The gag clause used to be a boilerplate line in severance agreements: you can't talk about your settlement, you can't disclose misconduct, you can't discuss your pay. Over the past five years that entire category has been reshaped by federal and state law. The 2022 Speak Out Act voided pre-dispute NDAs covering sexual harassment and assault. The NLRB's 2023 McLaren Macomb decision held that broad confidentiality and non-disparagement clauses in severance agreements violate the NLRA. SEC rules prohibit gag clauses that chill whistleblowing. California's STAND Act, New York's 5-XI and Section 5-336, and similar state laws have built a layer of protection on top. The practical result: many gag clauses an employer used even three years ago would be unenforceable today.
What's Still Enforceable in a Gag Clause Narrow confidentiality clauses that protect specific trade secrets or genuine confidential business information generally remain enforceable. Clauses that restrict discussing pay with coworkers are flatly illegal under the NLRA. Clauses that prohibit disclosing harassment , discrimination , or retaliation claims are void under federal and most state law.
Non-disparagement clauses that reach beyond a narrow truthful-statements carve-out are increasingly hard to enforce, particularly after NLRB's McLaren Macomb framework.
What Does the Speak Out Act Actually Do? The 2022 federal Speak Out Act renders pre-dispute NDAs and non-disparagement clauses unenforceable as to sexual harassment and sexual assault disputes arising after December 7, 2022. It applies to clauses signed at hire or during employment, not to post-dispute settlement agreements.
How NLRB and SEC Rules Further Restrict Gag Clauses The NLRB's McLaren Macomb decision in February 2023 made overly broad confidentiality and non-disparagement provisions in severance agreements unlawful, regardless of whether the employee is unionized. The decision reaches all covered employees (non-supervisors) under the NLRA.
SEC Rule 21F-17 prohibits any action that impedes an individual from communicating with the Commission about securities law violations. Gag clauses that could be read to prevent SEC whistleblowing trigger enforcement actions and fines that have reached eight figures.
How State Laws Layer On Additional Restrictions California (SB 331, the Silenced No More Act), New York (GOL 5-336), Washington (Silenced No More Act), Illinois (WTA), Maine, Oregon, New Jersey, and others have enacted statutes restricting gag clauses in harassment, discrimination, and retaliation contexts. Many go further than federal law and include requirements for clear statutory notice and opt-out rights.
The takeaway for a multi-state employer: the applicable restriction is usually the most employee-protective of the jurisdictions involved. A California employee's agreement must satisfy California law regardless of where the employer is headquartered.
Writing Severance and Settlement Agreements That Actually Hold Up Modern severance and settlement templates need a narrow confidentiality carve-out, explicit statutory exceptions (SEC, OSHA, EEOC, state agencies, union activity, sexual harassment claims), and scaled-back non-disparagement language. Running new templates through employment counsel in each major state is now table stakes. Beyond the legal question, the strategic point is that aggressive gag clauses mostly exist to paper over cultural problems. Investing in a credible investigation process, HR case management infrastructure, and anonymous reporting channels reduces the underlying claims that make broad gag clauses feel necessary. The EEOC's guidance on agreements is at eeoc.gov/laws-guidance .
.svg)
.svg)
