New Jersey has established itself as one of the most aggressive states in the country when it comes to expanding employee rights in harassment and discrimination cases. Amendments to the New Jersey Law Against Discrimination have fundamentally changed the legal landscape for employers who relied on mandatory arbitration clauses and confidentiality provisions to manage employment-related claims — and the full scope of these changes is essential reading for any business operating in the state.
Mandelbaum Barrett PC’s labor and employment law practice advises New Jersey employers on the requirements and implications of the state’s evolving employment laws, including the LAD amendments that directly affect how employers can and cannot respond to harassment and discrimination complaints. The firm’s attorneys help businesses review their existing employment agreements, policies, and dispute resolution mechanisms to confirm compliance with current law.
What New Jersey’s LAD Amendments Changed
New Jersey’s Law Against Discrimination prohibits discrimination in employment on the basis of a range of protected characteristics, including race, national origin, sex, gender identity, sexual orientation, age, disability, and others. The legislature’s amendments to the LAD addressed two specific mechanisms employers had commonly used to limit their exposure in harassment and discrimination cases: mandatory arbitration clauses in employment agreements and confidentiality provisions in settlement agreements.
Under the amended law, any provision in an employment contract or agreement that prospectively waives an employee’s right to pursue a LAD claim in court — including mandatory arbitration clauses that would compel resolution of harassment or discrimination claims through arbitration — is against public policy and unenforceable. Similarly, provisions in settlement agreements that require employees to keep the terms of a harassment or discrimination settlement confidential are unenforceable unless the employee affirmatively requests confidentiality. These changes reflect the legislature’s intent to increase transparency and reduce the use of private mechanisms to resolve what the law treats as matters of significant public concern.
Practical Implications for New Jersey Employers
Employers with standard arbitration agreements or arbitration clauses in offer letters, employment agreements, or handbooks should review those documents carefully. Arbitration provisions broadly applicable to workplace disputes may remain enforceable for claims other than LAD claims — the scope of the restriction depends on the precise language of both the agreement and applicable case law. Employers should not assume that a general arbitration clause covers only permissible claims without a legal review that accounts for recent New Jersey court decisions interpreting these provisions.
For employers navigating active harassment or discrimination complaints, the confidentiality rules also affect how settlements can be structured. New Jersey employers settling LAD claims should confirm that any confidentiality terms are structured consistently with the amended law’s requirements before finalizing an agreement.
According to the U.S. Equal Employment Opportunity Commission, federal law also prohibits workplace harassment on the basis of protected characteristics, and the EEOC has published guidance on employer obligations to prevent and respond to harassment in the workplace. New Jersey’s LAD protections generally exceed federal standards, and employers must satisfy both.
Contact Mandelbaum Barrett PC for New Jersey Employment Law Guidance
If your business needs to review its employment agreements, arbitration provisions, or policies in light of New Jersey’s LAD amendments, the labor and employment law team at Mandelbaum Barrett PC can help.
Reach out through our contact page to speak with our attorneys. We are here to help New Jersey employers build legally compliant workplaces and respond effectively to employment law changes as they occur.