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California is leading the nation with a new law against non-disclosure agreements in settlement of sexual misconduct cases.
The law went into effect on Jan. 1, and is part of a legal overhaul that has spread across the country. In the wake of the #MeToo movement, all 50 states have passed laws surrounding sexual harassment, sexual assault, and non-disclosure agreements.
Under similar pressure from social media, large law firms also have pulled back agreements that would have prevented public disclosure of sexual harassment at the firms. Now they need to advise their clients to do the same.
According to reports, California was one of the first states to restrict non-disclosure agreements in settlements. The law, signed by Gov. Jerry Brown last year, bans NDAs in cases involving sexual harassment, sexual assault, or sex discrimination.
NDAs were exposed after the Harvey Weinstein scandal broke. Lawyers used the agreements to settle sexual misconduct cases on behalf of the disgraced media mogul.
Last year, New York endorsed a law that permits confidentiality clauses only if requested by the victim. It also took effect on New Year's Day.
The legal repercussions have spread quickly, affecting government, large companies and even law firms.
#MeToo and the Law
Munger, Tolles & Olson, a large California law firm, was one of the first to get the message. It abandoned mandatory arbitration agreements for its employees because social media said so.
The agreements had required summer associates to submit to binding arbitration for claims relating to employment -- including sexual harassment claims. Since then, social media has pushed other large firms to give up such agreements.
Meanwhile, California also effected a new law requiring publicly held companies to have at least one woman on their boards of directors.