During its 2024 legislative session, the Utah Legislature passed House Bill 55—Employee Confidentiality Amendments. HB 55, enacted at Utah Code § 34A-5-114, is a significant development that will require employers to review their form confidentiality agreements. This employee-friendly bill does three things:
First, HB 55 prohibits retaliation against an employee who refuses to sign a confidentiality agreement that prohibits disclosure about sexual assault or harassment.
Second, it renders void a confidentiality agreement—including non-disclosure and non-disparagement clauses—with an employee that prohibits disclosure about sexual assault or harassment. Employers may need to revise their form confidentiality agreements to add a disclaimer that disclosures about alleged sexual assault or harassment are not prohibited. The bill is retroactive to Jan. 1, 2023. Thus, employers also should consider amending confidentiality agreements executed on or after that date. For example, an employment agreement that includes a confidentiality clause could be revised as follows to disclaim that the term “Confidential Information” does not include sex assault or harassment:
Confidential Information. I recognize that the Company now possesses or will possess information of a confidential or secret nature in both written and unwritten form which has unique commercial value in the business in which the Company is engaged (hereinafter referred to as “Confidential Information”). Confidential Information for this purpose includes but is not limited to trade secrets, sales processes, computer programs, methods, data, know-how, improvements, inventions, techniques, marketing plans, product plans, strategies, forecasts, and customer lists, whether developed by me or others and whether belonging to the Company or to any of its customers or suppliers. The term Confidential Information shall not mean: (a) any information that is known by me prior to my employment, without an obligation of confidence; (b) any information that is publicly disclosed by the Company; or (c) information related to sexual assault or sexual harassment as those terms are defined under Utah Code § 34A-5-114.
A non-disparagement clause in an employment agreement (this one for a non-supervisory employee), could be revised as follows:
Non-Disparagement. I agree that I will never speak badly of, disparage, or otherwise make negative references to the Company, or its affiliates, employees, and agents, or the manner in which the Company does business, or the products or services marketed and sold by the Company to anyone who is not employed by the Company; provided that the obligations of non-disparagement that are set forth in this Section 4.1 shall in no way limit my ability to engage in the following activities: make a claim to enforce my rights hereunder, engage in concerted activity with or on behalf of other employees to improve my working conditions, speak with union representatives, obtain legal advice, report alleged discrimination, harassment, retaliation, or other misconduct to the Company or to federal or state agencies, or make a good faith report of a perceived violation of law to appropriate authorities, or to disclose information related to sexual assault or sexual harassment as those terms are defined under Utah Code § 34A-5-114.
Third, although it appears that a settlement or severance agreement with a former employee may prohibit disclosures about sexual assault or harassment, such an agreement may be revoked by the former employee within three business days. But note the conflict between the second and third aspects of this bill—any agreement that prohibits disclosure of sex assault/harassment “as a condition of employment” is void, but a settlement agreement that prohibits such disclosures is merely revocable within three business days. To avoid potential conflict, consider disclaiming in your settlement and severance agreements that any non-disclosure or non-disparagement clause limiting disclosures about alleged sex assault or harassment is expressly “not a condition of employment.” Additionally, although HB 55 does not require an express disclosure about the revocation right (the bill is silent on this point), cautious employers will add a three-day rescission right like this for under-40-year-old individuals (those 40 years old and older should already have a seven-day revocation period per the federal Older Workers Benefit Protection Act):
Revocation. Employee understands that they may revoke this Agreement for a period of up to three (3) business days following signature of the same. Any revocation within this period must be submitted in writing to Employer’s undersigned representative and must state, “I hereby revoke my acceptance of the Agreement.” Employee understands that if they revoke this Agreement, they are not entitled to receive the consideration provided by this Agreement.
