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State’s Private Attorneys General Act May Be Used to Challenge Nondisclosure Agreements

June 08, 2017

Posted in Employment Law

Though there’s only one Attorney General for the State of California under certain circumstances a state law allows a party to step into the Attorney General’s shoes and file a lawsuit. Current and former Google employees have filed suit under the statute to claim the company’s employee nondisclosure agreement is illegal.

The reason for the lawsuit is that another employee agreement forbids the use of class action lawsuits against Google, so plaintiffs turned to Plan B, the Private Attorneys General Act (PAGA), according to the Los Angeles Daily Journal. The law allows aggrieved employees to file lawsuits to recover civil penalties on behalf of themselves, other employees and the State of California for Labor Code violations.

The complaint, filed in state court in San Francisco, claims the nondisclosure agreements are so broad that current and former workers can’t say anything about the company or their work, including to their own attorneys, without violating them. Plaintiff’s claim that under the agreement they can’t discuss,
• With a potential employer their salary or the work they performed; the skills, knowledge, acquaintances they developed at the company or their overall Google experience.
• With the government, private attorneys or the press wrongdoings by Google.
• With friends or spouses whether management could be doing a better job.

Plaintiffs claim that everything it does and everything going on at Google can be considered “confidential information” and disclosure of virtually any information by employees could result in the loss of a job and the employee being sued by the company.

The lawsuit claims that its “John Doe” plaintiff was wrongly accused of leaking information to the press and wrongly publicly accused of doing so in order to be made an example of what can happen to an employee breaching the nondisclosure agreement.

Employment claims under PAGA have increased since the state Supreme Court decided in 2014 that any kind of arbitration agreement between an employer and employee can’t prevent a PAGA claim from being filed in court. This may be the first PAGA lawsuit challenging the legality of a nondisclosure agreement.

Google is trying to have the complaint dismissed. It states the allegations are pre-empted by the federal National Labor Relations Act, especially given that one of the plaintiffs has taken Google to the National Labor Relations Board to argue the nondisclosure agreement violates the law.

The act generally allows employees to discuss working conditions amongst themselves and others. Plaintiffs claim that can’t be done given the language of the nondisclosure agreement, even if there is illegal company conduct or dangerous product defects, because the company fears such discussions may be subject to discovery in private litigation or as part of a government investigation.

To be successful under PAGA a plaintiff need not show provable harm, only that unlawful acts were taken by the employer. Generally in civil actions a plaintiff needs to show some harm was done. The lawsuit claims 18 causes of action under different sections of state labor law.

If Google is found liable it could be ordered to pay $100 for each aggrieved employee for an initial pay period and $200 for each subsequent pay period. Plaintiffs estimate there are 1.56 million pay periods annually at Google so damages theoretically could run into billions of dollars.

Nondisclosure agreements can be critical to protecting an employer’s intellectual property, but in order to be legally enforceable such an agreement can’t be too broad. If you have any questions about a nondisclosure agreement and how it may be enforced, contact our office so we can talk about your situation, the agreement at issue and how you can protect yourself or your company.