As the 2023 Virginia legislative session comes to a close, Governor Glenn Youngkin signed into law two new pieces of legislation that will expand the Commonwealth’s existing restriction on employee confidentiality agreements and restrict how employers may use employee social security numbers. Both new laws go into effect July 1, 2023.
Expanded prohibition on confidentiality and non-disparagement agreements
In 2019, Virginia enacted Va. Code § 40.1-28.01, which prohibits employers from requiring an employee or prospective employee to agree to a confidentiality agreement as a condition of employment that has the purpose or effect of concealing details related to a claim of sexual assault as defined in certain provisions of the Virginia criminal code (namely, rape, forcible sodomy, or sexual battery).
On March 26, 2023, the Governor signed H.B. 1895, which: (1) expands the coverage of the law to include claims of sexual harassment as defined in Va. Code § 30-129.4 (“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”), and also (2) prohibits non-disparagement agreements that have the purpose or effect of concealing details related to a claim of sexual assault or sexual harassment.
Like the original law, the expanded statute only applies to agreements with current and prospective employees and those agreements that are “a condition of employment,” and therefore does not cover post-employment settlement agreements. Apart from these Virginia-specific developments, employers should also be mindful of the NLRB’s recent action on non-disparagement and confidentiality provisions that we previously covered with important FAQs.
Restrictions on use of employee social security numbers
On March 21, 2023, the Governor signed S.B. 1040, which prohibits employers from using an employee’s social security number (or any derivation of it) as the employee’s identification number or on the employee’s identification or access card/badge. The Department of Labor and Industry may enforce the law with a $100 civil penalty for each violation.
In light of these developments, employers should review their non-disclosure, confidentiality, and non-disparagement practices and also their use of employee social security numbers. If you have any questions on these new laws, need assistance developing policies and procedures to adjust for such changes, or have other questions regarding your workforce, please contact Betty Graumlich at firstname.lastname@example.org, Noah Oberlander at email@example.com, or the Reed Smith lawyer with whom you normally work.