Final Key Provisions of Oregon’s Workplace Fairness Act Take Effect October 1, 2020

In the summer of 2019, Oregon enacted the Oregon Workplace Fairness Act (SB 726), which imposed sweeping new requirements on Oregon employers in response to the #MeToo movement. Although some of the law’s provisions took effect in September 2019, the remaining provisions take effect on October 1, 2020. Oregon employers that have not done so already may want to take steps to ensure they are in compliance with all of the new requirements by that date.

Written Policy Requirements

Effective October 1, 2020, every Oregon employer must have a written policy in place that sets forth procedures for the reduction and prevention of sexual assault, discrimination, and harassment because of race, color, national origin, religion, sex, gender, pregnancy, sexual orientation, gender identity/expression, marital status, age, uniformed service, expunged juvenile record, or disability (i.e., “prohibited conduct” covered by the law).

While most employers already have policies in place prohibiting unlawful discrimination and harassment, the Oregon Workplace Fairness Act makes clear that such policies must apply to those specific categories of prohibited conduct covered by the law. It also makes clear that those prohibitions extend to conduct between employees that occurs in the workplace, as well as to conduct that occurs at an off-site “work-related event that is … coordinated by or through the employer” and to any conduct between the employer and employee that occurs off the employment premises.

The new law also requires that employer policies contain certain specific provisions, including:

• a process for employees to report prohibited conduct;
• the identification of an individual, and an alternate, designated by the employer as “responsible for receiving reports of prohibited conduct”;
• a disclosure of the statute of limitations period applicable to an employee’s claims based on prohibited conduct (i.e., five years for claims based on conduct occurring on or after September 29, 2019);
• a statement noting that “an employer may not require or coerce an employee to enter into a nondisclosure or nondisparagement agreement,” and including explanations of those terms;
• an explanation that an employee claiming to be aggrieved by prohibited conduct “may voluntarily request to enter into an agreement” that includes an otherwise prohibited nondisclosure, nondisparagement, or no-rehire provision, and that “the employee has at least seven days to revoke any such agreement”; and
• a statement “advis[ing] employers and employees to document any incidents involving [prohibited] conduct.”

The act further requires that employers:

• [m]ake the policy available to employees within the workplace;
• [p]rovide a copy of the policy to each employee at the time of hire; and
• [r]equire any individual who is designated by the employer to receive complaints to provide a copy of the policy to an employee at the time the employee discloses information regarding prohibited discrimination or harassment.

The Oregon Bureau of Labor and Industries (BOLI) recently published additional guidance, a model policy, and procedures that employers may use to implement the requirements of the Oregon Workplace Fairness Act. However, employers are not required to use BOLI’s template policy and may prepare their own written notices to comply with the new law. Employers may also consider incorporating their new policies into their employee handbooks.

Prohibition of Certain Nondisclosure, Nondisparagement, and No-Rehire Provisions

The Oregon Workplace Fairness Act provides that beginning October 1, 2020, it will be unlawful for Oregon employers to:

• “enter into an agreement with an employee or prospective employee, as a condition of employment, continued employment, promotion, compensation or the receipt of benefits, that contains a nondisclosure provision, a nondisparagement provision or any other provision that has the purpose or effect of preventing the employee from disclosing or discussing [prohibited] conduct”; or
• include a “no-rehire” provision in a separation, severance, or settlement agreement that would prevent an employee from seeking reemployment with the employer.

These prohibitions apply to all types of agreements, including those commonly included in confidentiality and nondisclosure agreements, employment agreements, separation agreements, severance agreements, and settlement agreements. However, the foregoing limitations do not prohibit nondisclosure or nondisparagement provisions that apply to matters other than conduct prohibited by the law. For example, the law does not prohibit employers from requiring employees to keep the amount of a severance or settlement payment confidential.

However, if voluntarily requested by the employee, an employer may enter into a settlement, separation, or severance agreement with the employee that includes one or more otherwise prohibited nondisclosure, nondisparagement, or no-rehire provisions, provided the agreement also provides the employee at least seven days to revoke the agreement before it becomes effective. An employer may also enter into an agreement with an employee that includes such provisions if it “makes a good faith determination” that the employee engaged in workplace conduct that constitutes sexual assault or discrimination or harassment covered by the law.

Additionally, the law provides that Oregon employers may require employees who are “tasked by law” to receive reports of such prohibited conduct to maintain the confidentiality of those reports. The statute does not specify which employees are “tasked by law” to receive reports, but it requires employers to designate one or more individuals to receive the complaints. Once designated, these individuals (for example, human resources employees and supervisors) are likely considered to be “tasked by law” to receive reports and exempt from the prohibitions on nondisclosure agreements. Notably, however, Oregon’s statute does not permit employers to require other employees who are participating in an ongoing investigation to maintain the confidentiality of alleged prohibited conduct during the pendency of the investigation. In those circumstances, it appears that Oregon employers may still express a preference—but not require—that employees maintain confidentiality during an open investigation.

If an employer violates the Oregon Workplace Fairness Act’s limitations on nondisclosure, nondisparagement, or no-rehire provisions, a current or prospective employee will be able to file a complaint with BOLI or initiate a private civil action and pursue claims for damages and attorneys’ fees.

Voidable “Golden Parachute” Provisions for Managers

Beginning October 1, 2020, Oregon employers will also have the option to void so-called “golden parachute” provisions (i.e., lucrative, mandatory severance packages that are sometimes negotiated as a term of employment agreements with high-level executives) with management employees who violate the Oregon Workplace Fairness Act.

Specifically, the law provides that any agreement with “a person with the authority to hire and fire employees, or the discretion to exercise control over employees, that requires severance or separation payments is voidable by the employer if, after the employer conducts a good faith investigation, the employer determines that the person violated” the Oregon Workplace Fairness Act’s prohibitions against certain nondisclosure, nondisparagement, or no-rehire provisions or the employer’s written policy prohibiting conduct covered by the law, and those violations were a “substantial contributing factor” in causing the person’s separation from employment.

The Oregon Workplace Fairness Act does not define “good faith investigation” or provide guidance on when a violation is a “substantial contributing factor” in causing separation from employment.

Extended Statute of Limitations

Although the provisions of the Oregon Workplace Fairness Act discussed above do not take effect until October 1, 2020, the law has already extended the statute of limitations from one to five years to file an administrative complaint or lawsuit based on prohibited conduct covered by the law occurring on or after September 29, 2019. Additionally, the five-year statute of limitations period applies to claims for a violation of the act’s prohibitions of certain nondisclosure, nondisparagement, or no-rehire provisions. Employers may want to consider reviewing and revising their document retention practices to reflect the increased five-year statute of limitations period that now applies to many employment claims.

For an in-depth discussion of the Oregon Workplace Fairness Act, join us on Monday, September 28, 2020, at 11:00 a.m. PDT for our webinar, “Oregon Update: Key Provisions of the Oregon Workplace Fairness Act Take Effect on October 1, 2020.” Register for this timely program here.