Confidentiality in Harassment Settlements: What CCP 1001 Allows
A California employer settling a harassment claim can usually keep the amount confidential, but not the facts. Under Code of Civil Procedure section 1001, a settlement provision that restricts disclosure of factual information about a filed claim of sexual harassment, sexual assault, workplace harassment or discrimination, or related retaliation is prohibited and void. Employers that settle these claims can still protect the payment amount and, at the claimant’s request, the claimant’s identity.
What does section 1001 prohibit?
Restrictions on the facts of certain filed claims. Section 1001(a) says 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 when the claim involves sexual assault, sexual harassment, or “An act of workplace harassment or discrimination, failure to prevent an act of workplace harassment or discrimination, or an act of retaliation against a person for reporting or opposing harassment or discrimination.”
The workplace categories reach any protected trait under FEHA, not only sex. A race discrimination lawsuit, an age discrimination charge at the Civil Rights Department, and a retaliation claim for opposing harassment all fall within the statute’s cross-reference to Government Code section 12940. Under section 1001(g), the expansion to those broader workplace categories applies “only to agreements entered into on or after January 1, 2022.”
Courts are bound too. Section 1001(b) says that in these cases “a court shall not enter, by stipulation or otherwise, an order that restricts the disclosure of information in a manner that conflicts with subdivision (a).” A stipulated protective order or sealing request can’t do what the settlement agreement can’t.
What can an employer still keep confidential?
Three things matter most.
The amount. Section 1001(e) says the section “does not prohibit the entry or enforcement of a provision in any agreement that precludes the disclosure of the amount paid in settlement of a claim.” That’s the confidentiality most employers care about, because it keeps a settlement from setting a price for the next demand.
The claimant’s identity, if the claimant asks. Under section 1001(c), “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.” The request has to come from the claimant, and the exception doesn’t apply when a government agency or public official is a party. A settlement agreement should record that the claimant asked for it.
Business information unrelated to the claim. Section 1001 is limited to factual information related to the claim, so a separate clause protecting customer lists, pricing, or internal financials falls outside its terms, as long as it doesn’t operate to silence the claimant about the alleged conduct.
What happens if the agreement goes too far?
The offending provision is void. Under section 1001(d), a provision that restricts disclosure of the facts in violation of the statute, “entered into on or after January 1, 2019, is void as a matter of law and against public policy.” An employer that paid extra for silence about the facts may find it paid for nothing.
The bigger risk is the rest of the agreement. If the confidentiality clause is drafted as a central term, the claimant may argue the whole settlement is unenforceable, or the employer may lose the benefit it bargained for. A severability clause and a confidentiality section limited to the amount and, where requested, the claimant’s identity avoid that problem.
Do other laws limit confidentiality and testimony waivers?
Yes, and a settlement should account for all of them.
Testimony waivers. Civil Code section 1670.11 makes void any provision in a contract or settlement entered into on or after January 1, 2019, that waives a party’s right to testify about “alleged criminal conduct or alleged sexual harassment” by the other party or its agents or employees, when the party has been required or requested to attend under “a court order, subpoena, or written request from an administrative agency or the Legislature.”
Separation agreements. Government Code section 12964.5(b) separately bars provisions in separation agreements that prohibit disclosure of information about unlawful acts in the workplace, and requires specific carve-out language in nondisparagement clauses. That section doesn’t apply to a negotiated settlement of a claim already filed in court, before an administrative agency, in an alternative dispute resolution forum, or through the employer’s internal complaint process, under subdivision (d). Section 1001 still applies to those settlements.
Federal law. The Speak Out Act provides that “no nondisclosure clause or nondisparagement clause agreed to before the dispute arises shall be judicially enforceable” in a sexual assault or sexual harassment dispute, according to 42 U.S.C. § 19403(a). It targets clauses signed before a dispute, such as onboarding agreements. A settlement agreement signed after the dispute arises isn’t covered by that section. Employers should still check that standard employment agreements don’t purport to silence later harassment claims.
