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July 19, 2024
Effective August 1, 2024, Louisiana will prohibit the enforcement of employer-required nondisclosure provisions to which a worker agrees prior to a dispute involving allegations of hostile work environment or sexual harassment. 2024 La. HB 161.
This new law is inspired by #MeToo, a social movement against sexual abuse and sexual harassment in which victims publicize their experiences. It adds a new section to Louisiana Revised Statute §9:2717, Contracts Against Public Policy. The law defines “hostile work environment” to include any situation where “harassment rises to a level that alters the ability of an employee to perform the employee’s duties.” It defines “sexual harassment” to include “unwelcome sexual advances, requests for sexual favors, and other sexually inappropriate conduct that affects an individual’s employment, unreasonably interferes with an individual’s work performance, or creates an offensive work environment.”
The law does not prohibit confidential settlement agreements executed after a hostile work environment claim is filed or after a dispute has occurred.[1]
Louisiana employers: Review your employment agreements, settlement agreements, and policies to ensure compliance with the new law.
Louisiana also has amended its Labor and Worker’s Compensation law to address payments to workers following their separation from employment. 2024 La. HB 352. Specifically, effective August 1, 2024, compensation in the form of commissions, incentive pay, or bonuses will be considered an amount then due only if, at the time of separation, the compensation has been earned and not modified in accordance with a written policy addressing such compensation.
It is lawful for an employer to maintain a policy that provides for adjustments to commissions based on changes to the order generating a commission that affects their amount. It also is lawful for an employer to maintain a policy providing that payment to a worker is not earned unless and until the employer has received the payment that generates the commission, incentive pay, or bonus.
Lastly, with respect to bonuses, if the bonus is determined by the worker’s or the employer’s performance on an annual, quarterly, or other periodic basis, employers may take a reasonable amount of time – not to exceed 120 calendar days from the end of the periodic basis – to make a determination regarding whether a bonus is due and the amount of such bonus.
Louisiana employers: Take this time to review your compensation policies to ensure that they address when compensation in the form of commissions, incentive pay, and bonuses is earned.
The author of this article, Patricia Tsipras, is a member of the Bar of Pennsylvania. This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice in Pennsylvania, Louisiana, or any other jurisdiction, nor does it establish an attorney-client relationship with any reader of the article where one does not exist. Always consult an attorney with specific legal issues.
[1] With this law, Louisiana joins many states and the federal government in passing #MeToo-inspired statutes to restrict the use of nondisclosure provisions. For example, in 2022, President Biden signed into law the Speak Out Act, which prohibits nondisclosure and non-disparagement clauses to which parties agree before a dispute involving sexual misconduct arises.
