Separation Agreement Gag Clauses: Federal Retreat, California Unchanged
Many California employers assume that if federal labor enforcement backs away from scrutinizing confidentiality and non-disparagement clauses in separation agreements, the pressure on those clauses eases across the board. It does not, and treating it as though it does is the mistake.
Federal enforcement guidance has recently retreated from the position taken in McLaren-Macomb, a 2023 ruling that expanded scrutiny of broad confidentiality and non-disparagement language in separation agreements, including agreements involving non-union employees. That retreat changes the federal enforcement posture. It does not touch California’s own statutory restrictions, which exist independently and were never derived from federal labor law in the first place.
Under Gov. Code § 12940 (the Fair Employment and Housing Act, FEHA), § 12964.5 specifically prohibits requiring an employee to sign a non-disparagement or similar provision that restricts their right to disclose unlawful workplace conduct, including harassment, discrimination, and retaliation, as a condition of employment, a raise, or a bonus. Separate California statutes bar nondisclosure clauses tied to sexual harassment and related claims, and prohibit conditioning payment of wages already owed on a release or gag clause.
The corrective step is straightforward: a separation agreement built around federal enforcement assumptions that have now shifted still has to satisfy California’s own requirements, which have not shifted at all. Templates that were compliant five years ago deserve a second look, not because federal policy changed, but because California’s rules were always the ones doing the real work.
If your separation agreements haven’t been reviewed against California’s own confidentiality and non-disparagement restrictions recently, the federal shift is a good reason to check, not a reason to relax; contact Michael Trust Law, APC for a no-charge initial consultation. The facts determine what needs to be addressed — and how much of a conversation that takes.
This post shares general information based on common patterns I see in California workplaces. It is not legal advice, does not create an attorney-client relationship, and outcomes depend on specific facts — no lawyer can guarantee a result. Past results do not guarantee or predict future outcomes. AI may have been used to create this post. All content reviewed by a CA attorney before publication.