Maine: New Restrictions on Employee Nondisclosure Agreements

Applies to:          All Employers with ME Employees

Effective:             August 8, 2022

“An Act Concerning Nondisclosure Agreements in Employment” (LD 965) recently went into effect in Maine. Specifically, employers are prohibited from requiring employees, interns, or applicants to enter into an agreement that waives or limits their right to report to discuss unlawful discrimination in the workplace.

Employers are also prohibited from requiring applicants, interns, or employees to enter into settlement, separation, or severance agreements that (1) limit their right to communicate with a federal or state agency that enforces employment or discrimination laws; (2) prevent an individual from testifying or providing evidence in a federal or state court proceeding in response to legal process; or (3) prohibit an individual from reporting conduct to a law enforcement agency. However, such agreements may prevent disclosure of factual information relating to a claim of unlawful employment discrimination if:

(A) the agreement expressly provides for separate monetary consideration in addition to anything that the individual is already entitled;

(B) the restriction mutually applies to all parties to the agreement;

(C) the agreement states that the individual maintains the right to report, testify, or provide evidence to federal or state agencies and testify and provide evidence in federal and state court proceedings; and

(D) the employer keeps a copy of the agreement for six years following execution of the agreement or the end of the individual’s employment, whichever is later.

Notably, the bill does not limit the use of nondisclosure agreements to protect trade secret or confidential or proprietary information. Violations are subject to fines or injunction; willful violations are subject to fine up to $1,000.

Action Items

1. Review the bill here.
2. Have nondisclosure, settlement, separation, and severance agreements reviewed by legal counsel for compliance.
3. Subscribers can call our HR Hotline at (833) 268-5531 for further assistance.