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Oregon Limits Settlement Agreement Terms Where Discrimination Alleged

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Like Washington, Oregon now prohibits what used to be common terms in many employment dispute settlements. In particular, under a relatively new amendment to Oregon law, employers cannot insist that a nondisclosure, nondisparagement, confidentiality, or no-rehire provision be included in a settlement or separation agreement when the employee has claimed discrimination under ORS 659A.030, 659A.082, or 659A.112. In fact, under the statute such provisions are only permitted if they are by the “employee’s request” otherwise the employer risks penalties of up to $5,000 if they do so.

SB 1586 amended the Oregon Workplace Fairness Act, ORS 659A.370, and defines such provisions as follows:

  • A nondisclosure or nondisparagement provision is one that has the purpose or effect of preventing the employee from disclosing or discussing the conduct that forms the basis for the claim of discrimination, or that would prevent the disclosure of the amount of or fact of any settlement; or
  • A no-rehire provision is one that would prohibit the employee from seeking reemployment with the employer as a term or condition of the agreement.

Given these new and fairly significant changes to previously standard terms, Oregon employers should make sure to update their policies and forms to be in line with these new limitations. In addition, new settlement or separation agreements may require careful tailoring to ensure that these provisions are not inadvertently included automatically, unless requested by the employee.