantly more expensive than drafting a compliant contract.

Key takeaway: An unenforceable non-disparagement clause does not just fail to protect the company; it creates a roadmap for a whistleblower retaliation lawsuit.

How to Evaluate Your Contract

Before signing or attempting to enforce a contract, you must evaluate the specific wording of the non-disparagement provision. Look for "chilling effects"—language that discourages reporting to government agencies like the EEOC or the California Civil Rights Department (CRD).

Action Item: Use a systematic approach to audit your agreements. Ensure that any confidentiality or non-disparagement clause is narrowly tailored to protect only legitimate business interests, such as trade secrets, and does not touch upon employment conditions or illegal acts.

TermScore provides an automated, AI-driven analysis of your employment contracts to identify non-compliant non-disparagement clauses and missing statutory disclosures. By uploading your document, you can instantly determine if your agreement meets California's strict legal standards, ensuring you are protected before you sign.