Settlement Agreements

Part 2, Title 14, Chapter 3.5 deals with confidential settlement agreements in civil actions in California.

Section 1001 provides that a provision within a settlement agreement that prevents or restricts the disclosure of factual information related to a claim filed in a civil action or a complaint filed in an administrative action is prohibited regarding any of four specified acts.

A provision that shields the identity of the claimant and all facts that could lead to the discovery of the claimant’s identity, including pleadings filed in court, may be included within a settlement agreement at the request of the claimant. This subdivision does not apply if a government agency or public official is a party to the settlement agreement.

Section 1002 states that a provision within a settlement agreement that prevents the disclosure of factual information related to the action is prohibited in any civil action the factual foundation for which establishes a cause of action for civil damages for any of the following:

An act that may be prosecuted as a felony sex offense; an act of childhood sexual assault; an act of sexual exploitation of a minor; or, an act of sexual assault.

In a civil action, a court is prohibited from entering, by stipulation or otherwise, an order that restricts the disclosure of information in a manner that conflicts with the general prohibition.

Chapter 3.6 deals with agreements settling employment disputes in this state.

Section 1002.5 prohibits an agreement to settle an employment dispute from containing a provision prohibiting, preventing, or otherwise restricting a settling party that is an aggrieved person from obtaining future employment with the employer against which the aggrieved person has filed a claim, or any parent company, subsidiary, division, affiliate, or contractor of the employer.

This does not preclude the employer and aggrieved person from making an agreement to end the employment relationship or restrict the aggrieved person from obtaining future employment with the settling employer.

The following terms are defined: “aggrieved person,” “sexual assault,” and “sexual harassment.”