The Silenced No More Act (SB 331): What California Employers Cannot Include in Severance and NDAs

For decades, California companies routinely used strict Non-Disclosure Agreements (NDAs) and non-disparagement clauses in severance packages to buy the silence of departing employees. If an employee experienced racism, sexism, or unsafe working conditions, they were legally gagged in exchange for a payout. This changed drastically with the passing of the Silenced No More Act (SB 331). California has now made it abundantly clear that employers cannot use legal contracts to sweep workplace abuses under the rug.

This comprehensive guide breaks down the critical requirements of SB 331 for both employees and HR professionals in California. We will explore how factual disclosures of workplace conditions are protected, exactly what HR teams must update in their boilerplate templates, and the penalties for non-compliance. Because employment law shifts rapidly, we strongly recommend browsing our US Attorney directory to find a California labor lawyer to review your severance agreement or update your corporate policies.

What is the Silenced No More Act?

Expanding upon earlier #MeToo legislation, SB 331 amended Cal. Gov. Code § 12964.5 to aggressively restrict how employers draft severance, settlement, and separation agreements. The law expressly prohibits employers from requiring an employee to sign any provision that prevents them from disclosing factual information relating to claims of harassment, discrimination, or retaliation based on any protected characteristic (such as race, age, religion, sexual orientation, or disability), not just sexual harassment.

Factual Disclosures of Workplace Conditions

If an employee signs a severance agreement today, they generally still retain the absolute right to speak publicly about illegal acts they witnessed or experienced in the workplace. If an employer includes a broad non-disparagement clause saying, "You agree never to say anything negative about the company," it is legally void unless it includes a highly specific statutory carve-out. Employees can discuss their factual experiences with the California Civil Rights Department, Los Angeles, the media, or future employers without fear of being sued for breaching the NDA.

Boilerplate Severance Template Updates for HR

Human Resources professionals and corporate counsel must immediately update their separation templates. If your company uses a non-disparagement clause, SB 331 requires you to include this exact (or substantially similar) language directly in the contract:

"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."

Failure to include this disclaimer renders the entire non-disparagement clause void and unenforceable.

The Mandatory 5-Day Review Period

SB 331 also ended the practice of forcing "exploding offers" on departing workers. Under the law, employers must give employees a minimum of five (5) business days to review the severance agreement. Furthermore, the employer must explicitly notify the employee, in writing, that they have the right to consult with an attorney before signing. The employee can choose to sign the document before the five days are up, but the employer cannot pressure them to do so.

What Employers Can Still Protect

While SB 331 provides massive protections for workers, it does not mean all NDAs are illegal. Employers still have the legal right to protect their legitimate business interests. A severance agreement can still include non-disclosure provisions regarding the company's trade secrets, proprietary business information, client lists, and confidential financial data. Furthermore, under Cal. Gov. Code § 12964.5(e), employers are explicitly permitted to include and enforce confidentiality provisions regarding the severance amount paid in any severance or separation agreement, regardless of whether a formal lawsuit was ever filed.

Penalties and Costs for Non-Compliance

If an employer attempts to enforce an illegal NDA, or requires an employee to sign a non-compliant severance package, they expose themselves to significant liability.

Timelines for Resolving Severance Disputes

If you are handed a severance agreement that violates SB 331, your attorney can typically renegotiate the terms or demand a higher payout within the mandatory 5-day review period or shortly thereafter. If a company attempts to sue a former employee for breaching an illegal NDA, the employee's attorney can file an Anti-SLAPP motion in California Superior Court. These motions are designed to quickly dismiss frivolous lawsuits that aim to silence free speech, often resolving the dispute within 60 to 90 days and forcing the employer to pay the employee's legal bills.

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