Virginia Expands Nondisclosure Agreement Law to Include Sexual Harassment Claims

On March 26, 2023, Governor Glenn Youngkin signed HB 1895 into law which will amend Virginia Code § 40.1-28.1, entitled, “Nondisclosure or confidentiality agreement; provisions regarding sexual assault; condition of employment” (the “NDA Law”). In its current form, the NDA Law restricts employers from requiring actual or prospective employees “to execute or renew any provision in a nondisclosure or confidentiality agreement that has the purpose or effect of concealing the details relating to a claim of sexual assault.”

Once the HB 1895 amendments become effective on July 1, 2023, the NDA Law will expand to include agreements that have “the purpose or effect of concealing the details relating to a claim of sexual assault…or a claim of sexual harassment.” The NDA Law further provides that such agreements are “void and unenforceable.” The NDA Law defines “sexual harassment” using the definition in Virginia Code § 30-129.4, which defines sexual harassment as “unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature when such conduct explicitly or implicitly affects an individual's employment, unreasonably interferes with an individual's work performance, or creates an intimidating, hostile, or offensive work environment.” Nondisparagement provisions which have “the purpose or effect of concealing the details” relating to sexual assault or sexual harassment claims are also unlawful and unenforceable under this new law.

Importantly, the law appears to be limited to agreements entered into “as a condition of employment.” While it is unknown how the Virginia Supreme Court will interpret the amended NDA Law, it appears that the General Assembly did not intend for it to apply to separation or severance agreements relating to the termination or cessation of an individual’s employment given the plain language of the amendment limiting it to agreements entered into as a condition of employment.   

Employers should be mindful of the above considerations when drafting agreements with their employees.