How do the rules compare?
| Provision | What it covers | What the employer can still protect |
|---|---|---|
| CCP § 1001 | Settlements of filed civil or administrative claims of sexual assault, sexual harassment, or FEHA harassment, discrimination, or retaliation | The amount (subd. (e)); claimant identity at the claimant’s request (subd. (c)) |
| Civ. Code § 1670.11 | Waivers of the right to testify about alleged criminal conduct or sexual harassment when compelled or requested | Nothing in that category. Such waivers are void |
| Gov. Code § 12964.5(b) | Separation agreements | Severance amount (subd. (e)); trade secrets and confidential information unrelated to unlawful acts (subd. (f)) |
| 42 U.S.C. § 19403 | Pre-dispute nondisclosure and nondisparagement clauses in sexual assault and harassment disputes | Trade secrets and proprietary information (subd. (d)) |
What should an employer do before signing a harassment settlement?
- Gather every agreement the employee signed with the company, including offer letters, confidentiality agreements, arbitration agreements, and any earlier separation papers, and keep the litigation hold in place until the settlement is final.
- Confirm the deadlines in the case and any EPLI carrier consent requirements for settlement, since many policies require the insurer’s approval before the company agrees to pay.
- Identify everyone at the company who needs to know about the settlement terms, and remind managers that retaliation rules continue to apply while the case is being resolved.
- Review the draft confidentiality and nondisparagement clauses, along with any cooperation clause, against section 1001, section 1670.11, and section 12964.5, and document any request by the claimant for identity protection.
- Talk to a lawyer before sending a settlement draft to the employee or the employee’s lawyer, because a void clause can undercut the bargain the company thinks it made.
Employers resolving these claims can find more on harassment claim defense for California employers on the firm’s employment defense page.
Settlement confidentiality questions from California employers
Can we require the employee to keep the settlement itself secret?
The amount, yes. Section 1001(e) expressly allows a provision that precludes disclosure of the amount paid. A clause that bars the employee from saying the case was settled or describing what happened is a different matter when the claim involves harassment, discrimination, or retaliation. The safer approach is to limit confidentiality to the amount.
Does section 1001 apply if the employee never filed a lawsuit or agency complaint?
By its terms, section 1001 covers factual information related to a claim filed in a civil action or a complaint filed in an administrative action. A pre-filing settlement of a demand letter may fall outside it, but Government Code section 12964.5 and Civil Code section 1670.11 can still apply. Employers shouldn’t treat a pre-filing settlement as an opening for broad fact confidentiality without a careful review.
Can the settlement include a mutual nondisparagement clause?
Often, if it’s drafted with care. It shouldn’t restrict the employee from disclosing factual information about the claim, and in a separation agreement it needs the carve-out language Government Code section 12964.5 requires. A nondisparagement clause that binds the company too, such as by limiting what named managers say, can help the employee accept the deal.
What if the employee breaches the amount confidentiality?
The amount provision is enforceable under section 1001(e), so the usual contract remedies apply. Settlement agreements often include a liquidated damages clause for that breach. Any such clause should be a reasonable estimate of the harm and should cover only the protected information.
If you’re negotiating a settlement of a harassment or discrimination claim
If your company is settling a harassment, discrimination, or retaliation claim, the confidentiality clause usually decides whether the agreement does what the company expects. Rosenberger + Kawabata represents employers defending employment lawsuits and claims through its business litigation practice, including claims involving workplace harassment and discrimination settlements. Contact Rosenberger + Kawabata online for a confidential consultation, or call (310) 894-6921.
Sources
The statutes are Code of Civil Procedure section 1001, Civil Code section 1670.11, Government Code section 12964.5, Government Code section 12940, and 42 U.S.C. § 19403.
This post is general information about California and federal employment law as of November 7, 2026. It is not legal advice, and reading it does not create an attorney-client relationship. Employment statutes, regulations, and court decisions change often, and the outcome of any claim depends on its facts. Past results do not guarantee future outcomes.