Governor Jerry Brown signs measure to limit use of non-disclosure agreements by defendants in settlements

Governor Jerry Brown signed AB 3109, by Assemblyman Mark Stone (D-Monterey), which would make a non-disclosure agreement void and unenforceable if it waives a party’s right to testify in an administrative, legislative, or judicial proceeding concerning alleged criminal conduct or sexual harassment.

The bill, born of the “#Me Too” movement, was introduced to protect parties from being forced into unwittingly giving up fundamental rights when they enter into settlement agreements, by making certain objectionable provisions unenforceable. Specifically, the bill targets pernicious provisions often used in settlements that prohibit a plaintiff from speaking about the underlying harm, even to the point of prohibiting testimony on criminal conduct or sexual harassment in judicial, administrative, or legislative hearings.

The bill was introduced after it was revealed that McKayla Maroney, an Olympic gymnast, was subject to a $100,000 fine for testifying in a criminal trial against a team doctor who sexually abused her and several other gymnasts.

The law becomes effective on January 1, 2019 and applies only to a provision in a contract or settlement agreement entered into on or after that date.