HB5425 - Relating to prohibiting certain nondisclosure or non-disparagement agreements by employers; creating a civil cause of action.

  89R16176 KKR-D     By: Morales of Harris H.B. No. 5425       A BILL TO BE ENTITLED   AN ACT   relating to prohibiting certain nondisclosure or non-disparagement   agreements by employers; creating a civil cause of action.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subtitle A, Title 2, Labor Code, is amended by   adding Chapter 25 to read as follows:   CHAPTER 25.   CERTAIN NONDISCLOSURE AND NON-DISPARAGEMENT   AGREEMENTS PROHIBITED           Sec. 25.001.  DEFINITIONS. In this chapter:                 (1)     "Employee" means an individual who performs   services for an employer for compensation under an oral or written   contract of hire, whether express or implied.                 (2)     "Employer" has the meaning assigned by Section   61.001.           Sec. 25.002.  EXEMPTIONS. This chapter does not prohibit:                 (1)     enforcement of a provision in any agreement that   prohibits the disclosure of the amount paid in a settlement   agreement; or                 (2)     an agreement that lawfully protects trade secrets,   proprietary information, or confidential information not subject   to this chapter.           Sec.   25.003.     PROVISIONS OF CERTAIN AGREEMENTS VOID AND   UNENFORCEABLE. Any provision of a nondisclosure, confidentiality,   or non-disparagement agreement or any other agreement between an   employer and an individual who is an employee or independent   contractor is void and unenforceable as against the public policy   of this state if the provision prohibits the individual from   disclosing or discussing conduct that the individual reasonably   believes is a violation of state or federal law, including a   violation of law related to:                 (1)  wages;                 (2)  discrimination;                 (3)  harassment;                 (4)  retaliation; or                 (5)  sexual assault.           Sec.   25.004.     PROHIBITED CONDUCT BY EMPLOYER. An employer   may not:                 (1)     discriminate or retaliate against an individual   because the individual:                       (A)     discloses or discusses conduct that the   individual reasonably believes is a violation of law described by   Section 25.003; or                       (B)     refuses to sign an agreement prohibited by   this chapter;                   (2)     request or require that an individual sign an   agreement prohibited by this chapter; or                 (3)     attempt to enforce a provision of an agreement   prohibited by this chapter, whether through a lawsuit, a threat to   enforce, or any other attempt to influence an individual to comply   with a provision in any agreement that is prohibited by this   chapter.           Sec.   25.005.     CIVIL ACTION. (a)   An individual aggrieved by   a violation of this chapter may bring a civil action against the   employer to enforce rights protected by this chapter.             (b)     An individual who prevails in a civil action under this   section is entitled to recover from the employer:                 (1)  damages in an amount equal to the greater of:                       (A)  actual damages incurred; or                       (B)  $10,000; and                 (2)  reasonable attorney's fees and costs.           Sec.   25.006.     LIBERAL CONSTRUCTION. This chapter shall be   liberally construed to effectuate its purposes.          SECTION 2.  (a)  Section 25.003, Labor Code, as added by this   Act, applies to an agreement entered before, on, or after the   effective date of this Act.          (b)  Sections 25.004 and 25.005, Labor Code, as added by this   Act, apply only to a cause of action that accrues on or after the   effective date of this Act.          SECTION 3.  This Act takes effect September 1, 2025.