On June 11, 2019, Governor Brown signed the Oregon Workplace Fairness Act ("the Act") into law. The Act brings significant changes for all employers with Oregon employees. The new law, which goes into effect this fall, has largely been described as a post-#MeToo measure aimed at significantly curbing confidentiality agreements related to sexual harassment and discrimination. But the Act is actually much broader than that. It also significantly expands the statute of limitations period for claims of employment discrimination and harassment, imposes new mandates for anti-discrimination policies, and provides a mechanism for employers to avoid severance obligations to departing executives and managers who are dismissed for harassment or discrimination. Key provisions of the Act are summarized below.
Many Agreements Containing Nondisclosure, Nondisparagement, and No-Rehire Provisions are Unlawful
It is now an unlawful employment practice in Oregon to include a nondisclosure or nondisparagement provision in an employment agreement if such provision has the "purpose or effect" of preventing an employee from disclosing or discussing conduct that constitutes unlawful discrimination or harassment in the workplace, at a work related event, and even outside the workplace.
The Act also severely restricts employers from entering into post-employment agreements—namely settlement, separation, and severance agreements—that include nondisclosure, nondisparagement, or no-rehire provisions with an individual claiming to be aggrieved by conduct that constitutes unlawful employment discrimination or harassment (including sexual assault). Such provisions are allowed only if:
- The aggrieved employee requests the provision, and
- The aggrieved employee is provided seven days to revoke the agreement after signing it.
The Act does not explain what constitutes a "request" sufficient to allow an employer to include a nondisclosure, nondisparagement, or no-rehire provision in an agreement with an aggrieved employee. Employers are encouraged to consult with legal counsel to determine when such provisions may be permissible.
Employers Must Adopt and Distribute New Written Anti-Discrimination Policies
All Oregon employers are now required to implement and distribute a written anti-discrimination and harassment policy with specific statutory requirements. At a minimum, the policy must:
- Provide a process for an employee to report prohibited conduct;
- Identify an individual designated by the employer to receive reports of prohibited conduct, including an individual designated as an alternate to receive such reports;
- Provide the statute of limitations period applicable to an employee's right of action for alleging unlawful discrimination or harassment;
- State that the employer may not require or coerce an employee to enter into a nondisclosure or nondisparagement agreement and include a description of the meaning of those terms;
- Explain that an employee claiming to be aggrieved by unlawful discrimination or harassment may voluntarily request to enter into an agreement containing a non-disclosure, non-disparagement, or no-rehire provision and that the employee has at least seven days to revoke such an agreement; and
- Instruct all managers and employees to document any incidents of unlawful discrimination or harassment.
The policy must be made readily available in the workplace and a copy must be provided to employees both (a) at the time of hire, and (b) whenever an individual complains of unlawful discrimination or harassment. BOLI will publish model policies on its website that employers can reference when updating their policies. Employers are also encouraged to consult legal counsel whenever implementing or updating a legally-required policy.
The Statute of Limitations on Many Discrimination Claims Increased from One Year to Five Years
The Act creates a five-year statute of limitations for claims of employment discrimination or harassment based on a wide range of protected classes, including race, color, religion, sex, sexual orientation, national origin, marital status, age, expunged juvenile record, uniformed service, and disability. This is a significant expansion from the prior one-year statute of limitations. While most of the act's provisions do not become operative until October 1, 2020, the expanded statute of limitations applies to conduct occurring on or after the effective date of the Act, which will be 91 days after the Legislature adjourns in June 2019.
In light of this change, employers should re-examine their document and electronic data retention policies and practices to determine whether they are taking appropriate steps to preserve evidence that could relate to claims based on conduct alleged to have occurred several years in the past. Employers should work with legal counsel whenever they create or update retention policies or practices.
Employers May Void Certain Mandatory Severance Agreements
The Act allows employers to void prior severance agreements with executives, managers, or supervisors when the employer determines, after a good-faith investigation, that the individual violated that act's requirements and the violation was a substantial contributing factor for terminating the employment relationship.
Next Steps for Employers
Employers can take the following steps to start preparing for the new law:
- Review and update anti-discrimination and harassment policies to bring them into compliance with the new law.
- Review and update confidentiality policies to include a carve out for disclosures of conduct that constitutes unlawful employment discrimination or harassment.
- Review and update document and data retention policies and practices to account for the expanded statute of limitations.