On March 24, 2022, Oregon Governor Kate Brown signed into law Senate Bill 1586, which amends Oregon's Workplace Fairness Act to further restrict what an employer may request in a settlement or separation agreement with an employee claiming discrimination under ORS 659A.030, 659A.082, or 659A.112. The amendments will be effective January 1, 2023.

Previously, the Workplace Fairness Act restricted employers from requesting, in both settlement agreements and separation agreements with employees claiming discrimination under certain statutes, confidentiality and non-disparagement provisions pertaining to conduct that allegedly would constitute discrimination, as well as no-rehire provisions. If an employee requested confidentiality, non-disparagement, or no-rehire, the employer was free to agree to it.

Senate Bill 1586 expands the restrictions to prohibit employers from requesting confidentiality about the amount of or fact of any settlement. Again, that confidentiality provision is still permitted upon the employee's request. Senate Bill 1586 also makes it a violation of the Workplace Fairness Act for an employer to make an offer of settlement or separation conditional upon a request by the employee to include any of these restricted terms.

Additionally, the new law will require that employers provide employees with whom the employer seeks to enter into a settlement or separation agreement a copy of the employer's anti-discrimination policy, which is described in ORS 659A.375. When an employer mediates claims or allegations covered by the Workplace Fairness Act with an employee who is not represented by an attorney, Senate Bill 1586 requires the mediator to provide the unrepresented employee with a copy of the model procedures and policies made available by the Bureau of Labor and Industries under ORS 659A.375.

The law clarifies that the Workplace Fairness Act does not prohibit an employer from enforcing a nondisclosure or non-disparagement agreement that is unrelated to alleged conduct that constitutes discrimination under ORS 659A.030, 659A.082, or 659A.112.

In light of the changes Senate Bill 1586 will make, Oregon employers would be well advised to immediately begin reviewing their template settlement and separation agreements so as to be ready for next year. Employers should also consult with their DWT employment attorney prior to negotiating or entering into a settlement or separation agreement with an employee.